ERRA Tariff/Pricing Committee Meeting, February 6-7, 2006 Warsaw, Poland Comparison of the ERRA and the EUROSTAT Electricity Price Statistical Databases Mr. Ede Tresó leading senior advisor Electricity Price Preparation Department Hungarian Energy Office
ERRA Electricity Tariff/Price Database 1. Based on principles, methodologies and classifications of IEA (International Energy Agency) electricity tariff database 2. Main features: Official average prices for big participants of electricity industry Page 2
ERRA Electricity Tariff/Price Database Derived quantities (electricity consumption/capita, GDP/consumption, etc.) Participants (supposed unified model) - producers - wholesaler(s) - [retailer(s) (distributors)] end-user consumers: residential: mainly households non-residential: all others (industrial, commercial, agricultural, etc.) Page 3
ERRA Electricity Tariff/Price Database Average price: (2) revenue (justified total cost) / quantity sold (1) official (authority) average price (e.g. in case of price-cap) Shows average authority (official) price levels and derived indices Includes electricity tariff systems of member states too Starting situation: mainly state ownership of electricity systems, lack of competitive market, information for ERRA countries theirselves Page 4
EUROSTAT Electricity Price Database Only for end-users [Households (residential); Industry (non-residential)] Shows yearly average price for "typical" consumers calculated by tariffs Residential consumers Code kwh/y Consumption kwh/y (night) Yearly average price USD/kWh Da 600 Db 1 200 Dc 3 500 1 300 Dd 7 500 2 500 De 20 000 15 000 Page 5
EUROSTAT Electricity Price Database Non-residential consumers Code Ia Ib Ic Id Ie Yearly consumption kwh 30 000 50 000 160 000 1 250 000 2 000 000 Contracted kw 30 50 100 500 500 capacity Yearly hours hours 1 000 1 000 1 600 2 500 4 000 of utilisation of contracted capacity Yearly USD/.......... average price kwh "Peak/off peak" consumption rate is also given for each consumer type Page 6
EUROSTAT Electricity Price Database Non-residential consumers Code If Ig Ih Ii Yearly consumption kwh 10 000 000 24 000 000 50 000 000 70 000 000 Contracted kw 2 500 4 000 10 000 10 000 capacity Yearly hours of hours 4 000 6 000 5 000 7 000 utilisation of contracted capacity Yearly average USD/........ price kwh "Peak/off peak" consumption rate is also given for each consumer type Page 7
New challenges, requirements Privatization Price transparency Unbundling Liberalization market electricity price(s) as "product" prices regulated monopoly network and system operation prices "New" prices: weighted (regulated + market based) national average Demands of subscribers on more selective price data - individual consumers (groups) - (new) composition of prices Page 8
Changing EUROSTAT database due to new challenges - New proposal (of Unit G-4 "Energy Statistics", EUROSTAT) for consumer categories and the methodology - Possible entry into force: 1 st quarter 2007. Residential consumers Very small Small Medium Large Very large Annual electricity consumption (kwh) Lowest Highest < 1 000 1 000 < 2 500 2 500 < 5 000 5 000 15 000 > 15 000 Page 9
Changing EUROSTAT database due to new challenges Non- residential consumers Small business and professional activities Small enterprise Annual electricity consumption (MWh) Lowest Highest < 20 20 < 500 Small/Medium enterprise Medium enterprise Large enterprise Very large enterprise 500 2 000 20 000 70 000 < 2 000 < 20 000 < 70 000 < = 150 000 Page 10
Changing EUROSTAT database due to new challenges - prices paid by end-consumers [households (residential), industry (non-residential: industry, business and services)] classified by standard consumption bands - data collection: twice/year (January, July) for previous 12 months average in national currency - prices: all charges minus rebates, premiums; excl. initial connection charges - weighting: by consumer bands market shares of electricity operators surveyed market share: by amount of electricity sold Page 11
Changing EUROSTAT database due to new challenges - three levels of prices: prices excluding taxes prices excluding VAT and other recoverable taxes prices all taxes included - once per year (January): information about compilation system: number of operators, weighting methods, volumes, etc. information about main factors affecting the prices, about voltage limits, etc. information about rates and method of calculation of taxes and tax application breakdown of price into main components Page 12
Changing EUROSTAT database due to new challenges - breakdown methodology of complete (total) price (CP) of a consumption band CP = "Network" price + "Energy and Supply" price + "Taxes and levies" Network price: T and D tariffs related revenue per consumption (kwh) related to the given consumer band "Energy and Supply" price: CP "Network" price All kind of taxes and levies "Taxes and levies" (Tx and L) additional breakdown: - Tx and L on network" prices - Tx and L on "energy and supply" prices or / and - VAT and other recoverable taxes. Page 13
Changing ERRA database due to new challenges Proposals 1. To leave actual ERRA database unchanged, as it reflects specifically official prices and it will be transformed step-by step into "last resort" or "universal service" database 2. To point out in more explicit way, that the actual database contains official, authority regulated prices 3. All changes for improvement should be managed as additions to the actual database 4. To take into account general and subscribers' requests for more selective data (typical consumers or consumption bands, breakdown of prices) to select some "typical" consumer types (bands) Page 14
Changing ERRA database due to new challenges Questions to be answered 1. To represent also market prices, or not? 2. If yes, to breakdown the public (regulated) and the market prices into a) Production + Trade + System usage + Taxes, or b) "Energy and Supply" + "Network" + "Taxes and levies", or not? 3. To select "typical" consumers from actual EUROSTAT database or to take consumer bands and new terminology immediately from new EUROSTAT classification officially not passed yet? Page 15
Changing ERRA database due to new challenges New additional price collection proposals Generally: not to use new EUROSTAT breakdown and terminology until final approval (?) 1. Residential prices, regulated (no market prices) a) breakdown: no; only complete price without and with taxes b) breakdown: "Production" + "Trade" + "System usage" + "Taxes" c) breakdown: Energy* + (SO + Trm + D) + Taxes SO System operation (incl. ancillary services); Trm Transmission; D Distribution * incl. trading activities Page 16
Changing ERRA database due to new challenges New additional price collection proposals "Typical" consumers from actual EUROSTAT classification Regulated residential prices, US cents/kwh Code Consumption Energy* System usage Taxes Total kwh/y Allday Night SO Trm D Subtotal Da 600 0 Dc 3500 1300 Dd 7500 2500 SO System operation (incl. ancillary services); Trm Transmission; D Distribution * incl. trading activities Energy = Total Taxes System usage Page 17
Changing ERRA database due to new challenges New additional price collection proposals 2. Non-residential prices, weighted (regulated + market) a) breakdown: no; only complete price without and with taxes b) breakdown: Production + Trade + System usage + Taxes c) breakdown: Energy* + (SO + Trm + D) + Taxes SO System operation (incl. ancillary services); Trm Transmission; D Distribution * incl. trading activities Page 18
Changing ERRA database due to new challenges New additional price collection proposals "Typical" consumers from actual EUROSTAT classification Non-residential regulated prices, US cents/kwh Code Consumption, kwh/y Contracted Consumption Energy* System usage Taxes Total capacity, for peak** off-peak** total kw weighting***, SO Trm D Subtotal GWh Ia 30 000 30 Ic 160 000 100 Ie 2 000 000 500 Ig 24 000 000 4 000 Ii 70 000 000 10 000 * incl. trading activities ** peak/off peak consumption ratio will be given *** - total consumption of consumers Ia Ii (by adapted for market consumers consumption bands; see p. 20,23) Energy = Total Taxes System usage Page 19
Changing ERRA database due to new challenges New additional price collection proposals "Typical" consumers from actual EUROSTAT classification Non-residential market prices, US cents/kwh Code Consumption Consumption bands, kwh/y System usage Taxes for Energy* weigthing**, lowest highest SO Trm D Subtotal GWh Ia 0 49 Ic 100 499 Ie 2000 5 999 Ig 18000 36 999 Ii 70000 > 70 000 * incl. trading activities; weighted by operators inside market band * total consumption of market consumers with consumption inside consumption bands, adapted to Ia Ii consumers Energy = Total Taxes System usage Page 20 Total
Changing ERRA database due to new challenges New additional price collection proposals "Typical" consumers from actual EUROSTAT classification Non-residential national average prices, US cents/kwh Code Consumption bands, kwh/y System usage Energy* lowest highest SO Trm D Subtotal Taxes Total Ia 0 49 Ic 100 499 Ie 2 000 5 999 Ig 18 000 36 999 Ii 70 000 >70000 * incl. trading activities Total = W [Energy (R+M)] + W [(R+M)(SO + Trm + D)] + W (Taxes) W - weighted; R - regulated; M - market Page 21
Changing ERRA database due to new challenges Adapted to Da De consumers consumption bands in Hungary Residential consumer Code Annual consumption, kwh/y night, kwh/y Consumers with consumption, MWh/y Da 600 0-2 Db 1 200 Dc 3 500 1 300 2-5 Dd 7 500 2 500 5-10 De 20 000 15 000 > 10 Page 22
Changing ERRA database due to new challenges Adapted to Ia Ii consumers consumption bands in Hungary Non-residential Code Annual consumption, kwh/y Contracted capacity, kw Consumers with consumption, MWh/y Ia 30 000 30 0-49 Ib 50 000 50 50-99 Ic 160 000 100 100-499 Id 1 250 000 500 500-1999 Ie 2 000 000 500 2000-5999 If 10 000 000 2 500 6000-17999 Ig 24 000 000 4 000 18000-36999 Ih 50 000 000 10 000 37000-69999 Ii 70 000 000 10 000 70000 contr. cap.: 17500-37499 kw 37500-62499 kw 62500 kw Page 23
Thank for your attention! Ede Tresó Hungarian Energy Office Phone number: +36(1)459-7729 Fax number: +36(1)459-7730 E-mail: tresoe@eh.gov.hu Page 24