1. Implications of regulatory changes of the market model on the distribution business

2. Frankfurt (Germany), 6-9 June 2011 2  Political ambition to achieve a common Nordic Retail Market  Creation of one single market out of four national markets (Sweden, Norway, Finland, Denmark)  An integrated market is assumed to be more efficient and a step towards an integreated European market  Main goal: to create an efficient, customer oriented market with a high degree of competition between suppliers Lee Rud – Sweden – Session 6 – Paper 1293 Ambitions to create common Nordic Retail Market

3. Frankfurt (Germany), 6-9 June 2011 3  Ensure neutrality of DSOs  Low entry barriers for new suppliers Possibility to operate in one country without establishing a subsidary  Increase the power and influence of the customer  Common procedures for key processes as supplier switching and moving  Be future proof – compliance with EU regulation and development The new Nordic market model design should support the following Lee Rud – Sweden – Session 6 – Paper 1293

4. Frankfurt (Germany), 6-9 June 2011 4 Importance of the design of the customer interface  Essential part of market design  Customer angle on market actors and processes  Influences roles, responsibilities and processes for Suppliers and DSOs Lee Rud – Sweden – Session 6 – Paper 1293

5. Frankfurt (Germany), 6-9 June 2011 5  Today the Nordic Market model is based on a dual point of contact model The customer has two different interfaces to turn to regarding electricity related matters in Sweden Present market model in Sweden Lee Rud – Sweden – Session 6 – Paper 1293 End-user Contract and Billing Outage Supplier Switch Customer Service … Contract and Billing Supplier Switch Customer Service … Energy consumption Meter Values Present Nordic Market Model DSO Supplier = Energy consumption information = Non competitive operation = Competitive Business operation

6. Frankfurt (Germany), 6-9 June 2011 6 Future market model Lee Rud – Sweden – Session 6 – Paper 1293 Supplier End-user DSO Contract and billing (supply and DSO) Start & End of supply Supplier Switch Move in/Out Customer Service Energy consumption Meter Values Supplier Centric Market Model Contract Suppl/ DSO New connection Change of connection Quality of delivery Outage Extended relation = Energy consumption information = Non competitive operation = Competitive Business operation  Change towards a Supplier Centric customer model  More issues handled by Supplier instead of the DSO  The DSO is seen as a facilitator and the Supplier is given the main role towards the customer

7. Frankfurt (Germany), 6-9 June 2011 7  Mandatory combined billing is preferable before voluntary combined billing The supplier should always invoice the customer  Transparency of network fees have large consequnces on the IT System set up  The need of harmonisation of network tariffs must be further investigated  Depending on model set up, cost savings possible for DSO in terms of IT system Responsibility for billing is a crucial part of the model Lee Rud – Sweden – Session 6 – Paper 1293

8. Frankfurt (Germany), 6-9 June 2011 8  Billing and network tariffs  Demand for customer service will change  Challenge to operate an efficient DSO Customer Service for DSO responsibility areas (eg. Outage Management)  DSO customer communication Strategic areas for the DSO Lee Rud – Sweden – Session 6 – Paper 1293

9. Frankfurt (Germany), 6-9 June 2011 9  Influence on allowed revenues on regulated markets  Consequences for IT, HR, Customer Service resources and competence  IT strategies  DSO communication strategies  DSO contribution to customer energy efficiency Distribution companies need be well prepared for changes and challenges in the future! Further analysis of consequences of a new market model needed Lee Rud – Sweden – Session 6 – Paper 1293

10. Frankfurt (Germany), 6-9 June 2011 10 Thank you! Lee Rud – Sweden – Session 6 – Paper 1293