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What changes await in the electricity supply market, what is the most important thing that each of us should know, 15 minutes speaks with the Head of the Service Department of the company Energijos Skirstymo Operatorius (ESO) Renaldu Radvila.
Photo of Energijos Skirstymo Operatorius / Director of EUO Services Renaldas Radvila
– In May, the Seimas allowed the liberalization of the electricity supply market. What does this mean? What changes await the electricity supply market?
– The change is implemented with one objective: that in the electricity market, when electricity providers compete, the consumer would receive the price of electricity provided by a competitive and unregulated market. The business has been using this advantage for many years. And now a natural change is coming to every Lithuanian resident, so that he can decide for himself from whom and how much to buy electricity. The gradual abandonment of the monopoly conditions of public providers will take place gradually and will be implemented in three stages from 2021, according to best practices in many European countries. This will ensure a smooth and consistent transition of the entire population of the country to new conditions of electricity supply.
It is important to mention that suppliers will prepare individual offers for the population at each stage.
The goal of dividing the stages itself is simple: the population is divided according to the annual electricity consumption of their homes, from the most consumers to the least consumers. The final stage will also include low-energy members, vulnerable social groups, home or garden communities, garage complexes, and similar electricity consumers.
Providers will prepare individual offers for residents at each stage.
I observe that the population of socially vulnerable groups enters the final stage, not by chance. At this stage, a series of measures will have been taken to stabilize the liberalized electricity market, make consumers and suppliers use it and reduce the inconvenience of vulnerable people as a result of the change.
– You have already mentioned that the electricity market liberalization process will take place in stages. Can you tell us more specifically about each of them?
– As I mentioned, the project will be implemented consistently, in three stages. The change in the electricity market will begin with the largest consumers of electricity. Such a model has already proven its worth through a change in the business segment in Lithuania and other countries.
In the first phase, from autumn to December 10 of this year, those who consume more than 5,000 kWh per year (approximately 417 kWh per month) will be invited to choose a provider. Providers selected by consumers will begin providing services from 2021. January 1, after expiration of public provider contracts. I remind you that this does not apply to vulnerable people who receive social support.
The second stage will start from 2022. Residents who consume more than 1000 kWh per year (around 83 kWh per month) will be invited to take advantage of the competitive offers on the market. Consumers will complete the complete unbundling cycle of the current monopoly in the third stage. Also those who receive electricity from medium voltage electricity networks, community organizations, associations. From 2023 January 1 Electricity prices for domestic customers will no longer be regulated.
– Than about Ordinary consumers of electricity should be aware of pending changes. Tell us more about how the planned changes will affect you?
– I want to assure the population that the whole process will be constant and slow, that each resident will have time to delve deeper and discover what will happen, that they will have time to weigh, compare and ultimately choose a provider, only the provider’s offer more adequate and with better performance. At the same time, I would like to point out that, understanding the importance and relevance of this change, ESO will implement a very broad public information campaign, from which every Lithuanian resident should really learn about this important change for each of us.
A website has already been created for this purpose: Choose your account.lt. Here, each electricity consumer will find important and relevant information on the stages of choosing an electricity supplier and what each of us will have to do.
One of the most important things residents should know is that a decision must be made in a hurry, in depth. In particular, each resident will be contacted by a letter from a public provider indicating that they are in the first stage, and from January 1, the supply of electricity to the population will no longer be provided by a public provider. If the resident does not object, without informing ESO in a manner acceptable to him, in September ESO will transmit the resident’s contact details and electricity consumption to the providers so that they can send their offers to each resident, i. Compete for each client, and the consumer will decide and choose the most suitable offer for him. The most important thing is to do this before December 10 of this year, so that a new contract with the selected provider is effective from January. Of course, a resident can find a suitable electricity supplier and conclude a contract with him sooner, without waiting for December.
All of these processes will cost the resident nothing additional, and if the decision to choose a provider is made, the provider will inform ESO of the resident’s decision and the agreement concluded. The resident will not have to do anything extra.
Myths about future change have already been heard. We want to make sure that there is no need to run new electrical cables or take any other action. All you have to do is rewrite the service contract with the electricity provider of your choice.
– What will happen if consumers before Decemberžio 10 d. won’t choose a new electricity that muchhe went?
– When the resident fails before December 10. To choose an electricity supplier, ESO will be responsible for the electricity supply in the event of termination of the public supplier’s service contract. Such a service is called a warranty supply. However, it is very important to keep in mind that ESO will only take care of this for six months and, according to the provisions of the Electricity Law, said service will be provided adding 25% to the electricity exchange price. coefficient. The price of electricity will be recalculated each month. Therefore, we urge residents not to delay and take advantage of offers from electricity providers and the opportunity to choose a provider before entering guaranteed supply.
We want to make sure that there is no need to run new electrical cables or take any other action. All you need to do is rewrite the service contract with the selected electricity provider.
– Is a fuse provided?Vulnerable populations? What are they?
– By establishing the procedure for the liberalization of electricity supply, the state has provided guarantees to prevent people from socially sensitive social groups from experiencing difficulties, therefore, they will be able to choose an electricity supplier during the last, third stage. If they cannot or cannot choose the electricity supplier themselves, ESO will guarantee the guaranteed supply under the conditions provided by law.
– What are the benefits for consumers of choosing new providers?
– Most importantly, there will be competition between providers. For consumers, this means better conditions, access to better service and quality of service. Furthermore, the consumer will have the opportunity to change and choose a provider if they are not satisfied with the quality of the service or service. The electricity consumer will also choose the most suitable consumption plan and prices that meet their needs and consumption habits. You will be able to compare, analyze and finally choose only the most suitable offer from the electricity supplier.
Incidentally, in January ESO surveyed residents on whether they are aware of the imminent possibility of choosing the electricity provider they want. They were asked how they see this change. The results were really surprising in a good way: according to the survey, about 51 percent. Lithuanian residents have heard about the fact that since 2020. In September, residents will have the opportunity to freely choose their electricity provider. 38 percent Respondents identified the possibility of choosing a service plan that meets the needs as an advantage of electricity grids. 35% indicated the possibility to freely choose an independent electricity supplier as an advantage, 33%. – competitive electricity prices (“Public opinion survey on the liberalization of the electricity market” carried out by Spinter Research – ed.). Therefore, the result of the population survey is really optimistic, but at the same time it forces to look for more solutions on how to inform each electricity consumer so that there are no unanswered questions.
– How will the services themselves change? What developments can consumers expect?
– The goal and expectation of all of us is one: as many providers in the market as possible and real competition, which will ensure that every Lithuanian electricity consumer feels the most benefit. We have an analogy in the field of telecommunications. The recent past has shown that with the abandonment of monopolies, for example in the telecommunications sector, and the emergence of competitive conditions, operators are offering customers a wide range of new and integrated offerings or solutions. I sincerely hope that electricity providers, as competition for electricity providers expands in the marketplace, offer consumers not only specific electricity supply services, but also complex solutions.
The goal and expectation of all of us is one: as many providers in the market as possible and real competition, which will ensure that all electricity consumers feel the greatest benefits.
– What are the good examples of foreign countries in this area? Perhaps Lithuania will follow the example of some of them?
– Almost throughout Europe, states do not regulate retail electricity markets, leaving consumers and buyers free to decide for themselves where to buy electricity. The experiences are very different and different in each country, due to the many specific elements of the market, the participation of the state in this process. In some countries, consumers are very active in choosing their electricity provider and they do so with great intensity and more than once, while in others the rate of change has been slower.
In Sweden, for example, according to 2016 data, electricity supply conditions have changed by approximately 24 percent. Domestic consumers and approximately one-tenth of households switched electricity providers. And the Czech electricity retail market is one of the most liberal, with a large number of suppliers and a low price of electricity compared to other EU countries. It is true that in the Czech Republic, the liberalization of retail electricity supply has been gradual: it started in 1995 and was fully implemented in 2006. That year, 5.5 million households chose an electricity supplier. There have been more than two million changes of electricity supplier in the last decade.
At that time, in Estonia, since the liberalization of the electricity supply market in 2013, consumers had the opportunity to change providers every month. There are no restrictions or fees in the exchange process in Estonia. In April 2013, already 72 percent. Estonians had contracts with retail electricity providers. In 2014, 5 percent. households changed their electricity supplier. In addition, in the same year, more than 80 percent. Consumers use the services of retail electricity providers.
Thanks for the conversation.
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