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Reading: An Increase in the Price of Electricity is inevitable, but the Model is discriminatory
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Sarajevo Times > Blog > BUSINESS > An Increase in the Price of Electricity is inevitable, but the Model is discriminatory
BUSINESS

An Increase in the Price of Electricity is inevitable, but the Model is discriminatory

Published April 13, 2024
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Electricity is more expensive, but by blocks and different tariffs. We analyze: who will pay and how much? The Federal Regulatory Commission is on the move, before citizens receive new consumption calculations on their accounts. Opinions divided. On the one hand, they justify the introduction of new tariffs, and on the other hand, the profession warns that the increase in prices is inevitable, but also according to the offered model, it is discriminatory. It is also possible to decide on the constitutionality of this decision.

The long-considered block tariffs for the calculation of electricity consumption have been sent to FERK for consideration by the Public Company Elektroprivreda BiH. The first man of Elektroprivreda claims – there will not be a linear increase in prices, but those who spend more will pay more through block tariffs.

“In block tariffs, there should be no increase in the price of electricity for 60 percent of citizens, and only about three percent are large consumers. 430,000 households would not be included in the higher category”, said Sanel Buljubasic, Acting Director. director of JP Elektroprivreda BiH.

The proposal includes three tariffs. The first “green” is the one in which the consumption is up to 268 kWh per month and the cost of the first 268 kw will be calculated according to the current price list. The cost from 268 to 1,000 will be calculated at the price for the “blue” tariff, which according to Elektroprivreda data applies to about 37 percent of customers.

Consumers who exceed 1,000 kWh per month will be billed at the “red” tariff. The profession believes that the consumption limit for the first category, that is, real consumers, is not realistic and should be approximately 400 kw.

“There is a huge number of households with a consumption of 0 kilowatt hours during 11 months of the year. That average of 268 kilowatt-hours is unrealistically low because a whopping zero kilowatt-hours were taken from 11 months when the diaspora or the owners of these facilities are not at all in Bosnia and Herzegovina,” explains Amer Jerlagić, energy expert and former director of JP Elektroprivreda BiH.

There are many reasons for the introduction of block tariffs – reduced coal production in the mines of the concern by about 50 percent compared to the required 5.5 million tons, poor financial results in the previous year and a loss of more than 142 million marks, as well as the temporary closure of the Zenica coal mines.

“If by any chance they had that amount of coal at their disposal and had full depots, i.e. plant readiness, they would have enough energy for domestic needs and for export,” adds Jerlagić.

“First of all, it was necessary for Elektroprivreda to restructure its own business, that is, its business model, and that is the biggest criticism of both us representatives and the public – why don’t you clean up your yard before proposing a measure that means price increases mainly for all consumers,” says Admir Čavalić, representative of the SBiH in the House of Representatives of the FBiH Parliament.

The business plan of Elektroprivreda in the period 2024-2026. an increase in the price of electricity and an increase in income of up to 10 percent are foreseen. The Government of the Federation of Bosnia and Herzegovina and the line ministry apparently agree with the plan.

“It is simply about energy saving methods for the next period. If we return to the problem of coal production – which directly affects the level of production, then it is justified that Elektroprivreda can include such an activity in its plan,” said Vedran Lakić, Minister of Energy, Mining and Industry of the FBiH.

Elektriprivreda, the fact is, has the ability to establish different prices in relation to the amount of electricity consumed. However, the profession also believes that the economic and social card of the consumer should have been prepared first and that this way of introducing a tariff model for calculating consumption is discriminatory. They warn of a similar scenario as in the RS, where the Constitutional Court found at the end of February that the decisions on new tariffs are not in accordance with the constitution and the law.

“It is not a luxury good that you can say: I will or will not use electricity depending on comfort and luxury. Electricity is a necessity and a need of every household, no matter what the price will be, you will probably spend the same, that light bulb in the hallway will probably be lit both with and without the new tariff, but you will be discriminated against in relation to cottages, empty houses, apartments”, he emphasizes.

According to the submitted proposal, the application of the new tariff model should start from June 10 of this year. The decision of the Regulatory Commission for Energy in the Federation on the proposal of Elektroprivreda, which was approved by the Management and Supervisory Board of the company, should be known within 60 days, Federalna writes.

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