Consumer empowerment: the consumer´s role in energy markets May 15, 2012
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Transcript of Consumer empowerment: the consumer´s role in energy markets May 15, 2012
Consumer empowerment: the consumer´s role in energy markets
May 15, 2012
Presented by:Bernardo Altamirano Rodríguez
Federal Consumer AttorneyConsumer Protection Federal Agency (Profeco)
STRIKING A BALANCEIN THE MIDST OF CHANGE
May 13-16, 2012Québec City, Québec (Canada)
PROBLEM
Marketplace
• Development of energy markets
• Increased of private investment in supply issues
• Tendency to reduce subsidies
Consumer
• Strengthening protection via prevention
• Impact on regulation
• Social engagement mechanisms for audit
Electricity
Consumer Protection
There are 28.6 millions of homes around Mexico. 98.2% have electric services.
1970 1990 2000 2005 20100.0%
10.0%
20.0%
30.0%
40.0%
50.0%
60.0%
70.0%
80.0%
90.0%
100.0%
58.9%
87.5%95.4% 97.5% 98.2%
Percentage of Homes with Electric Services
Source: INEGI, Populations census 1970, 1990, 2000 y 2010
Marketplace Context
Regulatory Framework
Political Constitution of the United Mexican States• Only the Nation carries out the activities to generate,
conduct, transform, distribute and supply electricity. There are no concessions to private stakeholders.
Electricity Public Service Law• The State supplies electric services through the Federal
Electricity Commission (CFE). Mexican Official Standard (NOM’S)
• Safety of electrical installations, efficiency in energy system.
Consumer Protection
Economic Effects of Regulation• State monopolized service.• There is no competition between particulars.• Limited protection of consumer´s rights.
Consumer Protection Scope• Submission of complaints and denunciations before
Profeco• Continuity of service during the complaint process at
Profeco.
Profeco’s Action
2006 2007 2008 2009 2010 20110%
10%
20%
30%
40%
50%
60%
70%
80%
90%
0
2,000
4,000
6,000
8,000
10,000
12,000
14,000
16,000
6,419
7,813
6,348 6,590
11,157
14,17473%
60%
67%
75%78%
80%
Number of Complaints and Percentage of Settlement
Perc
enta
ge o
f set
tlem
ent
Num
ber o
f com
plai
nts
On 2011, there were 14,000 complaints. It means that 5 out of 10,000 homes had irregularities in the electric service.
The last year were settled 8 out of 10 cases in favor of consumers.
Prospective
Spread of information about electric consumption in the Consumer Website.
Alliance with the service supplier (CFE) to quickly handle complaints.
Preventive protection scheme through adhesion contract registration.
Gasoline
Consumer Protection
Marketplace Context
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 20100
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
9,000
10,000
4,7385,139
5,5646,166
6,7327,172
7,5548,057 8,351 8,556
9,106
Number of Gas Stations in Mexico
YearInternal Sales of Automobile Fuel
(Tbd*)
2007 760.9
2008 792.6
2009 792.4
2010 802.2
*Tbd: Thousands of Barrels per DaySource: PEMEX Annual Report, 2011 http://www.ri.pemex.com/files/content/pemex%20Anuario_a.pdf
Marco Regulatorio
Political Constitution of the United Mexican States• Only the Nation can exploit natural resources, such as oil and its
derivatives, without franchising.
Regulatory Law for the 27th constitutional article about Oil Sector• Private capital investment for fuel distribution (Gas Stations)
Mexican Official Standard (NOM’S)• Specifications for measurement instruments aimed at the proper sale.
Consumer Protection
Economic Effects of Regulation• State monopolized exploitation through the state-owned company
PEMEX.• Private capital investment for distribution through franchises schemes.• Administrative verification of distributors.• Complex consumer protection.
Consumer Protection Scope• Verification of Gas stations and calibration of dispensers• Submission of denunciations before Profeco and Gas station Traffic
Light.• Fines application, suspensions and closures.
Consumer Protection
2007 2008 2009 2010 20119,000
9,500
10,000
10,500
11,000
11,500
12,000
12,500
75.00%
80.00%
85.00%
90.00%
95.00%
100.00%
10,907
11,408 11,420
10,169
12,177
90.67%
94.52%95.62%
83.37%
97.00%
Annual Verifications carried out by Profeco
Num
ber o
f ver
ifica
tions
Perc
enta
ge re
spec
t the
regi
ster
Year Fine Amount$USD
2007 $631,856.37
2008 $2,330,466.9
2009 $5,627,187.6
2010 $ 1,547866.1
2011 $1,161,071.7
Prospective
Transparency in the verification activities and outcomes.
Information mechanisms as the Traffic Light and its mobile application (app).
Promotion of the denunciation culture against suppliers.
Technical standard that incorporates cutting edge technology for dispensers.
Liquefied Petroleum Gas
Consumer Protection
Marketplace Context
Year Number of Plants
2007 1,319
2008 1,343
2009 1,343
2010 1,353
2011 957
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 20100.00
0.50
1.00
1.50
2.00
2.50
3.00
3.50
4.00
4.50
2.14
2.77
3.964.21
3.72
Domestic Sales Amount of L.P. Gas (B, US Dollar)
Regulatory Framework
Political Constitution of the United Mexican States• The Nation has the domain of all natural resources such as fossil
fuels (solid, liquid, gas).
LP Gas Regulation• Regulation of the licenses for transportation, storage and distribution
of LP Gas; first-hand sales and final-users sales.
Mexican Official Standard (NOM’S)• Technical and safety specifications for containers, test methods for
net content of cylinders and measurement instruments.
Consumer Protection
Economic Effects of Regulation• Licenses for LP Gas storage, transportation and distribution, granted by the
Ministry of Energy.• Concurrent competences.• Regulation through contracts for «Fist-hand sales» by Pemex and state-
regulated prices.• Preventive consumer protection through plants and vehicles' verifications.
Consumer Protection Scope• Verification of LP Gas plants and transports.• Submission of complaints and denunciations before Profeco• LP Gas meter calibration • Penalty administrative proceedings and fines application
Profeco’s Action
2007 2008 2009 2010 20110
1,000
2,000
3,000
4,000
5,000
6,000
1,287 1,213 1,047 1,036
1,836
5,559
2,725
2,0791,808
3,3423,067
1,486
2,226
1,799
3,504
Plants, Vehicles and Tanks Verifications
Plantas Vehículos Auto-tanques
Year Fines$USD
2007 $5,739,953.6
2008 $10,821,555
2009 $6,672,151.6
2010 $2,519,299.8
2011 $1,227.990.3
Prospective
Transparency in verification functions
Spread of verification outcomes through the Consumer Website
Promotion of a smart consumption and denunciation culture
Revision and strengthening of the technical standards to be fulfilled by suppliers
Natural Gas
Consumer Protection
Marco Regulatorio
Political Constitution of the United Mexican States• The Nation has the domain of all the natural resources such as fossil
fuels (solid, liquid, gas).
Natural Gas Regulation• First-hand sales and activities that are not part of the petroleum
industry on natural gas matter, to assure its efficient supply.
Mexican Official Standard (NOM’S)• Safety requirements for the exploitation and distribution facilities
through pipelines.
Consumer’s Protection
Economic Effects of Regulation• Trunk distribution by Pemex – Local distribution concession, upon
demand.• Competence among distributors to end users.• Consumer protection through the reception of complaints, settlement
and advice.
Consumer Protection Scope• Advice on hiring and contract terms• Spread of information about businesses behavior• Submission of complaints and settlement procedure before Profeco• Penalty administrative proceedings and fines application
Prospective
Spread of information on complaints and proceedings at the Consumer Website
MoU with the Energy Regulatory Commission (CRE) in order to generate information to foster a smart consumption.
Service providers bond to a scheme for an expeditious attention to consumer complaints through the on-line alternative dispute resolution (Concilianet)
Conclusions
Consumer Protection
Consumer Protection in Regulated Markets
Consumer protection schemes differ from the changes in the competence structure of the marketplace.
Profeco acts via “prevention” through verification activities for the fulfillment of the Mexican Official Standards regarding the energy sector.
It also attends users through receiving complaints against suppliers and carrying out settlement procedures.
Profeco bets for providing consumers with information through the Consumer Website and smartphones applications (apps).
Thank you!
@beraltamirano@profeco
www.profeco.gob.mxwww. Consumidor. gob.mx