Draft Law on Gas in the FBiH enters parliamentary procedure, one of the reasons being security of supply

(Patria) - A law on gas is in procedure in the Federation of Bosnia and Herzegovina and is currently in the draft phase, submitted to Parliament by the Federal Government as the proposer.

It has been announced as one of the topics of the session of the House of Representatives for April 28.

The Government, as the proposer, cites several reasons why the Federation should adopt such a law, one of which is "the introduction of a mechanism to strengthen the security of supply, including price control in cases of extreme market disruptions."

Security of supply is one of the basic strategic goals in the gas sector, and in this regard, the Government's text defines a mechanism for the relevant ministry and the Energy Regulatory Commission to continuously monitor the work of entities in this area and take measures to strengthen the regularity of supply. An additional mechanism is also prescribed - the possibility for the Federation Government to declare a state of endangered security of supply due to disruptions in delivery and insufficient supply of natural gas, extreme price increases on the market, or other threatening circumstances.

The text also authorizes the Government to adopt a plan, i.e., to prescribe the method of action in conditions of endangered supply, a description and categorization of emergency situations, obligations and responsibilities of entities, procedures and methods of crisis management, a list of measures for better supply, measures and activities to reduce negative impacts due to supply interruptions on district heating systems and electricity generation facilities, the method of reporting and informing, and other issues relevant to the implementation of the plan.

In the event of an extreme increase in market prices, the Federation Government, using this mechanism, may also introduce special measures for price formation and control, thus mitigating the consequences of significant market disruptions for end customers.

Bearing in mind the possible negative effects of introducing such measures on the market and energy entities, the Government has also proposed appropriate mechanisms for controlling and mitigating such effects.

If the proposed law were approved by the Federal Parliament, the Government would also have a legal obligation, in a state of endangered security of supply, to introduce measures that cause the least possible disruption to the natural gas market, and their duration could not be longer than the circumstances for which they were prescribed.

The law prescribes an obligation for the Government, when introducing measures, to also determine the method, i.e., the sources of money for compensating potential damage to energy entities implementing them, and to define the conditions and method of distributing the money. Finally, the law also contains an obligation to publish in the media the decision on declaring a state of endangered supply and the decision on introducing special measures, which ensures transparency in proceedings and informs all relevant entities.

According to the proposed solutions, the Federation Government has a sufficient legal basis to act adequately in cases of endangered security of natural gas supply, both due to insufficient supply and significant market disruptions, it is stated in the explanation.

Since the proposed law has been submitted to the parliamentary procedure currently in the draft phase, this means that Parliament could refer it to a public debate before the final decision.

No law, including this federal one, can enter into force until it is approved at sessions of both houses of the Federal Parliament in an identical text, down to the last comma.

The Government adopted the Draft at its session on March 13 this year.