MANS welcomes the adoption of amendments to the law on energy by which is impossible to legal norm technical losses, because in that way it is prevented the attempt of the Government to the detriment of consumers to realize new concessions to Italian partner A2A in the Electric Power Industry of Montenegro (EPCG), who for years has not managed to reduce losses to a reasonable level.
The final consumers of electricity should not be interested in a huge technical losses of the EPCG. Specifically, consumers should only pay reasonable losses which in developed countries amounts to five percent, but they are paying them in a much higher rate which is arbitrarily determined by the Regulatory Agency for Energy (RAE), and only at their expense, in favor of energy companies.
RAE for years tolerates EPCG to keep tens of millions of Euros in private banks, rather than to invest them in the modernization of the distribution network and by doing that to reduce technical losses to acceptable level, but the price of this shameless policy pay consumers through increased electricity bills.
It would be exactly the Governments’s decision to define the technical losses by the Energy Law to not only reward the EPCG and its alleged strategic partner who did not sufficiently invested in the development of energy network, but also the regulator who would get a legal cover to continue with arbitrary assessments of loss rate to the detriment of final users.
MANS has previously indicated that the Government never explained why is seeking legal definition of technical losses and found that it can be interpreted as the first concession to the Italian company A2A in complex negotiations of would it retain ownership in EPCG or it would have to pay at least 400 million for the entire package of shares.
Management contract between the EPCG and A2A officially expires on April 1st of 2015, and the representatives of the Italian company in the end of last year demanded from the Government security of guarantees for the profitability of the capital invested, the safety of regulatory framework, as well as finding a third partner to build second thermal power plant in Pljevlja.
One of the three key indicators to assess whether the Italians were eligible to manage the EPCG exactly are technical losses. In this sense, when in 2009 the A2A entered into the state energy company loss rate was 22.7 percent and the Italian company has committed that by 2014 will reduced them to 11 percent, but it did not happen.
Thus, in 2011 were suppose to be 18 percent and were 19.2 percent, in 2012 are set at 15 percent and realized 20.8 percent, while at the end of 2013 were 18.9 percent although it was projected 13 percent. In the end of last year rate of loss is projected at 11 percent and is estimated to be up to 18 percent.
All this clearly shows that the Italian company is not in a position to set conditions, because it did not meet indicators of the management contract, and on the other hand it was a justified fear that the Government’s decision would further encourage energy companies to invest even less in the modernization of the network, because the Law itself guarantees them that citizens will continue to pay enormous technical losses in distribution.
In addition, the Government’s decision was controversial and also due to the fact that in the upcoming years EPCG will not be the only producer of electricity, since currently a series of small hydro power plants are built, and is announced the construction of wind farms, so the Government’s proposal would introduce the obligation that the final consumers pay for the technical losses of numerous private investors.
In this regard, it is enough to mention some of the private companies, such as “BEMAX” that in the public is linked with Milan Rocen, “Hidroenergije Montenegro” in which the ownership holds Oleg Obradovic, “Celebic” owned by Podgorica-based construction tycoon Tomislav Celebic, and from recently and “BB Solar” the Prime minister’s son Blazo Djukanovic and “Sinergy” which is associated with the Prime minister’s godfather Vuk Rajkovic.
MANS evaluate as a positive step the fact that in the Montenegrin Parliament it is not adopted the Government’s problematic solution of technical losses, and expects the the members of the Parliament will have the same attitude in any possible future situations where the Government would proposed a similar or the same solutions.
MANS
