Letter addressed to the ERO Board: "KOSID's views on the proposal of the new tariff structure"
Prishtina, March 30, 2017 - KOSID has sent an official letter to the Energy Regulatory Office (ERO) Board of Directors, in which it outlined its views on the proposal of the new tariff structure.
In the letter it was explained that based on calculations made by KOSID, it turns out that electricity bills for the part of society that spends less electricity will increase. At the same time, the proposed made encourages electricity consumption and risks that, in addition to higher prices, to cause expensive electricity imports at peak times for citizens. The proposal also hurts businesses 0.4 kV - Category II (Two Tariffs), which according to ERO reports have a considerable volume of consumption.
KOSID has also forwarded to the ERO Board an analysis of the proposed new structure, along with recommendations for ERO. Click here for the analysis.
See below the full letter sent to ERO Board Members.
March 30, 2017
From: Kosovo Civil Society Consortium for Sustainable Development (KOSID)
To: Members of the Board of the Energy Regulatory Office (ERO)
Subject: KOSID's views on the proposed new tariff structure
Honorable Members of the Board of the Energy Regulatory Office,
On March 17, 2017, your Office has published a proposal for a New Tariff Structure, which will change the existing tariff structure. Although we understand the proposed changes from the market liberalization angle, we cannot ignore the social and environmental aspects of the proposed changes. KOSID has made some calculations out of which the electricity bills for the part of the society that spends less electricity will increase. At the same time, the proposed proposal encourages electricity consumption and risks that, in addition to higher prices, to cause expensive electricity imports at peak times for citizens.
Based on our calculations, according to this proposal, a household that spends about 300-400 kWh of electricity in a month of summer will pay 30-40% more for the electricity bill. Since it is a family that spends less, during the winter months, this family will pay the electricity bill only 1-3% cheaper. On an annual average this family will spend the electricity for at least 15% more. At the same time, almost the same percentage reduction will have a household that spends over 2000 kWh of electricity per month.
To these consumers who, besides the environmental and health costs of lignite power generation, cause greater network load, the energy bill for them will be cheaper. This is at a time when unemployment is over 30% and when the level of poverty is among the highest in Europe. Fixed tariff reduction is not reflected in the total revenues which, on the basis of the proposal, are by 3 million more than if the difference from the fixed tariff reduction was deducted.
The proposal also hampers businesses 0.4 kV - Category II (Two Tariffs), which according to your reports have a considerable volume of consumption. Considering that according to the Kosovo Agency of Statistics, a very large part of businesses are registered as agricultural businesses, accommodation and other service businesses that develop their main activity in the summer months. The proposed tariffs in these summer months will cause these businesses from 9.09 € / kWh in high tariffs to 13.88 € / kWh; from 4.54 € / kWh in low tariff to 5.78 € / kWh. We consider that at least it should have been taken into considered the costs that this would cause to business activity, to make calculations and to be told openly that in comparison with the same months of 2016 there will be an increase during the summer months.
We have supported a liberal electricity market, especially under an integrated regional market. However, we consider that this needs to be achieved with a more balanced approach that does not harm the sensitive layers of society and does not deepen social inequality. Among the fundamental values of our state is the social equality sublimed in Article 7 of the Constitution of the Republic of Kosovo. For this, you as members of the ERO Board, consider those Kosovar families who are unable to pay more for electricity or have invested in efficiency measures and care not to spend more than 600 kWh. You represent an institution that is entrusted with regulating a field of public interest and as such the decisions you have ahead, especially this decision, directly affect the energy savers and its sensitive layers.
Attached to this letter we are forwarding an analysis we have made about the proposed new structure along with recommendations for ERO. We kindly ask you to keep in mind these elements before deciding on the proposed changes.