Management of the Hungarian Energy Office - Magyar Energia Hivatal

hungarian energy office
Trading margin cap and incentives of quality of supply
HEO is obliged to conduct an inspection on the capped
trading margin of universal service suppliers till 31 March of
the year subsequent to year under review. In the inspection,
HEO found that each universal service suppliers had an extra
trading margin in 2008 to be reimbursed to customers. HEO
provided in resolutions on the measure of the amount to be
reimbursed and on the way of reimbursement.
HEO has to complete the inspection of trading margins with
regard to the year 2009 until 31 March 2010.
With introducing an income levelling mechanism for disributors
in August 2006, there was no reason any more to maintain
the instrument of distributors’ profi t cap. Since the new price
regulation cycle, the income levelling mechanism will serve
as a tool also for the operation of a scheme of incentives on
service quality for distributors. The new elements of this
scheme were disclosed in the already mentioned methodolgy
guideline on price regulation of system use charges (published
on 31 October 2008). In line with this guideline, indices of
service quality affect the rate of the infl ation correction
factor to be taken into account in annual price adjustment.
Distributors who achieve better service quality indices while
distribution charges are uniform nationwide, gain extra money
through the income levelling mechanism to the detriment of
distributors achieving worse indices. HEO, after availing and
processing the data, can complete the assessment of service
quality indices of 2009 by late Spring in 2010, therefore their
effect will be refl ected in the administrative prices of 2011.
In addition to the above, on HEO’s proposal, the regulation
on the sanctioning of worsening service quality indices of
distributors was included again in the Decree on the setting of
charges for system use [GKM Decree 119/2007 (29.12)]. In
line with this provision, if the service quality indices specifi ed
in a HEO resolution worsen, the distributor must give a price
discount of 1-3% to the customers from its distribution charges
in the second half of the subsequent year.
HEO is examining the possibility of the extension of this
scheme of incentives on service quality also to the transmission
system operator.
PUBLIC SERVICE OBLIGATION AND CONSUMER
PROTECTION
Approval of Codes
The Electricity Act and its enforcement decree were
modifi ed several times in 2009. These changes required a
continuous adjustment of licensees’ Business Conduct Rules
to the effective statutory provisions. After comprehensive
discussions in more rounds, provisions serving the protection
of users have become more stressed in the modifi ed Business
Conduct Rules. HEO did not issue any resolutions on
the approval of Business Conduct Rules, but issued seven
resolutions on the modifi cation thereof in 2009.
annual report 2009 | 26
Service quality
The minimum quality requirements concerning individual
consumers are prepared on the basis of the annual data supply
of the scheme of Guaranteed Services and the evaluation of the
licensees’ activity in the previous year was completed in June
2009, and can be seen also on the webpage of HEO. In 2009,
also the scheme of Guaranteed Services itself was modifi ed
in accordance with the new regulation and also in line with the
activity of the distribution licensees, and also with the activity
of universal service licensees operating within a new legal
framework. The resolution on Guaranteed Services imposed
the obligation of automatic penalty payment with regard
to 10 of 13 minimum quality requirements on distribution
licensees, 4 of 5 minimum requirements on universal service
suppliers and 3 of 4 minimum requirements on trade licensees.
Aggregate fi gures on Guaranteed Services are shown in Table
7.
In 2009, HEO, following a discussion that took for several
months, made a detailed regulation on the requirement
II of Guaranteed Services for distribution licensees, the
’restoration of interruption of electricity supply affecting
several consumption places’ taking into account the effects of
extreme weather conditions ’accompanied by a disturbance
occuring on the effect of extreme wear and tear beyond design
conditions’. It was required particularly by the failure
between 27 January and 2 February and the growing number
of requests on exemption due to the increasing number of
failures. The modifi cation affected the procedure of the
qualifi cation of extraordinary events and the requirements of
restoration of supply. It is now the licensees’s responsibility
to qualify instead of an independent organisation, however, if
the distribution licensee fails to observe the deadline for the
restoration of breakdown, it will pay a penalty to the affected
user. Users are entitled for a repeated penalty for each further
12-hour outage after the deadline of restoration of breakdown
expires. This is a tool for HEO to motivate distributors to
accelerate the restoration of breakdowns. Penalty payment
will be automatic from 2011 taking into account the time
required for the development of the IT systems of distribution
licensees. Prior to than, penalty is paid based on the users’
claim.
In 2009, HEO investigated whether distribution licensees
observed the provisions specifi ed in the resolutions on
Guaranteed Services to be provided by distribution licensees,
paid the penalties to be paid automatically and managed
properly the rides of forestry. HEO stated that licensees’ data
registry is suitable to fulfi l the Guaranteed Services, and the
order of procedure of rider management is suitable for the
secure operation of networks.
From among distribution licensees, DÉMÁSZ Hálózati Elosztó
Kft. paid penalty in each failed case in 2008. (Ratio
of fulfi lling penalty payments: 100%). The ratio of fulfi lling
penalty payments in the case of the other four licensees
varied between 3.5% and 0.4%. From among universal service
licensee, it was DÉMÁSZ Nyrt. again that achieved the
highest ratio of penalty payments (35%), while this ratio was