(Podgorica, 13 January 2012) – As a group of citizens, MANS representatives today filed charges with the Constitutional Court in Montenegro against the Regulatory Agency for Energy (RAE), seeking the annulment of its latest decision on electricity price increases.
At the request of the Electric Power Company of Montenegro (EPCG) in mid-December of last year the RAE decided to alter the permissible revenues collected by 6.8% for two-tariff and 6.5% for single-rate meters.
We requested an annulment of the decision due to the problematic ways in which the import and export of electrical energy by the EPCG was calculated, totaling over five-million euros for the first nine months of 2011. That is, the RAE did not include a single word in its rationale that would explain the grounds on which it approved the EPCG’s expenditure increases.
The existing ordinance for modifying regulated revenues requires that the EPCG submit the entirety of its documentation to the RAE and that on this basis the RAE make a ruling. This did not occur.
Instead the EPCG only permitted the RAE a viewing of the documentation. MANS was able to obtain a copy of the minutes taken by RAE officials during this viewing. The minutes indicate that this ‘review’ of EPCG documentation only lasted five-and-a-half hours, which is an insufficient amount of time to carry out a detailed and comprehensive analysis of the contract and accompanying documentation. Looking at the minutes, it’s also impossible to determine whether electricity was truly procured at the most favorable price and whether or not the increase in prices was really justified.
According to the Law on Energy, electrical energy must be procured at the best rates available, thus securing the most favorable tariffs for end-users.
One example of the ‘legality’ of the RAE’s latest decision to increase the price is certainly the approved expenses for the EPCG and the difference in price with energy taken from the Zeta Energy company. Namely, the RAE approved these expenses on the basis of the Government’s Decision (12 November 2011), which violated the constitutional principle prohibiting retroactive implementation of laws and regulations.
The RAE’s mode of operation leaves sufficient room for suspicion that this institution is seriously negligent when it comes to its regulatory function and that it is increasingly in the service of the EPCG’s new owners and their interest in profit.
Bearing in mind that the latest increases in electricity prices weigh heavily on the household budgets of Montenegro’s already impoverished citizens, MANS expects that the Constitutional Court will rapidly process these charges and schedule a public hearing.
