Tariff and Market Department

General information

The task of the Regulatory Commission for Energy of Republic of Srpska is to provide conditions for the market opening for free competition in the activities which aren’t by their nature inherently monopolistic, and to provide in those monopolistic activities equal access of all parties, quality of the service and a fair price accompanied by the profitable running a business of the participants and preventing monopolistic behavior.

The Law on electricity – cleaned text (“Official Gazette of Republic of Srpska”, number 8/08) provides that Regulatory Commission for Energy of Republic of Srpska prepares, develops and makes:

• Methodology and criteria for determination of the price for using distribution network and electricity price for supply of non-eligible customers and methodology for determination of the fee for connection to the distribution network,
• Tariff system for sale of electricity and use of the distribution network,
• Tariff rates for distribution system users and tariff rates for non-eligible customers,
• Structure and total amount of the fee for connection to the distribution network,
• Incentives for generation of electricity from renewable energy sources, including the waste, as well as co-generation of heat and electricity and
• Structure of the price and total price of electricity at the plant outlet and specifically the price for distribution of electricity.

The Gas Law (“Official Gazette of Republic of Srpska” number 86/07) prescribes that the Regulatory Commission for Energy of Republic of Srpska:

• determines methodology for calculation of costs of generation, transport, distribution, warehousing and supply with natural gas,
• determines methodology for calculation of costs of connection to the network,
• makes tariff system for calculation of prices for use of the system for generation, transport, distribution, warehousing of natural gas and tariff system for calculation of the natural gas price for supply of tariff customers,
• gives the consent to the energy structures on the prices for supply of customers with natural gas and the price of access and use of the transport and distribution system.

Legal framework

Legal framework for determination of tariffs is established by:

1. Law on electricity of Republic of Srpska,
2. Law on gas,
3. Law on oil and oil derivates,
4. EU Directives 2003/54/EC and 2003/55/EC,
5. Athens Memorandum dated 2002 and 2003 and
6. Energy Community Treaty of the Southeast Europe dated 2005

The aims of determination of tariff methodologies and tariffs in the energy sectors are as follows:

• Fair and cost-effective procedure of regulating prices and determination of the fair fee to the regulated companies,
• Improvement of efficiency, reliability and cost-effectiveness of operation of the energy system,
• Provision of safety of supply and quality of services for end users,
• Creation of conditions for development of the energy systems,
• Introduction of the market mechanisms and improvement of the competitiveness based on the internationally accepted principles of fair access and non-discrimination of users of the energy networks according to the clear conditions known in advance.

Tariff Development Procedures

The proceedings related to the tariffs’ development in the energy sector are initiated filing application by the regulated company to Regulator or on the initiative of Regulator. After that, Regulator issues the public notice on initiating the tariff proceedings and explanation how the stakeholders may get necessary information and take part in the proceeding. After the procedure, prescribed by Regulator in its Rule on tariff methodology and tariff proceeding (Official Gazette of Republic of Srpska, number 61/05), Rule on methodology for determination of the fee for connection to the distribution network (Official Gazette of Republic of Srpska, number 123/08), Rule on tariff methodology in the system of transport, distribution, warehousing and supply with natural gas (Official Gazette of Republic of Srpska, number 9/09), (hereinafter Tariff methodology), Procedural Rules of the Regulator (Official Gazette of Republic of Srpska, number 96/04) and Rule on public hearing and settlement of disputes and complaints (Official Gazette of Republic of Srpska, number 71/05) Regulator makes decision. Each decision should contain enough evidences and facts which shall enable the public understand reasons for such a decision.

Tariff methodologies define the process for determination of tariffs in Republic of Srpska, i.e. basic of the tariff system: tariff elements, categories of consumption and groups of customers, method of determination of prices and tariff rates as well as the method of determination of the connection fee. They define the following:

• classification of costs,
• allocation of costs on tariff elements, categories of consumption and groups of customers,
• determination of prices and tariff rates as well as the fee for connection to the network pursuant to the prescribed tariff methodology.

In the rules for tariff proceeding, Regulator prescribes the bases of the proceeding for the purposes of analyzing application and other pleadings related to the tariffs which are necessary for Regulator to meet its liabilities pursuant to the Law on electricity, Law on gas and Procedural rules of Regulator.

Along with the Tariff methodology, Regulator prescribes the content and forms of the application for the tariffs’ approval as well as the forms for submission of data and other documents supporting the application for the tariffs’ approval.