Eurogas CONSUMER PROTECTION

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EurogasCONSUMER PROTECTION SWITCHING IN THE
DOMESTIC GAS MARKETERGEG Customer Focus Group
WorkshopHelsinki

• 11th October 2005

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Introduction

• Eurogas represents the interests of the natural
  gas
• industry in 21 countries. Membership is open to
  national
• federations and individual gas companies.
• Spring 2002
• Gas Suppliers Group established
• focus on issues of concern to suppliers,
  specifically those associated with the
  introduction of competition.
• The content of this presentation is based
  largely on the work of this group over the past 3
  years.
• Autumn 2005
• New structure for Eurogas groups is being
  introduced, and the GSG work will be continued
  under a new group, the Supply Market
  Development Committee.

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Eurogas Membership
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Domestic (household) competition

• Successful retail competition requires
• Efficient, smooth customer switching
• Eurogas review of customer switching processes
• Availability of consumer information
• Eurogas consideration of provision of
  information, including price comparisons
• Consumer protection
• Eurogas Position Paper on Direct Selling

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1. Efficient, smooth customer switching

• Eurogas review of customer switching processes
• Focus on the domestic (household) market
• Identified
• Key principles
• Main stages of switching process
• Approaches in different Member States

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Key Switching Principles

• Maximising customer satisfaction/minimising
  confusion
• Effective mechanisms for controlling poor sales
  practices
• Minimising rejections, errors and process
  problems
• Fair and transparent procedures for process
  changes/improvements
• Switching process to be non-discriminatory and
  pro-competitive

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The Switching Process

• Main stages
• Contract
• Verification
• Objection
• Processing
• Meter Reading
• Despite these common elements, models vary from
• country to country
• variations due to structural differences in
  industry organisation
• Speed of transfer balanced by need for process
  controls

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Switching Models

• Seeking to impose standardisation where systems
  are
• already (being) developed is not justified
• But
• helpful if customer experience at Member State
  level is as far as possible similar for gas and
  electricity
• helpful if systems over time can converge
• helpful if modules can be identified to
  facilitate convergence

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Critical success factors for customer switching

• Successful customer switching not just on the
• switching model, but also on
• Robust service level agreements, in particular
  with DSO
• High quality industry data
• Properly managed industry dataflows
• Acceptable transfer meter readings
• differences between domestic and non-domestic
  markets

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2. Availability of Consumer Information

• Eurogas also recognises the importance of
• Fair statements concerning price savings, and
  fair price comparisons
• Standard methodology
• Simple clear billing
• Not critical to show network charges and gas
  prices separately
• Independent and impartial websites
• Accreditation of sites

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3. Consumer Protection

• The interests of domestic consumer, particularly
• vulnerable consumers, are best safeguarded by
• Competitive pricing
• Protection against misselling
• Clear communications, both as regards prices but
  also switching process, transfer date etc.
• Dispute settlement
• Importance of dialogue with industry in the
  development
• of appropriate safeguards

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Eurogas Position Paper on Direct Selling

• Position Paper on Direct Selling to Household
  Customers
• emphasised importance of
• Responsible selling, particularly where
  vulnerable customers involved
• Clear information regarding services offered,
  prices, contractual conditions
• Gas suppliers should act promptly when problems
  arise

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Conclusions

• Customer interest closely aligned with that of
  suppliers
• Switching processes
• simple, efficient and as cheap as possible to
  operate
• speed of transfer balanced by proper process
  controls
• processes to be reviewed in light of experience
• Consumer information
• Ensure price comparisons not misleading
• Standard methodology
• Customer protection
• Sales and marketing
• Vulnerable customers
• If full benefits of competition to be realised,
  industry and regulator must work in partnership
  to ensure these issues are addressed
  appropriately