Serbia: Power utility company in crisis, not even the increase in price would help EPS says CEO

14. July 2014. / News Serbia Energy

Possible increase in electricity price is not of much help this year to the national power system in compensating for the damage made by the floods.This is an estimate given by the Acting Director of EPS, Mr. Aleksandar Obradović .
Mr. Obradović said the very effect of price increase would solve one third to half of the EPS’s problems. So that brings us again, he added, to some other measures to be taken.
“The important issues to be solved – are the losses in distribution amounting to 16 percent and increasing the collection that is now at the level of 90%. On the other hand, the rise in prices could have the consequence of people using electricity less for heating purposes in the years to come, said Mr. Obradović and added it was simply useless.
Quoting that EPS imports electricity and that that electricity has been paid 20 million EUR so far, he added that coal mines were flooded still to a great extent, and excavated quantities were being saved for winter reserves, when the electricity on the market would get more expensive.

Mr. Obradović has also mentioned that instead 90,000 tons of coal, our daily production is on average 45,000 tons.
He added he expected the announced change to happen in the organization of EPS, which will facilitate better collection operations, since it has not been possible, until now, to order power shutting off from a central point for someone who has not paid the electricity bill, given that local managers of distributions had absolute power of decision- making, which will no longer be the case.
Damage made by the floods to the power system of Serbia has not been exactly determined yet, because it will be possible only when open pit mines have been completely dried out and sludge removed, said Mr. Obradović.

Reminding that the entire power system was at risk, Mr. Obradović said that they caused direct damage to the mining sector and indirect to the operations of EPS. As he estimated, damage in business would be felt in the following 12 to 18 month time.
EPS will have to provide funds for recovery of the equipment in the mines and getting them back to the original state, he said, noting that 70% of the electricity in Serbia is produced from coal, with Kolubara producing 50% of that coal.

According to him, it is possible just now to access on excavator that was deep in sludge.

He noted that floods caused bad financial situation in EPS, that until the end of year the third phase of electricity market liberalization should be completed, and he also pointed out that this company was not left in the lurch, that both the state and competent ministry put their best efforts to help, and that donor conference was expected to take place in Brussels.

“EPS successfully avoided the bankruptcy a year ago, but it will have to cut costs significantly”, concluded Mr. Obradović.

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