Two Power Utilities in the Federation of Bosnia and Herzegovina: Same Owner, Same Regulator, but Two Methods of Price Calculation

(Patria) - With the approved tariff rates, block tariffs are being introduced for the first time in the Federation of Bosnia and Herzegovina, meaning that consumers who use more electricity will pay higher bills. This essentially means that in the FBiH there are now two diametrically opposed methods of calculating electricity prices, one for EPHZHB and another for JP EPBiH (so much for a unified and non-discriminatory market in the Federation, let alone BiH as a whole), states an analysis published by Istraga.

How this looks in practice will be seen through the example of a monthly consumption of 500 kWh.

The differences in electricity price formation between these two power utility companies, which have the same owner and the same regulator, are:

- EPHZHB has two seasons for price formation: a higher (winter) season and a lower (summer) season;
- JP EPBiH has a block tariff: green, blue, and red.

The price of electricity at EPHZHB for a single-tariff meter in the higher season is 15.79 pfennigs/kWh.
The price of electricity at EPHZHB for a single-tariff meter in the lower season is 12.15 pfennigs/kWh.

The price of electricity at JP EPBiH for a single-tariff meter under the block tariff system is: green tariff 15.90 pfennigs/kWh, blue tariff 16.20 pfennigs/kWh, and red tariff 16.50 pfennigs/kWh.

When comparing the higher season at EPHZHB with the green, blue, and red tariffs at JP EPBiH, we get a small difference, ranging up to 4.5% for the red tariff.

However, when comparing the lower season at EPHZHB with the green, blue, and red tariffs at JP EPBiH, we get a significant difference, reaching up to approximately 36% for the red tariff.

An average consumer living in a house/apartment and using electricity for basic living needs (without heating or cooling) may consume approximately 500 kWh, meaning they would pay 78.95 KM at EPHZHB in the higher season and 60.75 KM in the lower season.

At JP EPBiH, under the blue tariff, they would pay 79.78 KM, which is nearly identical to the higher tariff of 78.95 KM. However, the difference becomes significant when comparing the lower season at EPHZHB, for which you would pay 60.75 KM, while at JP EPBiH for the same consumption (500 kWh) it would amount to 78.95 KM. The difference is approximately 30% in the lower season (summer season), and here EP HZHB is considerably more favorable than JP EPBiH.

For dual-tariff meters at EPHZHB, the rates are:
HIGHER SEASON
– higher tariff 19.74 pfennigs/kWh
– lower tariff 9.87 pfennigs/kWh
LOWER SEASON
– higher tariff 15.18 pfennigs/kWh
– lower tariff 7.59 pfennigs/kWh
For dual-tariff meters at JP EPBiH, the block tariff is:
HIGHER TARIFF
– green 19.88 pfennigs/kWh
– blue 20.25 pfennigs/kWh
– red 20.63 pfennigs/kWh
LOWER TARIFF
green 9.94 pfennigs/kWh
blue 10.12 pfennigs/kWh
red 10.31 pfennigs/kWh

When comparing the higher season (winter) with the block tariffs, we see that prices are nearly identical, and when comparing the lower season with the block tariffs, the price at EPHZHB is over 30% cheaper than at JP EPBiH.
For an average consumption of 500 kWh, the electricity price at EPHZHB for the higher season and the higher tariff is 98.70 KM, and for the lower tariff it is 49.35 KM.

At JP EPBiH, for the same consumption of 500 kWh, the price for the higher tariff is 99.75 KM, and for the lower tariff it is 49.81 KM. Here we see that the differences are almost negligible.

For an average consumption of 500 kWh, the electricity price at EPHZHB for the lower season and the higher tariff is 75.90 KM, and for the lower tariff it is 37.95 KM.

At JP EPBiH, for the same consumption of 500 kWh, the price for the higher tariff is 99.75 KM, and for the lower tariff it is 49.81 KM. Here we see that the difference in the final price is greater than 30%.

CONCLUSION

Two power utility (public) entities, the same owner, the same regulator, two methods of price calculation (excluding other calculative elements).

Above in the text, the drastic price difference of over 30% is presented and mathematically shown, arising from the comparison of a single-tariff meter with the lower tariff in the lower season at EPHZHB with the block tariff at JP EPBiH.
The same case applies to the dual-tariff meter at EPHZHB for the lower season (lower – higher tariff) compared to the block tariffs at JP EPBiH.