Croatia: Power market games and electricity, competition decreases electricity prices in fight for clients

, SEE Energy News

Croatia Power Utility Company submitted on July 8th request for decreasing electricity price for households for 10, 7 percent to Croatia Regulatory Agency (HERА).  Request for price correction is based on the formula of cost account for electricity production in first half of this year and assessment of production cost in 2013, according to principles defined with Tariff system for electricity production.

From HEP reminded that total electricity price consists of productive component, fee for transmitted and distributive network, measures services, supply fee and fee for supporting production for renewable resources. HEP earlier announced that it would react on offers that in the middle of June presented Slovenian GEN and German RWE Energy that provided lower electricity prices by comparison with HEP. For example, Slovenian company GEN offered to households and small buyers in Croatia electricity price for 12, 5 percent lower than HEP price, with guaranty that it would not be increased by 2015. Transmission to GEN is free, and buyers that signed contract by the end of July, will not pay bill for the first month, as greeting sign.

Two- tariff consummation for households in higher tariff  would cost 0, 066 EUR/kWh in HEP, in GEN 0,065 EUR/ kWh, while in RWE Energy amounts between 0,066 and 0,07 EUR/kWh. In lower tariff HEP offers 0,033 EUR/kWh, also GEN, and RWE Energy offers from 0,033 to 0,036 EUR/kWh (without VAT).

However, as HERA stated, GENI was not the only one reason because of price decrease and HEP action should not surprise anyone. HEP works according principles and if it did not ask review and correction of wholesale price on its own, then HERA would ask it, whose work is to control all parameters (costs) that take part in electricity price, With other words, HEP has to react because in the European electricity market came to price decrease of about 20 percent, because of natural gas price decrease and production decrease. HEP, also, part of electricity produces in gas power plants, and in Croatia, otherwise each third consumed kilowatt hour is imported.

Source; Serbia Energy See desk/HERA