BiH’s two entities take different approaches in adjusting power prices for businesses

The new benchmark electricity price for businesses in the Republic of Srpska will be EUR 53 per megawatt-hour, but the increase won’t be the same for all customers. In the other entity of Bosnia and Herzegovina, the Federation of BiH, amendments to the Law on Electricity are being prepared to allow its government to limit electricity price growth.

According to the latest updates, power prices are about to be lifted, but not as much as speculated during the past few weeks. The authorities’ decisions in the Republic of Srpska (RS) and the Federation of BiH should clear some of the uncertainty for the corporate sector, given that the deadline to sign supply contracts expires on January 1, 2022. Indications that tariffs could be boosted by as much as 350 percent prompted companies from FBiH to jointly refuse to sign such contracts.

At the same time, firms in Serbia and Montenegro still don’t know the prices for next year. The energy crisis isn’t showing any sign of easing – prices at electricity exchanges soared to EUR 400 per MWh.

The price in the Republic of Srpska has increased from EUR 38 to EUR 53 per MWh

After Srpska’s Prime Minister Radovan Višković met with the representatives of government-controlled power utility ERS, the Chamber of Commerce of RS, and Union of Employers’ Associations of RS, the government said the price of electricity for the industry would be changed to EUR 53 per MWh.

At the meeting, ERS pointed to the spike at electricity prices on world markets. The price is now EUR 250 per MWh, with forecasts of further growth, so the price also had to be corrected for the Republic of Srpska companies.

The government underlined that businesses would pay less than their counterparts in FBiH and neighboring countries despite the change.

There are privileged categories of consumers

It is difficult to say what the percentage of the increase is because ERS sells electricity to companies under market terms while households still have a guaranteed price.

ERS said it offers its customers discounts of 52 to 82 percent from EUR 250 per MWh. Hospitals, water supply companies, and public lighting utilities pay five times less than the benchmark, the tariff for agricultural consumers is four times lower, the price for public institutions is three and a half times lower while trade, mining, construction, and transport sectors have a 65,6 percent discount.

The price increase for manufacturers is 25-27 percent

Saša Trivić, president of the Union of Employers’ Associations of RS, said the price of electricity for companies in RS would increase from the current EUR 38 to EUR 53 per MWh, Nezavisne novine reported.

The monthly bill for manufacturers will be increased by 25 to 27 percent, Trivić stated, adding that some other categories would have even higher bills.

FBiH: Price increase only for large companies

Nezavisne novine also reported that the House of Representatives of the Parliament of FBiH approved the amendments to the law on electricity to allow the entity government to limit the rise in electricity prices.

For the change to enter into force, it must be adopted by lawmakers in the House of Peoples.

Admir Andelija, director of state-owned energy producer Elektroprivreda BiH (EPBiH), said the changes are aimed at preventing disturbances in the economy due to the sharp rise in electricity prices.

EPBiH demanded the introduction of a price limit and to divide consumers into three categories

In November, EPBiH proposed to the FBiH government to limit the electricity price by dividing consumers into three categories, setting ceilings for the increase to 10 percent and 30 percent, and fixing the third group’s level to EUR 125, said Andelija.

Andelija underlined that after adopting the amendments to the law on electricity, the FBiH government would decide on limiting prices.

Prices won’t be increased for households and small companies, but only for large companies, Andelija added.