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Market Opening

ELECTRICITY MARKET OPENING IN THE REGION OF BOSNIA AND HERZEGOVINA

 

  • Having signed the Electricity Policy Statement in 2000, adopting the entity Law on electricity, Law on transmission, regulator and system operator of electricity in BiH in 2002, Law on establishment of the company for transmission of electricity in BiH and Law on establishment of ISO for transmission system of BiH in 2004, it was initiated the reform of electric power sector in Bosnia and Herzegovina. This process has been additionally reinforced by signing the Energy Community Treaty in the region of Southeastern Europe between EU and participants of the Athens Memorandum in 2005.

 

  • The reform of the electric power sector is based on harmonization of the legislation in Bosnia and Herzegovina with requirements and EU Directives in the area of energy, protection of environment, competition and renewable sources. It is necessary to provide such an ambient that the electricity market in BiH is a unique economic area on the whole territory based on free and equal access to transmission and distribution network. Gradual harmonization of regulations shall create the regional electricity market as well.

 

  • Establishment of the independent regulatory body which has an important place in the process of reforms of the electric power sector worldwide, and in Bosnia and Herzegovina as well, is the result of knowledge that the policy related to offering safety, reliability, non-discriminatory services with reasonably created prices should be provided independently from the energy public company, which used to have monopoly for all electric power activities.

Monopolistic activities, such as control of transmission and distribution network and providing ancillary services for effective operation of the electric power system are the subject of complete regulation of the competent body. Generation of electricity and supply of end users with electricity have been gradually liberalized introducing market mechanisms.

For more details please refer to: Directive 2003/54/EC

 

  • Two entity laws on electricity and Law on transmission, ISO and SERC in BiH jointly offer the base for electric power sector to be regulated by three regulatory commissions.

State regulatory commission for electricity (SERC) mostly regulates the Transmission company, Independent system operator and international trade of electricity; two entity regulatory commission (Regulatory Commission for electricity in Federation of BiH - FERC and Regulatory Commission for Energy in Republic of Srpska - RERS) regulate electricity generation, distribution and supply.

 

  • Bosnia and Herzegovina ratified the Energy Community Treaty of the South East Europe and subsequently accepted to comply with application of Directives of the European Union on the energy market, protection of environment, competition and renewable energy following the timetable determined by the Treaty.

 

  • Parties signatories to the Energy Community Treaty of the South East Europe have committed themselves to establish a joint electricity market which shall function pursuant to standards and rules of the energy market of the European Union (EU) which they shall integrate with.

 

Opening of the electricity market in Republic of Srpska and BiH

 

State Regulatory Commission for electricity (SERC) made Decision on volume, terms and conditions and timetable of the market opening in BiH pursuant to the Law on transmission, regulator and system operator of electricity in BiH.

 

Starting from this Decision, and taking into account provisions of the Energy Community Treaty of the South East Europe and its competences stipulated by law, RERS determined draft Rule on getting a status eligible customer which was in the public hearing process until 15 August 2006.

Having conducted public hearing, RERS carefully analyzed all comments and proposals given at the general and technical hearing and written comments sent to RERS address, and in the 37th regular session which was held on 6 September 2005 it made Rule on getting a status of eligible customer ("Official Gazette of Republic of Srpska" number 88/06).

 

Participants in the electricity market

Participants in the electricity market are: eligible customers, generators, traders and suppliers.

Electricity market may be wholesale, with generators and traders of electricity operating there, and retail with suppliers and end users that got the status of eligible customer i.e. are entitled to switch.