Montenegro: A2A and Terna are packing electricity price increase, EPCG and CGES managed by Italian controlling partners

16. May 2013. / SEE Energy News

Companies are preparing requests that will be soon delivered to Montenegro Energy Agency which has predicted gradual energy price increase in the three years’ period.

Power utility company “EPCG” and TSO company “(CGES)” are preparing requests for correction of regulatory allowed income and prices that are valid until 1 August.

EPCG and CGES confirmed that they didn’t deliver requests to Regulatory Agency for Energy (RAE), but that they intend to do that soon. They couldn’t say in the company yesterday what they will demand from RAE, if they are asking for price increase and how much it will be. New prices will be introduced since 1 August.

RAE Board increased electricity prices in January last year and in August last year for 5,8% for households. Kilowatt-hour of energy costs 8,13 cents i.e. 9,5 cents with VAT. Electricity price increase was determined for citizens and industry in the frame of three years regular period but expenses and incomes of the company are being checked every year in order to determine if it is needed correction toward increase or decrease. Regulator decided to increase prices gradually for three years adjusting them to the trade (which doesn’t function and EPCG has monopoly) and to European laws.

Member of the agency predicted increase of middle price of electricity to be 5,9% in the second regulatory year which begins 1 August and ends on 31 July 2014 and 5,4% in the third year (since 1 August 2014 until the same month 2015).

According to methodologies for determination of regulatory income from public supplier (EPCG) and tariffs they have the right to do so. It is written in methodologies that if periods of approved tariffs’ use couldn’t predict change of expenses, regulatory period, prices and tariffs can be changed on energy subject’s demand, according to the rules for it.

They claim that they are not late

According to the Energy Law, companies are obligated to deliver 4 months until expire date of prices that are used, and Agency Board to reconsider them 90 days the most. It is written in methodologies that they should deliver them until 30 March, but that refers to 2012 and the first regulatory period. It is not clear if they should deliver requests until this deadline.

“We are not late because of request, which is almost ready and is not much changed with reference to what we estimated as required previous year, can also be delivered after holydays”, it was officially answered from CGES whose mayority owner is Italian Company Terna. It was not approved what was asked but it is a slight increase for transmission services.

Similar representation is also in EPCG in mayor state ownership which is lead by Italian Energy Company A2A. They confirmed that they are preparing documentation for RAE claiming that “their expenses and incomes were controlled” during the year also.

Director of RAE, Novak Medenica, stated that Agency works from today and he is available for answers. Answer to the question if energy companies are late in delivering incomes and prices correction requests is expected and price increase is predicted also. It is a question if there is a base for companies’ representatives to ask higher prices and if RAE is under control of approved expenses which are transferred into prices and tariffs, he concluded that there is a space for their fall.

Next to announced increase of VAT rate, electricity price increase for households and industry would be one more attack to standard of citizens who lose work places and their earnings in Montenegro are stagnating or decreased.

Source; Serbia Energy See desk/Vijesti/EPCG/CGES

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