The liberalization of the electricity market for household consumers intensifies competition more and more on the supply market. New groups are formed – implicit suppliers vs new ones –, that place themselves in new strategic points – linked offers, dumping prices and new fronts are opened – such an example is the review of Law 123/2012. We have discussed with Mircea Pătrăşcoiu, the general manager of Electrica Furnizare, about how the company stands on this dynamic background.

Dear Mr. Mircea Pătrăşcoiu, the liberalization of the electricity market opens a new opportunity for independent or small suppliers: households. Do you think that this market arouses enough interest so that suppliers accustomed with large customers may turn their attention to household customers?

As we speak, in Romania we have a market counting more than 8.6 million places of consumption, according to the ANRE report at the end of 2015, and it certainly arouses the interest of electricity suppliers, some of which have recently entered this market, while others are now planning to enter it, according to the recent statements of some suppliers and operators.

We believe that the strategy of entering the household consumers market should take into account, first of all, the applicable legislation on the interaction with consumers. An example is the provision regarding the proximity to the customer, i.e. the constraint of having local and regional information points located no more than 50 kilometers away from the places of consumption. Also, but not least, it should take into account the capacity of observing the deadlines set forth in the electricity supply standard of performance.

The liberalization of the supply market is an opportunity, but on the other hand it also involves a risk potential. In some cases, consumers are misinformed by all kinds of offers which, at first sight, might seem advantageous. Therefore, consumers must be very careful when they analyze the offers they receive, some of them promising even exemption from paying certain charges, which is a violation of the applicable legislation.

How many (household and non-household) customers do you currently have and how much do they weigh out of the total power consumers in Romania? Is Electrica Furnizare capable of keeping this market share or maybe even extend it?

Electrica Furnizare S.A. is currently a supplier for approx. 3.6 million customers in a regulated regime, out of more than 8.6 million. We currently have a market share of 21.84%, being the largest electricity supplier of Romania, both on the regulated market and on the free market. On the free market, at the end of 2015, Electrica Furnizare S.A. increased its market share to 14.72%, as compared to 11.70% in 2014.

Our plan is to strengthen our lead position on the electricity market, using a rationalized network of commercial offices, the local and regional information points existing in the traditional area, as well as by extending the business establishments network outside our supply area.

The success in selling electricity to new household customers depends on a powerful doot-to-door sales team and on the capacity to finance the expansion of a business with small volumes, considered individually. How will Electrica Furnizare act in the following years in this branch?

Electrica Furnizare S.A., the No. 1 national supplier of electricity, already has the experience, the sales team, the required logistics and financial capacity to maintain and even constantly increase its market share.

We permanently analyze the evolution of consumer behaviour and their needs, as well as the evolution of the retail market, thus being capable of adapting to a dynamic market, in a complex environment, and always being ready for any change.

Will Electrica Furnizare make offers outside the regions served by Electrica’s distribution subsidiaries as well? How does the sales strategy look like and through what channels are you going to implement it?

We opened in 2014 the first customer relations centre in the capital city of Romania, thus being the first of the traditional suppliers to act in that direction. This project turned out to be a success, therefore we are now considering to open new business establishments outside our supply area. We also envisage the development of other sales channels. These will support the “current contact” facilities with all categories of customers, by using both traditional means and new technologies.

Do you plan to obtain a gas supply license as well, to be able to offer complete electricity-natural gas packages? Do you estimate that in the future you will create more complex services packages containing other services as well (repairs for customers, energetic efficiency, insurances, telecommunications etc)?

Among the main objectives declared by Electrica Furnizare for year 2016 counts the diversification of the services and products offered to customers. To that effect, Electrica Furnizare also analyzes the opportunity of developing the business portfolio in the field of natural gas supply, as well as in connected services. As far as the development of additional services is concerned, I am able to tell you that we already have the requisite permits to make an energy audit, and in the near future we are about to launch other services as well, allowing us to meet the needs of our current and future customers.

Our attention is directed to the customer, that is why we intend to continue modernizing the customer relations premises, to provide quality and easily accessible services, such as online payment, the mobile application, the electronic invoice etc.

What is the policy or strategy of Electrica Furnizare regarding the trends in using energy, trends that have started emerging in Romania as well (falling price for energy, compensation of the income from other services, energy efficiency etc)?

According to the official statement of the National Institute of Statistics, the final consumption of electricity during the 1st quarter of 2016 was 8.5% higher than during the 1st quarter of 2015. Our target is to increase the turnover by carrying out secondary activities and by offering packages of energy efficiency services, both to non-household and to household consumers.

Do you consider purchasing an independent gas or electricity supplier in order to take advantage from an already built portfolio?

We exclude no possibilities that could lead to the development of our business under optimal conditions and which are connected to the energy market, or which could increase the value of the services provided by Electrica Furnizare S.A.

If you were to identify two important factors affecting – or even distorting – the price of energy and the purchase structure, what would they be?

The way we see it, the electricity market should be carefully monitored. The trade price on the day-ahead market is much too fluctuating, there being a diversity of factors that could influence the evolution of prices. As far as the purchase structure is concerned, it derives from Romania’s energetic development directions that generated the replacement of traditional sources with the production of green energy. The balancing of the purchase goods, depending on the sources, is made with the restriction imposed by obtaining a competitive price.

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The full version of this article can be read in printed edition of energynomics.ro Magazine, issued in May 2016.

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