Bečarević to FERK in an open letter: Suspend the electricity price increase procedure as it is illegal

(Patria) - Almir Bečarević, an energy expert, sent an open letter to the members of FERK who will hold a session today to decide on Elektroprivreda BiH's request for a linear 10 percent increase in electricity prices.

Bečarević reminds FERK members of the Law on Electric Energy from 2023 and Article 169, which stipulates:

“(2) The Government of the Federation shall pass a decision on the appointment of a public supplier referred to in Article 106, paragraph (4) of this Law within nine months from the date of entry into force of this Law.
(3) The appointed public supplier referred to in paragraph (2) of this Article is obliged to submit an application to the Regulatory Commission for a license to operate for the supply and trade of electricity within three months from the date of appointment”.

As we can see, Article 169 stipulates that the Government of the FBiH makes a decision on appointing a public supplier within nine months from the date the Law enters into force. Ten months have passed since the new Law entered into force, but in the permit of JP EPBiH, which grants it the status of a public supplier, we have a reference to the decision of the Government of the FBiH from 2014, which means that the Law is not being respected in its basic provision for the appointment of a public supplier. Paragraph (3) of Article 169 contains a further obligation that the appointed supplier is obliged to submit an application to the Regulatory Commission for a license to operate for the supply and trade of electricity within three months from the date of appointment.

To date, FERK has not registered the receipt of an application for a new license, and in the explanation of the REQUEST FOR A PRICE PROPOSAL FOR THE PUBLIC SERVICE OF SUPPLY BY JP EPBIH, reference is made to the decision of the Government of the FBiH from 2014.

At the same time, the same request from JP EPBiH is based on the Rulebook on determining prices for the supply of electricity to end customers by public and reserve suppliers, which was adopted by FERK under the new Law, but without issuing a new license in compliance with the deadlines from the new Law from 2023.

This practically means that we are using old, invalid decisions, not respecting the provisions of the new reform Law on Electric Energy, not respecting the mandatory deadlines from the Law, but basing the request for a new price on the rulebook from the new Law, because they are in a hurry.

Now, let's talk about the hurry and the explanation of JPEPBiH regarding the new tariff rates and the statement that the increase is 10%.

We will take the example of households from Group I, where the price under the old tariff rates was 13.46 pf/kWh. According to the new tariff proposal, the price is 15.00 pf/kWh.

Now, an interesting question, how is 13.46 to 15.00 a 10% increase?

The total increase in the unit price of electricity according to the new proposal is 12%, and since we have a higher base for VAT, this price increase will be over 12%. This is an increase for both groups of households.

When we look at the summary of JP EPBiH's requests, we can conclude that it was submitted with an old license for public supply services, which is based on two laws that have ceased to be valid, and with a percentage increase that is not true.

A NEW LICENSE WITHIN THE LEGAL DEADLINE WAS NOT ISSUED, OR RATHER, THE GOVERNMENT OF THE FBiH HAS NOT APPOINTED PUBLIC SUPPLIERS WITHIN 9 MONTHS, AND WE KNOW THAT THERE IS MORE THAN ONE.

I hereby ask you not to refer to the article of the Law that regulates the duration of licenses, because the given LEGAL deadline has expired and the old license cannot be in force, as there are legal prerequisites that JP EPBiH must fulfill to obtain a new license and to initiate the tariff procedure. That is why the Law provided for 9 + 3 months, and a lapse occurred and someone should be held responsible for it, not to conduct a tariff procedure based on an old license and invalid laws, with a percentage that is not truthfully given in the material.

Now JP EPBiH can say that it is not obliged to assign the role of public supplier by its own decision, but it is obliged to warn the Government of the FBiH and the regulator that the new procedure for determining the public supplier has not even begun and that the legal deadline has expired, and that the amount of the increase in the unit supply price is not calculated according to the increase in the revenue of JP EPBiH but according to the actual cost increase for the customer, which is over 12%.

In addition, the Government has adopted a decision on the endangered electricity supply for 2024 to prevent an increase in electricity prices for all customers switching to market supply. JP EPBiH will start delivering new contracts with increased prices in the coming months, and no later than September. FERK is observing this, but not reacting, Bečarević stated.