AUSTRIA: COMPETITION IN ELECTRICITY MARKET

Article Abstract:

Walter Boltz, head of the Austrian electricity watchdog, estimates that electricity bills in Austria will fall by a total of about Sch 10bn as a result of the deregulation of the market, which started in 1999 and will be completed in October 2001. On the other hand, the doubling of the electricity levy in July 2000 amounts to Sch 5bn annually. Boltz says that two-thirds of Austria's electricity sales are re-negotiated as a result of the deregulation. Most of the re-negotiated volume is by electricity purchase cooperatives. According to Boltz, all Austrians will have a choice of three electricity suppliers when the market is liberalised entirely in October 2001. Suppliers are already luring new clients with prices up to 20% below the current price levels. Among the cheapest suppliers are Raiffeisen Wasserkraft and Switch. Raiffeisen Wasserkraft is a joint venture of Raiffeisen Ware Austria (RWA) and Verbundgesellschaft. The country's biggest electricity company is thus entering the final client market. In the next three years, Raiffeisen Wasserkraft aims to gain 50,000 clients. Switch, the cheap electricity supplier of the EnergieAllianz of EVN, Vienna utility company Wiener Stadtwerke , Bewag and Linz AG, offers prices that are up to 40% below those of its parents. The company aims to gain 150,000 clients within five years. There are about 2.5mn households and about 500,000 businesses in Austria. Boltz estimates that a electricity discounter needs more than 100,000 clients to be viable.

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AUSTRIA: TOWARDS COMPETITIVE ELECTRICITY MARKET

Article Abstract:

Walter Boltz of PricewaterhouseCoopers estimates that no more than 5-7% of Austrian households will change electricity suppliers when the market is deregulated fully from October 2001. In Germany, about 2% of private electricity consumers changed suppliers in the last two years. Already ahead of deregulation, private electricity consumers have seen power prices fall by about 10%, and they may see another fall by one-third yet. It is estimated that in the medium term the electricity price for private households in Austria will be about Sch 1.5 per kWh, including taxes and duties. It is estimated that a power company in Austria earns no more than Sch 300 with a household client per year. However, the margins for power companies for deliveries to private households in Austria are more than twice those in Scandinavia, where they are about Sch 0.025 per kWh. Boltz estimates that an electricity supplier needs at least 100,000 clients in order to make money with small-scale clients. He sees trade groups (a means to increase customer loyalty) and mixed suppliers (electricity, gas, water, internet and telephony) to have the best chances of success. He predicts that no more than 2-3 electricity brands will survive on the Austrian household electricity market. Beside Energie Austria and E&S (sales joint venture of EVN, Wienstrom and ESG), Yello of Germany and at least another foreign supplier are expected to enter the Austrian household electricity market.

Sales, profits & dividends

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AUSTRIA: CHEAP POWER FROM EVN

Article Abstract:

EVN wants to strengthen its image as the cheapest power supplier in Austria. The company reduced electricity prices in the region of Lower Austria by 7% on the average at the beginning of March 2000. According to EVN, especially companies will profit from the price reduction. The electricity bill of small enterprises should be reduced by 30%. A household is to save Sch 277-714 per year, a small company Sch 6,832 and a medium-sized enterprise Sch 9,627 per year.

Energie- Versorgung Niederosterreich AG

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