Opening the Electricity Market - We Think and Act as Partners

TOP Clients

Consumption
(TWh)

Share of TOP customers
on overall consumption

TOP cliens (over 2 GWh)

With individual prices

TOP Clients in Year 2005
During 2005, Západoslovenská energetika (ZSE), a.s., maintained it’s the individual approach with the TOP group of customers, those whose annual consumption at all consumption points exceeds 2 GWh of power. ZSE keeps its dominant position in this area among all Slovak power-distribution companies.

Due to a specific way of distribution and fluctuating consumption, ZSE takes care of its customers through its professional key account managers (KAM). This approach helped the Company improve the level of customer service and bring it to a comparable level of other products and services which have been market-driven for a long time. Our TOP customers appreciate highly this individual approach and use the KAM services to deal with all their requests.

According to legislation, as of 2005, everyone except households can become a Company customer. The continuous liberalization of the power market is reflected in the increasing number of individual contracts, with set prices, based on customers’ individual needs. In 2005 ZSE signed 60 contracts with individual prices while the balance of contracts were for new services introduced for all customers at the beginning of January 2005. Západoslovenská energetika is aware of evolving competition in the power supply market and is ready to deal with this challenge by utilizing its long-term experience in the Slovak market to provide higher quality services to all its customers.

Business and Retail Clients
The department of regional customer care supplied power and related activities for more than 42,000 customers.

At the beginning of 2005 the Company introduced a new operational system, SAP with modules ISU and CRM for preparing contracts for power supply. New legislation required signing new contracts for power supply and distribution with all customers.

In spite of market liberalization, which was effective January 1, 2005, we were able to keep 99.9% share of the market in the commercial customer segment. We provided services for these customers through 7 business offices and 10 mobile sales representatives.

Customer Service
The year 2005 was marked with significant changes that impacted our customers and the level of services in the Call Center and Billing Center. At the start of 2005, the new information and billing systems SAP/ISU were implemented for the commercial segment followed in May for the residential market. These changes required all customers to be billed to March 31, 2005 in the previous SGC system. Installation and testing of the new system needed a several-week interruption due to data migration which limited our ability to serve our customers. Content and structure of bills had to be changed to comply with the legislative requirements. To optimize the reading of meters, the reading cycle has been changes from six months to 12 months.

We also introduced a system for monitoring customers’ accounts and their payments (bank information about payments to and from customers, preparation of notices, calculation of interest, payments schedules, etc.) all which required signing new contracts with banks and the Slovak Postal Service. In addition, we have developed a new SAP module called SVP for tracking past due receivables. During the year we eliminated errors that occurred during the implementation of the system.

All of these changes resulted in an enormous number of customer requests for clarification and information on their accounts. Due to the high volume of enquiries, the Company experienced a delay in responding to them immediately and this resulted in some degree of customer dissatisfaction. This situation was constantly monitored and managed to correct it as soon as possible. The Department of Customer Service increased the number of its employees in the Call Center to one hundred.

In 2005 we responded to 515,000 phone calls and 36,000 written requests which was an increase of 18% over the previous year.

The number of employees in the Customer Service department has stabilized and customers’ requests are again being immediately processed. Since then we have focused on the improvement of quality and effectiveness of the customer service.

Changes in Product Lines of the AdaptPower and CompactPower

Option to change the power supply order for the following quarter
When using products from the line AdaptPower and CompactPower, the customer has the ability to influence the price for the power supply through estimating correctly their future consumption. The customer orders a certain volume of power and interval of tolerance for the coming year broken down into four quarters of the year. To change the ordered volume and interval, in the past the customer was able to make the change at least 15 days before a new quarter started but ZSE has now changed this deadline for 2006 from 15 to 10 days.
Adjustment of the intervals of tolerance
In 2006 the intervals of tolerance of the ordered supply will be changed and their scope will be significantly extended. With the products AdaptPower and CompactPower, the customer orders the volume of power based on an estimate of future consumption. If the customer uses less power than was ordered, the difference is charged in the price for the power not used. The tolerance for not used power is 3%.

Advantages
A customer will not be penalized for any unused power 3% or less below the projected consumption.

If a customer consumed more power than ordered, the difference in a price range stipulated for exceeding his interval of tolerance will be paid. The best price is for the lowest interval of tolerance. In 2006, ZSE will provide the extended interval of tolerance at 0-3, 0-6, 0-9, and 0-15% compared to previous the intervals of 0-2, 0-4, 0-6, and 0-8%.

Advantages
- a higher probability to pay a good price for the power supply
- increase of the high level of tolerance from 8% to 15%
- decrease of payments for the unconsumed power
- decrease in total payments for the consumed power

Purchase of Electricity
In 2005 ZSE purchased 8,188,663 MWh of electricity. Of this volume, 6,463,714 MWh were purchased from domestic sources, which was 78.94% of the total volume. In addition, the Company purchased l,724,950 MWh of electricity abroad which was 21.07% of its total purchase.

Short-term trades with electricity surpluses continued in Slovakia in 2005. ZSE monitored the factors that affect its daily load diagram, purchased electricity during power shortages, and sold it when it had a surplus. This way we succeeded in optimizing electricity purchases and reducing fluctuations.
Through surplus trading, ZSE purchased 590,547 MWh and sold 459,122 MWh of electricity which was 1,049,669 MWh of total trades and a 178% increase from 2004. ZSE purchased 40,770 MWh of electricity from renewable sources, which is 0.5% of the company total purchases.

Environment
At ZSE we realize our responsibility for preserving optimum living conditions for future generations. Therefore, the environment we operate in is at the forefront of our interests.

ZSE strives to increase environmental protection by improving conditions of its facilities and equipment and turning them to into environmentally friendly, by improving its management processes, and by increasing the environmental awareness of the employees. The Company spends a considerable sum of money each year on these activities. In 2005 environment investments exceeded SKK 20 million.

In water management, ZSE creates conditions for ensuring the economical treatment of water sources and preventing their pollution. Our Company strictly follows the requirements of the Water Act that regulates treating water with hazardous substances. ZSE also follows the principles of the waste management – to utilize produced waste to its maximum capacity. In 2005 our Company focused on verification of the equipment containing polychlorinated biphenyls, the treatment of which is regulated by the Waste Treatment Act. ZSE was extensively involved in activities to protect birds – specifically by installing plastic spikes on power lines. In 2005 over 2,500 plastic spikes were installed on 22 kV power lines. To increase bird protection, ZSE also expanded its co-operation with the non-governmental organization “Ochrana dravcov na Slovensku” (Protection of Beasts of Prey in Slovakia). Resolutions for bird protection and the creation of bird-friendly power lines are also incorporated in the project LIFE – Nature in frames of which ZSE promised to invest SKK 10 million. Installation of protective devices will become a priority in the territories of the King Eagle. Last year, as a partner of the Project, we sponsored the exhibition
“Orol – bez koruny a predsa kráľom” (Eagle – with no Crown, yet the King) held from April to June in the Slovak National Museum.

The Company is also a member of the non-government organization called the Association of Industries and Environmental Protection.

Results achieved in 2005 correspond with the Company document entitled “Resolutions for Environmental Protection”.

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