Key regulatory issues confronting AERS

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1 ENERGY AGENCY OF THE REPUBLIC OF SERBIA Key regulatory issues confronting AERS Petar Maksimović Secretary General NARUC Energy Regulatory Partnership Program AERS - PUC Introductory Partnership Activity Belgrade, October 29 November 2,

2 Contents Regulatory developments Agency funding Energy Community and SEE REM State of play in EU Conclusions 2

3 REGULATORY DEVELOPMENTS 3

4 Key tasks of AERS Price Regulation Pricing methodologies Tariff systems (Gvt. approves) Methodologies for connection charges Opinion on the energy prices (Gvt. Approves) Dispute Settlement Disputes on TPA Disputes on connection to networks International affairs Licensing Issuing of licenses Suspending and revoking of licenses Keeping the license register Market Monitoring Price monitoring Approving Market Rules Approving Grid Codes Setting eligibility threshold for eligible customers Monitoring compliance with license conditions Keeping the register of eligible customers 4

5 Status of activities (1) Price Regulation Pricing methodologies Tariff systems (Gvt. approves) Methodologies for connection charges Opinion on the energy prices (Gvt. Approves) Methodology Methodologies Price Tariff Main setting systems challenges: for for procedure: defining connection for: tariff elements for charges: the calculation of: end- use of price electricity of power for tariff customers AERS transmission system, (including January 2007 prices of generation, Implementation wholesale natural for Sets electricity, pricing and retail methodologies of gas transportation, July trade the new for tariff price January 2007 customers), regulation Proposes August tariff 2006 systems oil and oil derivates transportation price through of product natural gas pipelines, for tariff January customers, 2007 Meeting (including for natural the objectives prices gas, of wholesale February of price and retail use regulation of electricity distribution system, trade for tariff Government customers), August 2006 January 2007 Drafting power Approves transmission methodologies tariff UoS systems charges, and tariff natural gas distribution, January 2007 August systems 2006 for natural gas storage calculating electricity prices for tariff natural gas transportation UoS charges, Drafting customers, Regulated regulatory 5th January companies accounting 2007 August 2006 calculating guidelines Calculate natural and propose gas prices prices for tariff power distribution UoS charges, August customers, January Treatment of asset valuation and natural depretiation gas distribution (guidelines?) AERS UoS charges, August Gives opinion 2006 Quality of data on proposed prices transportation UoS charges for oil, August 2006 Unbundling of accounts Government transportation UoS charges for Incentive derivatives, Approves based pricing August the 2006 prices Relations with stakeholders 5

6 Status of activities (2) Licensing Issuing of licenses Suspending and revoking of licenses Keeping the license register Suspending Keeping and Issuing Main revoking the challenges the license licenses of licenses register licenses Criteria for revoking and suspending licenses IT upgrade No (license licenses License register) Over suspended 400 register licenses or functional revoked issued by now 6

7 Status of activities (3) Dispute Settlement Disputes Appeals on TPA Disputes Appeals on connection to networks Disputes on Disputes Main connection challenges TPA to networks ~200 Large appeals number submitted of appeals to on No AERS connection disputes so to far networks 7

8 Status of activities (4) Market Monitoring Price monitoring Approving Market Rules Approving Grid Codes Setting eligibility threshold for eligible customers Monitoring Keeping the compliance register of eligible with license conditions customers Keeping Monitoring the compliance register of eligible with license customers conditions Market surveilance Main challenges Define Market Electricity Register Review Jurisdiction 25 procedures design of GWh/50 operational the Transmission reporting Mcm for price schedule Draft Electricity IT Interfaces monitoring upgrade support unoficcially 3 GWh with Distribution the submitted Competition Implement Coordination Gas authority Transport all eligible price difficultmonitoring except timing Oil Market households and monitoring derivatives guidelines transport Gas Data distribution collection 100% market and opening analysis Action 8

9 Agency funding 9

10 Agency funding EU grant (CARDS programe) License fees UoS charges 10

11 Energy Community and SEE REM 11

12 Main features of the EnCT Harmonization of legislation SEE REM Pan- European energy market Institutional framework Decision making process 12

13 Status of activities in the EnC (1) electricity (E), natural gas (G), Vulnerable customers (C) E- ETSO ITC mechanism E- Flow based coordinated auctions E- Establishment of the Implementation Group E- SEE balancing mechanism E- Wholesale market opening E- Priority regional projects (SECI) E- Capacity mechanisms/ investment optimization E- Market monitoring pilot project (USAID) 13

14 Status of activities in the EnC (2) electricity (E), natural gas (G), Vulnerable customers (C) G- New gas infrastructure investment regulation G- SEE Gas Survey G- SEE gasification study (WB) C- MoU on vulnerable customers C- Giudelines on protection of vulnerable customers C- Action plans for protection of vulnerable customers Е, G, C- Implementation review 14

15 STATE OF PLAY IN EU 15

16 Market development obstacles in EU DG TREN and DG Competition reports: No single market yet Unbundling and vertical foreclosure Lack of capacities for cross border trade (interconnection tie lines) Lack of coordination btw. TSOs Competencies of regulators National level (lack of harmonization) EU level (lack of coordination) 16

17 Electricity prices for industrial customers in Eu

18 Proposed changes in EU Continued liberalization of national markets (3 rd legislative package) Regional integration (ERGEG regional initiatives) Coordination btw. regions Single EU energy market 18

19 Final remarks 19

20 Conclusions Security of supply Competitive economy EU accession Investment climate AERS Sector efficiency SEE REM Economic growth Environment and RES 20

21 ENERGY AGENCY OF THE REPUBLIC OF SERBIA Thank you for your attention! Contact details: Petar Maksimović Energy Agency of the Republic of Serbia, Terazije 5/V, Belgrade Tel: ; Fax: petar.maksimovic@aers.org.yu, URL: 21