The Study of Adaptive Strategies of Public Electricity Retailer Under Power Industry Transformation 

Abstract:

The new electricity law divides electricity supply industry into power generation, transmission&distribution and electricity retailing, and opens up the renewable electricity generation and green retail markets. Transmission and distribution industry is state-owned and monopolized and can run the retail business after approved by the electricity regulatory authority. Power industry transformation is carried out in two phases. The first phase of ‘green energy goes first’ opens renewable energy market where renewable generation and green retailer can wholesale, wheel or direct supply of green electricity to users. The electricity retailer is divided into public utility retailer and renewable retailer. The public utility retailer bears the responsibility of power supply and retail electricity price is regulated. Its sale of electricity has to meet the power supply carbon emission coefficient standard. At this stage, Taipower is still an integrated utility company that operates, generation, transmission /distributes and retail business at the same time, subject to accounting separation. The second phase of the reform will be started at 6th to 9th years from now. Taipower needs to unbundle its grid business from generation and retailing legally, allowing Taipower maintaining as a mother holding company to run two subcompanies, i.e. generation and transmission/distribution/retailing. After the management of supporting mechanism, the smooth operation of the rule of law, and the mature and stable market are developed, another revision of the current electricity law will further open the traditional power generator and retailer into the market freely to buy and sell electricity, and also allow wheeling and direct supply activities. Accordingly, the public utility retailer is facing the market competition pressure. For the various issues of business and user needs it needs to rethink to develop the best strategy to avoid the loss of customers after the release of switching options of retailers. The purpose of this project is to explore and study the possible problems and competitive strategies in the face of the opening of electricity retail market and the retailer switching options for the customers. How to adjust the public retail organization, strategy and business rules to prevent the loss of users and enhance the operational efficiency will be the core tasks of the study. The results of this study are recommended to the relevant decision makers for the corporate strategy planning.