Albania unbundles power distribution system operator OSSH in line with EU rules

The Energy Community Secretariat said Albania has complied with EU regulations so far in the separation of distribution system operator OSSH from any electricity supply activities and that the remaining steps would be monitored.

The Ministry of Infrastructure and Energy controls electricity supply and distribution in Albania through state-owned company Operatori i Shpërndarjes së Energjisë Elektrike (OSHEE). The government has unbundled the activities in line with the Power Sector Law, which transposes the European Union’s Third Energy Package, the Energy Community Secretariat said in its latest note.

There are only a few segments of the unbundling process that need to be completed

At the beginning of last year, the distribution system operator (DSO) Operatorii Shpërndarjes – OSSH, free market trader FTL and universal service supplier FSHU became operational as OSHEE’s subsidiaries. According to the rules, the national DSO must be separate legally, functionally and in accounting.

The secretariat verified the compliance with the requirements, though it added suggestions for a few areas of the unbundling “where further improvements are necessary or recommended.” The process should be monitored by the Energy Regulatory Entity or ERE, according to the report.

The process should be monitored by the Energy Regulatory Entity or ERE

For instance, the possibility for OSHH to be able to raise money on the capital market needs to be made explicit and the transfer of the assets for the DSO activity isn’t officially complete, the Energy Community Secretariat said.

The EU’s Electricity Directive stipulates that distribution system operators must be independent of the supply branch and that market distortion through cross-subsidization and discrimination of other supply companies must be prevented.

The government also owns the Transmission System Operator (OST) and the dominant electricity producer – Albanian Power Corp. (KESH).