Under this draft law, electricity produced by the current state-owned hydropower plants, accounting for more than 90 percent of domestically produced electricity, will be used to supply only household consumers and small and medium-sized enterprises, excluding big consumers
Tirana Times
TIRANA, Oct. 3 – Albania’s Economy and Energy Ministry says the draft law paving the way to the liberalization of the electricity market is ready for approval. In a statement issued on this week, the ministry said that big energy consumers will be supplied with electricity by qualified suppliers other than CEZ Shperndarje at prices not regulated by the energy watchdog ERE to minimize rising costs for state-owned power utility KESH.
“This intervention will make possible the real opening and liberalization of the electricity market in Albania which currently is only formally liberalized and will give an end to monopolies created in the electricity market,” says the Economy Ministry.
The ministry says the situation with the big electricity consumers mainly of the mining and cement industry recently switching to tariff customers and getting electricity supply by state-owned KESH through private CEZ Shperndarje is leading to increased costs for state-owned power corporation which in drought periods will be forced to import electricity at considerably higher prices than the domestically produced energy from the hydropower plants.
CEZ Shperndarje’s demand for electricity for big consumers is estimated at 800 million kWh, accounting for 15 percent of total annual demand.
The Economy Ministry says that currently more than seven companies have been licenced by the Energy Regulatory Entity to provide electricity to big consumers known as qualified consumers at unregulated tariffs.
State-owned KESH proposes that the changes to the “electricity sector” law dating back to 2003 must determine that electricity consumers connected to the 110 kw transmission system and above and those who are not connected to this grid but consume more than 50 million kWh annually will be automatically considered as qualified customers and supplied with electricity on the free market by qualified suppliers.
Under this draft law, electricity produced by the current state-owned hydropower plants, accounting for more than 90 percent of domestically produced electricity will be used to supply only household consumers and small and medium-sized enterprises, excluding big consumers.The Ministry says that the changes must be adopted as soon as possible so that all market operators are prepared to operate normally next year.
The draft law has been prepared with the consultation of foreign companies under EU directives for the electricity market.
Albania’s business community represented by Konfindustria has also demanded changes to improve the de facto monopoly situation in the electricity market. Konfindustria representatives have also demanded that changes are made in the control of power meters and control tariffs and the monopoly set by law to the state-owned Albanian Post for the delivery of power bills.Czech-owned distribution operator CEZ Shperndarje has applied for a 4.5 percent increase in electricity prices for 2012. State-owned KESH and the transmission system operator OSSH have also demanded price increases.
Last December, Albania’s Energy Regulatory Agency (ERE) decided to keep electricity prices for 2011 unchanged, turning down requests by the three local operators who had wanted to increase power prices by an average of 12 percent.
ERE’s board of Commissioners decided to continue applying the two-tier price level, under which Albanian households will pay 7.7 lek/kWh for a consumption of up to 300 kWh a month and 13.5 lek for each kWh they consume above the 300 kWh threshold.
Competition Authority pushes market liberalization
The Energy Ministry and ERE have been asked to take further steps to liberalize the country’s highly monopolized electricity market by allowing competition which would lead to better service and lower prices. Under some recent recommendations made to the government and ERE, the latter being a legally independent institution, the Competition Authority demands that both state owned electricity producer KESH, and private electricity distribution operator CEZ should operate financially and functionally separated from their wholesale and retail public suppliers.
Currently, state owned KESH, is composed of two vertically integrated segments known as KESH-Gen and the public wholesale supplier. Meanwhile, CEZ Shperndarje (Distribution) also continues operating under the same vertical structure, with two units known as CEZ Shperndarje and the Public Retail Supplier which are a single economic unit.
