Croatia: Electricity traders complain at gov stakeholders, is the state still protecting its power utility company?

, SEE Energy News

Even though the Croatian electricity market was liberalized several years ago, due to a non-existent regulation and due to low prices of Hrvatska Elektroprivreda (HEP), alternative suppliers did not enter in a big way until now. Most of the new players came in the market as a supplier of large consumers and business, but winning the battle for households market has only just begun. Winning new customers with lower prices and better service from HEP’s, as it was imagined by former state monopoly competitors, will not be so easy, due to the growth of electricity prices in the stock market, and because of state taxes. RWE and GEN-I complain at gov agencies and bureaucracy.

Recent round table on the level of liberalization addressed all this topics. The discussion was attended by Tina Jakasa, Director of HEP supply, Robert Golob, President of the Slovenian company GEN-I, Zdravko Ivcic, director of NOX Group, Marko Cosic, CEO of Proenergija, Zoran Milisa, CEO of RWE Energy. Participants agreed that the price of electricity in the coming period will still rise, and better service can be expected only when better regulation and technology introduce, which is an obligation of the Croatian Energy Regulatory Agency (HERA) and partly Hrvatska Elektroprivreda (HEP). For more significant market placement, it was pointed out, there is still much work to winning the trust of consumers.

“In the last five months due to a number of factors in the market, including the hydrological good year, we recorded historically low electricity prices which is why in future we may expect that the electricity prices increase, but it is not known to what extent. I would to be optimistic, but the electricity in the last two months is going up. Increasing the price will come also for multiple price increases fees for renewable energy that followed the recent decision of the government”, said Zoran Milisa, CEO of RWE energy.

At the mercy of fees

Robert Golob, CEO of GEN-I, however, has more optimism than Milisa and he claims that their electricity price will stay the same over the next three years. GEN-I recently went to a fierce marketing campaign to conquer the market of households in Croatia, promising lower cost than HEP by 30 percent.

“We have already purchased electricity for the next three years, and we can guarantee that by the end of 2015 we will not change our electricity price, and there is no reason not to keep the trend in 2016. However, we can not guarantee the price of network fees, taxes and other charges and it also enters the electricity bill. As things stand now, all consumers in Croatia due to fees for renewable energy will get higher bills for electricity, and I’m afraid that the new charge will be in the future, but suppliers do not decide about that”, says Golob.

According to the experience of other European countries, ex-monopolists have managed to keep 50 to 60 percent f market share. Milisa points out that from alternative suppliers depends on how many shares will be able one to take concernig households. RWE plans to take 10 percent of the domestic market in three years. Marko Cosic announced the entry of the company PROENERGY in households. This company, namely, focused only on the supply companies in the previous period.

Heated debate has developed regarding the demolition of prices between Tina Jakasa from HEP and other participants. “When energy prices were high, nobody’s been interesting to get to market, the question is why all the players came when the price fell, why they came from the Slovenian market in Croatia at the time in which prices rose in Slovenia. GEN-I announced that it will cut prices by 30 percent, but it is clearly not possible”, said Jakasa.

Damping, damping!

Golob explained that the announced price reduction of 30 per cent for households enters also one month free service that his company planned in order to attract customers. He also said that his company has until now raised 15 thousand requests from citizens who want to change their supplier. He hopes that by the end of the year they will succeed to attract the planned 20 thousand customers in the households. “Usually when there is the first alternative supplier, ex-monopolists shout dumping! When we announced lower prices by 12 percent in January, HEP yelled dumping, and when they started to lower prices, they stopped talking about dumping. Now we are still cheaper than the HEP by 10 percent”, said Golob.

Zdravko Ivcic, director of NOX Group, warned: “I fear that customers do not conclude that they changed their supplier for nothing, because he could not provide better service because of poor technical adjustments. If the customer has every month problem with the accounts, as it was the case with TK liberalization of the market, people will have no room for doubt. I appeal to all players to appreciate the customer at all times, and not to play under the table, “he said.

Alternative suppliers expect that HERA will hurry with the adaptation and negotiations with HEP to enable customers to receive a single electricity bills until early 2014. The panelists warned that the methodology of determining the energy balance represents too high “fictitious cost” for suppliers and customers will end up paying the price.

Source; Serbia Energy See desk

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