Serbia: Electricity market, Many retailers – small benefits for the consumers

7. May 2014. / News Serbia Energy

From 1stJuly citizens will be able to choose from whom they will buy electricity, but this option will change nothing, because state owned power utility company EPS has the cheapest price. From 1st July the citizens of Serbia will be able to buy electricity from many retailers similarly as do it now when choosing or changing service provider. It will be enough to come with an ID card in one of the branches of electricity retailers, to sign a contract and become their customers.

Although it looks like a painted pattern of mobile telephony on one side, is not exactly the case. Citizens, who choose the mobile operator, know why they do, because the sellers compete to offer them as cheap impulses and tariff packages with the phone for a penny.

What new can electricity retailers offer to the citizens of Serbia? Practically nothing. Especially not the lower price than the current EPS’s, which will further disappoint households considering how pour their household budget is.

When all this is known, the question is what is the purpose for citizens market opening and even the deadline moving for selecting a new electricity supplier from 1st January 2015th on 1st July this year.

The reason why people do not have anything to expect is more than clear. Until now Serbia Power Utility Company as a monopolist has sold the electricity at unrealistic, often social prices for which it is still the cheapest in Europe.
Asked whether markets opening would bring something new to households in Serbia, in EPS say that practically nothing will change for the citizens, because at this point could not be expected that a supplier offers lower price than the cost of the public supplier, namely EPS. Because it is not economically worth to other electricity sellers, given the current market price.

the other hand, explains in EPS, since the market will be opened at a time when the conditions are met, or when the electricity price in EPS reaches the market price, we can expect the inclusion of other suppliers who will try to offer cheaper electricity. Through various benefits and tariff packages, similarly to the current situation in the market for telecommunications services.

Citizens will, however, get a possibility of supplier choice, but they still have the right to a public water supply, or the possibility on EPS supply.

Bearing in mind, according to EPS, the electricity price for public supply is regulated by laws and bylaws and it is not exposed to the market laws, in the past price of kilowatt-hour was lower compared to the price on the open markets in the surroundings.

This trend should be expected in the future, but the price will definitely have an upward trend in line with the increase in the population standard in Serbia, and in the future we can also expect the market price in the public supply.

Dr. Slobodan Ruzic, a former advisor to the Minister of Energy, says that is a good thing to open electricity market, but it is not good when someone is forced to change supplier because the government will not raise the electricity price.

– This is done for high and medium voltage consumers, so now these consumers pay electricity much more than the market has not been opened. When it comes to the electricity price for households hardly anyone from electricity retailers will be able to offer a lower price than EPS, so there will be households that will not change supplier from 1stJuly. This is more and more likely if it is known that the EPS’s price is lower by 10 to 15 percent, says Ruzic.

The electricity market opening for households will be useful for consumers in Serbia if the electricity price in neighboring countries continues to fall and to get closer to the EPS’s , which in this case would be a competitor in the market . In these circumstances, however, it is not realistic, says our source.

It is difficult, says Ruzic, to tell what the real electricity price in Serbia is at this moment, because that market price should be determined by supply and demand and the real price is the one which can cover the costs of production, transmission and distribution.
Asked if the only reason for the rush in opening the electricity market actually was complying to the European Union, Ruzic responses positively and concludes that EPS will have a monopoly also after 1st July, which had so far, and that all households will continue to be overpaid on EPS supply.

Source; Serbia Energy

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