Opening of the electricity market on the territory of BiH
Opening of the electricity market in the Republic of Srpska and BiH
Dynamics of the market opening and participants in the electricity market
OPENING OF THE ELECTRICITY MARKET ON THE TERRITORY OF BOSNIA AND HERZEGOVINA
- The reform of the electric power sector in Bosnia and Herzegovina was initiated by signing the Electricity Policy Statement in 2000, adopting the entity Law on electricity, Law on transmission, regulator and system operator of electricity in BiH in 2002, Law on establishment of the company for transmission of electricity in BiH and Law on establishment of ISO for transmission system in BiH in 2004. This process was additionally reinforced by signing the Treaty on establishment of the Energy Community in the region of the South East Europe between EU and parties to the Athens Memorandum in 2005.
- The reform of the electric power sector is based on complying the legislation in Bosnia and Herzegovina with requirements and directives of EU within the scope of energy, protection of the environment, competition and renewable energy sources. It is necessary to make the ambient for the electricity market in BiH as the unique economic area along the whole territory based on the free and equal access to the transmission and distribution network. Gradual compliance of regulations shall create the regional electricity market.
- Establishment of the independent regulatory authority which has an important place in the process of the electric power sector reforming worldwide, and in Bosnia and Herzegovina as well, is the result of realizing that the policy offers safety, reliability, non-discriminatory services with reasonably created prices should be provided independently from the public power company, which had the monopoly for all electric power activities.
Monopolistic activities, such as the control over the transmission and distribution system and providing ancillary services for effective operation of the electric power system, are the subject of the full regulation of the competent authority. Generation of electricity and supply of end users with electricity have been gradually liberalized by introducing the market mechanisms.
More details in Directive 2009/72/EC
- Two entity laws on electricity and Law on transmission, ISO and SERC in BiH offer the base for regulation of the electric power sector by three regulatory commissions.
Competences of the State Regulatory Commission for electricity (SERC) are related to the Transmission Company, Independent System Operator and international trade with electricity; competences of two entity regulatory commissions (The Regulatory Commission for electricity in Federation BiH – FERC and the Regulatory Commission for energy in the Republic of Srpska – RERS) are related to generation, distribution and supply with electricity.
- Bosnia and Herzegovina ratified the Treaty on establishment of the Energy Community of the South East Europe and accordingly application of the European Union Directives on energy market, protection of the environment, competition and renewable energy sources according to the timetable determined by the Treaty.
- Parties to the Treaty on the Energy Community of South Eastern Europe commit themselves to establish the joint electricity market which shall function pursuant to the standards and rules of the energy markets of the European Union (EU) that it shall be integrated with.
Opening of the electricity market in the Republic of Srpska and BiH
The State Regulatory Commission for electricity (SERC) made Decision on the volume, terms and conditions and timetable of the market opening in BiH pursuant to the Law on transmission, regulator and system operator of electricity in BiH.
Starting from this Decision, and taking into account provisions of the Treaty on establishment of the Energy Community of the South Eastern Europe and its competences determined by the law, the Regulatory Commission in its 37th regular session held on 6th September 2005 made Rule book on getting a status of eligible customer (Official Gazette of the Republic of Srpska, number 88/06) which prescribed the dynamics of the market opening and transitional period of the market opening which lasts till 1st January 2012. This Rule has also prescribed that the Regulatory Commission shall timely, before the transitional period expires, prescribe the right of the end user to the universal service of supply with electricity as well as the requirements at which the end users may exercise such a right after 1st January 2012.
In its 36th regular session held on 22nd December 2011, the Regulatory Commission made Decision on adoption of the Rule book on eligible customer (Official Gazette of the Republic of Srpska, number 131/11). This Rule prescribed the timetable of the market opening, method of supplying eligible customers with electricity at the electricity market in the Republic of Srpska, the role of public supplier, rights and obligations of the eligible customer of electricity, rights and obligations of the supplier of eligible customers and public supplier, the switching procedure and method of determination of the prices for eligible customers who are supplied in the public service obligation system, including the universal service as well, till 1st January 2015. The aim of making this Rule is realization of the long-term objectives of the power policy of the Republic of Srpska which provide for incentives for competition at the power market through the electricity market opening in the Republic of Srpska and Bosnia and Herzegovina.
The Regulatory Commission for energy of the Republic of Srpska (The Regulatory Commission), on 11th December 2014, made Rule book on supply of eligible customers with electricity and switching procedure (the Rule). This Rule prescribes the method of supply of customers at the electricity market in the Republic of Srpska after 1st January 2015, rights and obligations of the eligible customers and supplier, switching procedure, the role of public supplier and supplier of last resort, method of creation of prices for customers who are supplied in the public service obligation system (at the public supplier or supplier of last resort).
Dynamics of the market opening and participants in the electricity market
Participants in the electricity market are: eligible customers, generators, traders and suppliers.
Eligible customers, namely the customers of electricity who are entitled to freely choose the supplier from whom they will buy electricity are:
- As of 1st January 2007, all customers in the Republic of Srpska whose annual consumption of electricity is more than 10 GWh;
- As of 1st January 2008, all customers in the Republic of Srpska, except the households and
- As of 1st January 2015, all customers in the Republic of Srpska including the households;
The essence of the “electricity market opening” is that as of 1st January 2015, all customers are entitled to buy electricity at the open market and conclude the contract on supply with the supplier of their own choice.
Information on the electricity market opening, public supplier and supplier of last resort and switching procedure
Supply of eligible customers after full market opening
As of 1st January 2015, all customers are eligible customers which means that they are entitled to buy electricity at the open market and conclude the contract on supply with supplier of eligible customers of their own choice. As of 1st January 2015, the customer from the category of households and small customer who do not choose the supplier of eligible customers is entitled to buy electricity from the public supplier namely, to be supplier with electricity of the standard quality at the cost-effectively justified, easily and clearly comparable and transparent prices (universal service).
Small customer is a small industrial and commercial customer of electricity whose structures are connected to the distribution system of electricity the voltage of which is less than 1 kV that meet the following criteria:
- at least two of three mentioned: that they have less than 50 employees, that their total annual revenue does not exceed 2 million BAM that the value of the business property does not exceed 1 million BAM or
- that their annual consumption achieved in the past year does not exceed 35,000 kWh;
Apart from the possibility to choose the supplier of eligible customers after 1 January 2015, the eligible customers have a possibility to go on with supplying at the suppliers they used to be supplied by, within the public supplying and supplying of last resort.
Electricity supply at the market
The eligible customer may conclude the contract on supply with one or more licensees for trade and supply with electricity on the territory of Bosnia and Herzegovina. The right to choose the supplier provides the eligible customer with a possibility to negotiate and conclude the contract with the licensee for trade and supply on the capacity, amount, and time of delivery and price of electricity.
The eligible customer that obtains electricity at the market from the supplier of eligible customers at his own choice with the chosen supplier, contracts the electricity price.
The total price of electricity which the eligible customer pays when obtaining the electricity at the market is consisted of:
- price of electricity which includes all costs and profit of supplier (price of electricity procurement and price of the supplying) and system/ancillary services and/or balancing, when these services are obtained at the open market;
- regulated prices of using transmission and/distribution network, which includes the price of system/ancillary services when the prices of these services are regulated;
- the fee for renewable energy sources and efficient co-generation and other fees and grants determined by special regulations and
- the tax on added value;
The eligible customer connected to the transmission network, i.e. the customer from the category of consumption at the voltage level of 110 kV pays:
- The price of generation and supply of the electricity taken at the price that he contracts with the supplier of eligible customers:
- Tariff for the transmission service:
- a part related to the energy: 0,00578 BAM/kWh;
- a part related to the capacity: 1,519 BAM/kWh;
- Tariff for ISO services: 0,000592 BAM/kWh;
- Tariff for ancillary services of the transmission losses: 0,0912 BAM/kWh;
- Tariff for ancillary service of the secondary and tertian regulation of 0,002176 BAM/kWh, and excessively taken reactive electricity of 0, 01 BAM/kVarh.
In more details: SERC decision
- Costs of settlement of deviations to the Balance Responsible Party (BRP), whereby in the first phase of the market opening, and pursuant to the Market Rules approved by SERC, BRP in the Republic of Srpska is “Elektroprivreda Republike Srpske” (Power Utility of the Republic of Srpska), joint-stock company Trebinje.
Eligible customer connected to the distribution network pays:
- The price of generation and supply of the electricity taken at the price that he contracts with the supplier of eligible customers;
- The tariff for use of services of transmission, ISO services, ancillary services and for use of the distribution service pursuant to the tariff rates for distribution system users determined by RERS, and according to the appropriate decisions of SERC.
|
DESCRIPTION |
Tariff rates for distribution system users |
|||||||
|
Capacity charge |
Active electricity |
Excessively taken reactive electricity |
||||||
|
Categories of consumption |
Unit measures |
BAM/kW/month |
BAМ/kWh |
BAМ/kVArh |
||||
|
Season |
HS |
LS |
HS (winter) |
LS (summer) |
HS (winter) |
LS (summer) |
||
|
Category |
Group |
Part of the day |
||||||
|
35 kV |
|
HТ |
3,9473 |
0,0130 |
0,0240 |
|||
|
SТ |
- |
0,0065 |
- |
|||||
|
10 kV |
|
HТ |
6,8065 |
0,0157 |
0,0302 |
|||
|
SТ |
- |
0,0078 |
- |
|||||
|
0,4 kV – other consumption |
with capacity metering |
HТ |
13,5238 |
0,0222 |
0,0422 |
|||
|
SТ |
- |
0,0111 |
- |
|||||
|
one-tariff |
MТ |
4,5993 |
3,5378 |
0,0518 |
0,0398 |
- |
- |
|
|
two-tariff |
HТ |
4,5993 |
3,5378 |
0,0636 |
0,0489 |
0,0500 |
0,0385 |
|
|
SТ |
- |
- |
0,0318 |
0,0245 |
- |
- |
||
|
0,4 kV – public lightning |
|
MТ |
- |
0,0954 |
- |
|||
|
0,4 kV – households |
one-tariff |
MТ |
2,4730 |
1,9022 |
0,0540 |
0,0415 |
- |
- |
|
two-tariff |
HТ |
2,4730 |
1,9022 |
0,0648 |
0,0498 |
- |
- |
|
|
SТ |
- |
- |
0,0324 |
0,0249 |
- |
- |
||
- Costs of settlement of deviations to the Balance Responsible Party (BRP), whereby in the first phase of the market opening, and pursuant to the Market Rules approved by SERC, BRP in the Republic of Srpska is “Elektroprivreda Republike Srpske” (Power Utility of the Republic of Srpska), joint-stock company Trebinje.
These tariff rates are determined for the distribution system users separately for all categories of consumption and tariff groups, pursuant to the Decision on tariff system for sale of electricity in the Republic of Srpska and are integral part of the price of the electricity supply of end users whose structures are connected to the distribution network.
The list of licensees for trade and supply with electricity on the territory of Bosnia and Herzegovina issued by the Regulatory Commission and licensees for trade of Tier II issued by the Regulatory Commission, for electricity in the Federation BiH (FERC) are published at the website of the regulatory commissions, while the licensee for distribution of electricity is obliged to publish this list in its call center as well.
Supply of households and small customers at the public supplier
The public supplier designates the supplier that supplies eligible customers with electricity from the category of households and small customers that have not chosen the supplier of eligible customers.
The public supplier on the territory of the Republic of Srpska, until the law or some other regulation is made that will regulate determination of the public supplier and supplier of last resort, is the supplier that was supplying non-eligible (tariff) customers till 1 January 2015.
The price of energy for eligible customers that is entitled to be supplied within the system of the public service obligation at the public supplier includes:
- the price of “procurement” of electricity;
- the price of supplying and
- the price for system/ancillary service and/or balancing, in case that these services are obtained at the market, namely that they are not included in the regulated price of the network use;
The price of “procurement” of electricity for eligible customers that choose to be supplied with electricity at the public supplier is the calculative item, and its maximum amount is determined pursuant to Article 13 of the Rule book on supply of eligible customers with electricity and switching procedure complying with the principle of gradual change of the price from the regulated towards the market one, everything for the purposes of avoiding sudden price shock.
The price of supply at the public supplier should cover the costs of services of public supplier regarding the data processing on the metering points and customers, contract’s administering, invoicing, submission of bills, collection and operation of the call center and is determined in the same way as it is for non-eligible (tariff) customers.
Total price (tariff rates) for supply of eligible customers at the public supplier, apart from the energy price contains also the regulated price of the network use (the price of the transmission network use or the price of the distribution system use).
The price of energy for eligible customers who are entitled to be supplied within the public service obligation system at the public supplier is the same along the whole territory of the Republic of Srpska for all eligible customers who belong to the same category of consumption or tariff group.
The price for supply of these customers is still determined by the Regulatory Commission in the same way and in the same procedure as it used to be done till 1 January 2015.
The public supplier is obliged to publish at its website and notice board the prices of the eligible customers supply within the public service obligation system, including the universal service.
Supply at the supplier of last resort
Eligible customer, other than small customer and customer from the category of households, who is supplied at the open market is entitled to the supplier of last resort for electricity in the period of two months, with a possibility of extension in the maximum duration of 12 months, free of obligation to apply provisions of the Article 17 of this Rule in case:
- of bankruptcy or liquidation of supplier that used to supply him till that time,
- of cessation or revocation of the license to the supplier that used to supply him till that time,
- that he did not find new supplier that will be supplying him after cessation of the contract on supply with the existing supplier, unless the contract cessation is the consequence of the contract termination due to failure to carry out payment obligations of the electricity delivered;
The supplier of last resort on the territory of the Republic of Srpska, until law or other regulation is made that will regulate determination of public supplier and supplier of last resort is the supplier that was supplying non-eligible (tariff) customers till 1 January 2015.
The energy price which is used as the base for determination of the price for supplying of last resort equals to the price of energy for public supplying in the period of 12 months after the Rule book on supply of eligible customers with electricity becomes effective, and upon expiry of that period to the average weighted price of all suppliers in the Republic of Srpska achieved in the past half of the year (the price of procurement for public supplying, price of procurement for the supplying of last resort and market price), and which is published by the Regulatory Commission.
The electricity price for eligible customers that are entitled to the supplying of last resort is the same for all eligible customers of the same category of consumption and tariff groups in the Republic of Srpska and within two months of using this service it is at maximum 10% more than the price which serves as the base for determination of the price for supplying of last resort.
The price of electricity for eligible customers, that are entitled to be supplied by the supplier of last resort is the same for all eligible customers of the same category of consumption and tariff groups in the Republic of Srpska and upon expiry of the first two months it is at maximum 20% more than the price which serves as the base for determination of the price for supplying of last resort.
The prices of supplying of last resort differ depending on the categories of consumption, tariff groups, seasons and parts of the day in the same ratio as the prices of energy for public supplying. The supplier of last resort is obliged to determine the prices of supplying of last resort, submit them to the Regulatory Commission and publish them no later than 15 days before they are applied, at its website and notice board.
Switching
The switching is meant by transfer of the eligible customer from the supplying from the existing supplier to the supplying at the new supplier.
The Rule book on supply of eligible customers with electricity and switching procedure prescribes the switching procedure in a sense of acting of the eligible customer, existing supplier, new supplier and system operator, conditions at which the switching procedure may be denied, transfer from the market to the supplying of last resort, and transfer from the market to the public supplying. The switching procedure cannot be longer than three weeks (21 days) counting from the date when the complete application is received by the new supplier. The switching procedure is free of charge. The eligible customer is entitled to switching procedure concurrently for two or more accounting metering points of the eligible customer.
Switching procedure is conducted by the system operator, and a new supplier is obliged to provide harmonization of the contract of supply, contract on connection, contract on access and belonging to the balance group, including their amendments before the contract is applied. Switching procedure diagram
