1 vattenfall sveanät ab deregulation for domestic customers in sweden “organizational...

1Vattenfall Sveanät AB

Deregulation for domestic customers in Sweden

“Organizational consequences for network companies in Sweden and

the consequences for their IT systems after opening the electricity market

for domestic customers”

Sven Lindgren



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



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



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


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).




Fictitious network created of the Network

Performance Assessment Model

A quarter of the city of Sundbyberg

Low Voltage network



Vattenfall Sveanät ABNumber of customers

440,000

Transmission volume32,000 GWh

Turnover300 MEUR

Number of employees220

Area structureUrban, rural, archipelago(700 electrified islands)

Merging process


VATTENFALLSVEANÄT

VATTENFALLSVEANÄTNorberg

Norberg

MälarnätMälarnät

SolnaSolna

SundbybergSundbyberg

HuvudstaHuvudsta

TyresöTyresö

VärmdöVärmdö

HuddingeHuddinge

DrefvikenDrefviken

SödertörnSödertörn

BotkyrkaBotkyrka

SalemSalem

Botkyrka-Salem

Botkyrka-Salem

VRABVRAB

KBABKBAB

ÖstraRoslag

ÖstraRoslag

IngaröIngarö

RoslagenRoslagen

KnivstaKnivsta

SydmälarenSydmälaren

MälarbygdenMälarbygden

BergslagenBergslagen

Norduppland

Uppsala Elnät

Uppsala Elnät

Sigtuna Elnät

Sigtuna Elnät

Roden Elnät

Roden Elnät

AvestaAvesta

Mergers 1995-2001



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



0

10 000

20 000

30 000

40 000

50 000

60 000

70 000

80 000

90 000

1996 1997 1998 1999 2000 2001 2002 2003

Customer switching administrationExample from Vattenfall Sveanät

Accumulated number, including costumer switching back to previous electricity supplier

1 November 1999Accumulated

18 %

Number ofcustomer440,000


Costumerswitching

system

SABEL

Billing system

Curry

Supplier

•Z03 contract of New supplier

•Z09 Supplier has changed Balance provider

Supplier

•Z04 confirms the contract to the New supplier,

• Z05 drops out the contract with the current supplier

• m m

To updateCurry

Daily changes

• Measuring stands

• Measuring changes

• New Customer

Balance Provider

• Preliminary account

• Finally account


Prodat EDIEL-

Converter

Data flow of message and data changes



Monthly meter reading of all customers 2009

Resolution from the Swedish Parliament expected this year

• Hourly reading of all meters > 63 A fuse – 1 July 2006(Today for meter fuse > 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.


Collecting system 1

Balance account systemMVS

SVK System authority

Collecting system 2


GS2

GS2

GS2

•Balance providers

•Supplier

Billing system Curry

Bills

Ediel

Hour based value

Hour based value

Hour based value

Ediel converter

inhou

se

Collecting system 3

Dataflow of hour based energy values




Project: “Number 1 for the Customer” - A fresh approach to the customer



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 consumption”It 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”



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




“The opening of the electricity market for domestic customers in Sweden has in many aspects greatly changed the conditions for

the network companies business”

1 vattenfall sveanät ab deregulation for domestic customers in sweden “organizational...

Documents

vattenfall slide

customers quality

sweden slide

sweden fictitious network

deregulation process

customers energy consumption

network prices

process slide