Methods and procedures requirements for monitoring and improvement of supply quality in Hungary

The paper begins with presenting the development of the electric power industry regulation towards the market liberalization in Hungary. Then the paper presents principles of the quality regulation both when the unbundling and privatization of the industry was taking place during the years 1995-2002 and when the liberalization of electric power industry began in 2003. The paper covers the methods and procedures elaborated in Hungary for monitoring and supervising supply quality. Description of the following applied methods are presented: supply security of high and medium voltage network; consumers´ satisfaction survey; guaranteed standards; continuity of supply; consumer service monitoring. Based on the experiences learned until 2002 a new supply quality regulation regime is introduced in 2003 for the liberalized electricity market. Detailed description of applied methods and procedures are presented. This includes setting performance standards for expected level and minimum standards of quality of supply. Improvement targets for continuity of supply are prescribed. The report outlines the quality incentive/penalty system for distribution introduced from 2003 in Hungary via link between quality performance standards and distribution fee. It means that after Italy, Norway and United Kingdom Hungary was that introduced the quality incentive regulation in Europe.