Swedes relax power rules

February 8, 1999, 08:00 CET

Virtually all electricity consumers in Sweden will soon be able to change supplier free of charge and at a month's notice.

Due to be instituted by 1 November, this reform of statutory regulations has now been formally approved by the Swedish authorities.

The government has decided to drop existing requirements for interval metering in favour of a system of profile-based billing, which is regarded as the fastest and most cost-effective solution for opening up the market.

Sweden's power sector was deregulated in 1996, but the demand that consumers must install interval meters meant that actual trading has not been freed.

Under existing legislation, such meters must be acquired when transferring to a new supplier. They allow the local power utility to read off hourly consumption once a day.

The interval meters cost SEK 2,500 each and replace the existing meter, which is read annually. The requirement to install them also led to a six-month period of notice when changing supplier.

National grid operator Svenska Kraftnät will now develop a profile-based system on the Norwegian pattern. This involves calculating a household's expected consumption as the basis for billing. Actual consumption can later be read from a meter and bills adjusted accordingly.

This reform also means that the opportunity to change supplier free of charge will not be confined to consumers with a main fuse up to 25 amps.

A government-appointed committee has called for this limit to be raised as soon as possible to 200 amps, allowing many small companies and the farming sector to join the free electricity market.

An estimated 450,000 Swedish households - almost 10 per cent of the total - will change power supplier fairly quickly, says project manager Patrik Westander in Marketing's electricity unit.

He has been a key player in Statoil's active efforts to overturn the requirement for interval metering when swapping electricity source. This change will admit 4.5 million Swedish households to the open power market.

In the spring of 1998, the group took the initiative to establish the Consumers and Suppliers for a Free Electricity Market forum, which brought together various consumer organisations and companies to push the government towards the present reform.

Statoil has already established itself as the 11th largest electricity supplier in Norway, with more than 40,000 customers.