What is meant by Open Market?
Market Opening
Pursuant to the Act LXXXVI of 2007 on Electric Energy (Electricity Act), the conventional public utility supply of electric energy, earlier available together with the liberalized electric energy market, is discontinued as of 1 January 2008, and has been replaced by an open market sale of electric energy along with a universal electric energy service.
The supply of consumers in a competitive market environment is the result of a multi-stage change in Hungary’s electricity supply market. The first stage made it possible for the biggest consumers, exceeding an annual consumption of 6.5 GWh, to freely select one of the electricity suppliers then present on the market. As of 1 July 2004, the second stage of the market opening entitled all non-household consumers to obtain electric energy from any optional supplier instead of their public utility supplier. From 1 January, 2008, in the third stage of the market opening, the option of free supplier selection became available to all, while still not being mandatory for all consumer segments.
Who are competitive market consumers?
Since the beginning of this year, those business consumers whose total nominal connection capacity on all supply points exceeds 3x50 A - 3x63 A from 1 January, 2009 - are obliged to obtain the necessary electric energy by selecting from competitive market offers. Only household consumers and those business consumers whose total nominal connection capacity does not exceed 3x50 A - 3x63 A starting next year - can stay within the more protective scope of the universal service, although the purchase of electricity on the competitive market is an option open to them as well.
New price structure
The price of electric energy for end users is made up of two components: a universal per-voltage-level grid access fee that is regulated by law - current rates of charge available on the Hungarian Energy Office website (www.eh.gov.hu) -, and a competitive electricity tariff, which is different for each supplier and which is regulated solely by market conditions and retailers’ considerations. Our company group issues a single integrated bill instead of separate grid access and distribution bills for simpler administration, listing the grid access fee and energy charges in separate rows of the same bill.
New contracts
Energy trading, electricity network operation and connection establishment have become independent of each other on the open market. Accordingly, competitive market consumers need to have three separate contracts instead of the one customary with public utility supply. The most important of these is the distribution agreement to be concluded with a freely selected competitive market supplier, determining the manner and price of obtaining energy, in addition to which a network use agreement has to be made along with a network connection agreement based on regulation by authorities.
Profiled and time-series consumer groups
The settling of accounts between retailer and consumer continues to be based on meter reading. Consumers are grouped as follows: profiled consumers with yearly meter reading, grouped into categories (so-called profiles) based on their consumption patterns, and consumers with time-series accounts, whose nominal connection capacity exceeds 3x80 A, and have installed remote metering based on 15-minute readings.
Establishment of remote meter reading
For consumers with a low-voltage connection capacity exceeding 3x80 A, a remotely accessible meter capable of recording load curves, a modem and an optional line switch is needed to purchase electricity on the liberalized electric energy market. The above mentioned equipment is provided and installed by the authorized network operator, but the consumer is responsible for the establishment, the obligatory continuous provision and the expenses (including the subscription) of a data connection that enables remote metering.
In case of a low-voltage connection capacity not exceeding 3x80 A, the consumer has a profiled account, for which the current metering system is suitable (following optional reprogramming), so there is no need for the establishment of remote metering. It is important to know that in case of medium-voltage consumption it is necessary to establish remote meter reading irrespective of capacity.