Suppliers vying to lure top-grade customers, gains made

Main power utility PPC’s recent ten percent discount offered to punctual professional category customers in an effort to either keep or regain them does not seem to be producing results.

On the contrary, latest electricity market data indicates that punctual customers are on the lookout for the best deals being offered in the market, not only in terms of prices but overall services provided as well.

Independent suppliers increased their overall market share by roughly one percent in February, to 6.53 percent, which may not seem spectacular but, in fact, represents a significant gain considering the power utility’s long-running dominance. PPC’s share fell to 93.47 percent in February from 94.4 percent in January.

Independent suppliers, seeking to move into a market that has been ruled as a near monopoly by PPC, are intensifying their campaigns in an effort to lure punctual consumers belonging to categories in which lower rates are not offered. They make up about half the market.

Certain categories – farmers, vulnerable social groups, major-scale industrial enterprises, and the public sector – are already offered lower rates by the utility. The independent suppliers will focus their efforts on the rest, as long as they have proven track records as punctual customers.

Consumers who have not been able to remain punctual have increased the level of unpaid overdue electricity bills owed to PPC to an alarming level of about 2.3 billion euros.

Independent suppliers are particularly interested in attracting businesses with medium-voltage connections, as well as professionals and households in the low-voltage category using large amounts of electricity and being charged high tariffs for their consumption. The aforementioned are being targeted as top-grade potential customers by the independent suppliers.

Not surprisingly, although independent suppliers have so far captured just 6.53 percent of the electricity market, their share of the business category and medium-to-high voltage industry categories has skyrocketed to 20 percent, according to market data supplied by PPC.

In more recent times, PPC has tried to stop the outflow of customers belonging to such categories. The utility is making counter-offers to customers who have reached deals with rival suppliers and are seeking to transfer.

This is an ideal period for market share gains by independent suppliers. They are buying at considerably low prices in the wholesale market – the System Marginal Price (SMP) is at 40 euros per MWh – and, therefore, have leeway to offer even more competitive prices.

“Essentially, the battle is not being fought between PPC and alternative suppliers, but between the independent suppliers, themselves, who are seeking to gain the prime-quality customers. Prices are now being determined by the competition between the independent suppliers,” a sector authority told energypress.

Whatever the case, consumers are bound to gain from the increasingly beneficial offers being made amid this increasingly competitive environment.