Electricity prices for industry to increase 14% – ERS general manager

Luka Petrović, general manager of public power utility Elektroprivreda Republike Srpske (ERS), has announced that prices for the industry will increase by 14% on average, but that they will still be the lowest in the Balkans.

The announcement instantly riled up the Republika Srpska Chamber of Commerce and trade unions, which called for the electricity price hike to be delayed. New prices for the industry should apply from February 1. This price increase is yet another confirmation that prices in the region will increase remarkably this year.

In an interview with Nezavisne novine, Petrović said that ERS would not propose a price hike for households, even though this would be a cost-effective move, as non-regulated prices on the regional market are higher.

By adjusting the price for industrial customers (connected to 10 kV, 35 kV, and 110 kV), the average increase will be around 14%, but this price will still be the lowest in the Balkans, by 15 to 50% lower compared to other countries, he said.

As a reason for the price hike, Petrović named the need for electricity market liberalization for large consumers but said that ERS will secure an additional income of BAM 14.5 million (EUR 7.2 million).

Petrović said that ERS’ income could be doubled and by BAM 56.8 higher if it could sell all the electricity delivered to the industry in 2018 on the free market.

On the basis of the planned consumption of industrial customers in 2019, the total ERS subsidy to the industry will amount to BAM 57.5 million (EUR 29 million), instead of BAM 72 million (EUR 36 million) without the price hike, Petrović said, adding that ERS is still the only power utility in the region with this kind of subsidies for industrial customers.

Apart from the ERS price increase, since January all consumers in Republika Srpska (RS) will receive higher bills due to an increase in the renewable energy fee by 44%. The fee was increased from BAM 0.0053 per kWh to BAM 0.0075.

Investor interest in RS to decline – Employers’ association

The Chamber of Commerce warned that the price increase will negatively affect the competitiveness of the economy.

The electricity price was a competitive edge for attracting domestic and foreign investors, the Chamber of Commerce said in a press release.

The RS Metal Industry and Mining Union has demanded the price hike to be revoked, while a union at food company Swisslion has threatened strikes.

The price increase could prevent possible salary increases and cause layoffs, the Metal Industry and Mining Union said.

The representatives of the Chamber of Commerce, the Employers Association, the Ministry of Energy and Mining and ERS held a meeting to discuss the electricity price increase.