Deregulation for domestic customers in Sweden

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Deregulation for domestic customers in Sweden
Organizational consequences for network
companies in Sweden andthe consequences for
their IT systems after opening the electricity
marketfor domestic customersSven Lindgren
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Deregulation for domestic customers in Sweden

• Scope
• Milestone of the deregulation process in Sweden
• Opening of the electricity market for domestic
  customers
• organizational consequences
• New revenue regulation model from 1 January 2004
• Merging process of network companies in a cost
  effective
• manner Example from Vattenfall Sveanät
• IT systems for customer switching administration
• Monthly meter reading of all customers 2009
• IT systems for remote meter reading and billing
  Example from Vattenfall

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Deregulation for domestic customers in Sweden
Milestones of the deregulation process in
Sweden Date Milestone/New Laws 1 January
1996 Deregulation of the electricity market In
reality for commercial and public business 1 July
1997 Maximum rate for customer switching 2 500
SEK (270) - hourly metering still required 1
November 1999 Hourly metering no longer required
up tp 80 A Market in reality opened for
domestic customers 1 July 2001 New regulation of
merging concession areas Same network prices in
merged areas 2007 1 January 2004 New regulation
of prices with the Network Performance
Assessment Model (NPAM) 1 January 2009 Monthly
meter reading of all customers and billing of
consumed energy i.e. not preliminary
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Deregulation for domestic customers in Sweden

• Organizational consequences of opening the market
  for domestic customers 1 November 1999 Example
  from Vattenfall Sveanät
• A new organizational group was established for
  customer switching administration
• A special organizational function was built for
  new IT- system support
• Independence function to price network tariffs
  - Considering regulators demands
• Resources to meet the increased interest from
  publicists concerning the deregulated market

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Deregulation for domestic customers in Sweden

• New revenue regulation model from 1 January 2004
• The Network Performance Assessment Model (NPAM)
• Model for objective measurements of distribution
  companies performance as seen by the their
  costumers
• Model designed to assessing the tariffs for -
  differing conditions- quality of supply provided
  by each company
• Performance defined by a fictitious network with
  - coordinates (x,y) for all customers- energy
  consumption for all customers - quality of
  supply parameters
• Must be reported to Swedish Energy Agency 31
  March every year (starting 2004).

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Deregulation for domestic customers in Sweden
Fictitious network created of the Network
Performance Assessment Model
A quarter of the city of Sundbyberg
Low Voltage network
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Deregulation for domestic customers in Sweden
Merging process
Vattenfall Sveanät AB Number of
customers440,000 Transmission volume32,000
GWh Turnover300 MEUR Number of employees220
Area structureUrban, rural, archipelago(700
electrified islands)
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Mergers 1995-2001
Norduppland
Roslagen
Ingarö
Knivsta
Avesta
Mälarnät
Sydmälaren
Mälarbygden
Salem
Botkyrka- Salem
Bergslagen
VATTENFALLSVEANÄT
Botkyrka
Norberg
Uppsala Elnät
Solna
Huvudsta
Östra Roslag
Sigtuna Elnät
Sundbyberg
Södertörn
Roden Elnät
Tyresö
Värmdö
Huddinge
Drefviken
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Deregulation for domestic customers in Sweden
To be successful in a Merging process Important
issues to consider Rapid merging of companies
- In organisation and appointment of
managers Information to employees
Honesty To be aware of crisis Manage
personnel reduction well Competence
development Staff welfare
Year 1999 2003Costumer
240,000 440,000Employees 199
220 Contractors and call centre with billing
(bought services) are not included
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Deregulation for domestic customers in Sweden
Customer switching administrationExample from
Vattenfall Sveanät
Accumulated18 Number ofcustomer440,000
1 November 1999
Accumulated number, including costumer switching
back to previous electricity supplier
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Deregulation for domestic customers in Sweden

• Supplier
• Z03 contract of New supplier
• Z09 Supplier has changed Balance provider

Data flow of message and data changes
Costumerswitchingsystem SABEL
Billing system Curry

• Supplier
• Z04 confirms the contract to the New supplier,
• Z05 drops out the contract with the current
  supplier
• m m

Prodat
EDIEL- Converter
To updateCurry

• Daily changes
• Measuring stands
• Measuring changes
• New Customer

• Balance Provider
• Preliminary account
• Finally account

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Deregulation for domestic customers in Sweden

• Monthly meter reading of all customers 2009
• Resolution from the Swedish Parliament expected
  this year
• Hourly reading of all meters gt 63 A fuse 1 July
  2006(Today for meter fuse gt 200 A)
• Monthly meter reading of all customers 1 July
  2009
• The switching to a new electricity supplier shall
  be easer for the costumer
• In reality this means that remote metering
  system have to be implemented for all costumers.
  This is also the lawmakers intention.

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Deregulation for domestic customers in Sweden
Dataflow of hour based energy values
SVK System authority
Ediel
Collecting system 1
Hour based value
Ediel converter
GS2

• Balance providers
• Supplier

inhouse
Collecting system 2
GS2
Hour based value
Balance account systemMVS
Billing system Curry
GS2
Collecting system 3
Hour based value
Bills
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Deregulation for domestic customers in Sweden
Monthly meter reading of all customers
2009 Project Number 1 for the Customer -
A fresh approach to the customer

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Deregulation for domestic customers in Sweden
Monthly meter reading of all customers 2009
It is unacceptable for customers to feel that
they come second

• Complicated bills
• It is unacceptable that customers cannot
  understand their own electricity bills

• Pay for actual consumptionIt is unacceptable
  that customers cannot pay for their actual
  consumption

• Customers feel that information is inadequate
  and vague
• It is unacceptable that customers do not fully
  understand what they are paying for

• Switching electricity suppliers is complicated
• It is unacceptable that it should be so
  difficult to switch electricity suppliers

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Deregulation for domestic customers in Sweden

• Powerful initiatives from Vattenfall...
• Investment of more than EUR 70 million (SEK 600
  million)
• Installation of approx. 300,000 remote-read
  meters in 2003-2005
• Eliminate preliminary charges

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Deregulation for domestic customers in Sweden

• The opening of the electricity market for
  domestic customers in Sweden has in many aspects
  greatly changed the conditions forthe network
  companies business