Establishment of Energy Regulatory Office

On 30 June 2004 the Energy Law, Electricity Law and Law on Energy Regulator were promulgated. These laws are promoting the integration of Kosovo into the European Economic area with a view to its future accession to the EU; participation of Kosovo in all relevant international agreements that Kosovo is a party to or may become associated with and gradual harmonization of the energy legislation of Kosovo to the EU’s energy legislation.
Law 2004/9 “on Energy Regulator” established a strong, fully-independent Regulator (Energy Regulatory Office - ERO), completely autonomous from any Governmental Department to exercise economic regulation in the energy sector (Electricity, District Heating and Natural Gas) and defined its executive powers, duties and functions, primarily amongst which are:

  • the conditions and criteria for issuing licenses to carry out energy activities,

  • the procedures for granting permits for the construction of new generating and transmission capacity,

  • the criteria for regulating network and public supply prices and approving tariffs,

  • the conditions of energy supply,

  • monitoring the effective unbundling and development of competition in the energy sector

  • costumer protection, etc.

The establishment of ERO falls within the wider framework of energy policy harmonization in South Eastern Europe. On behalf of Kosovo, UNMIK signed Energy Community of South East Europe (ECSEE). By doing that, Kosovo became an equal partner and player in establishing ECSEE, which is of prime importance for its economic development, because of favourable lignite reserves and the ideal position of Kosovo for power exchanges in the SEE region. Kosovo is committed to become a power exporter after 2012 and to further reinforce its central role in facilitating power wheeling in the SEE region.

On an annual basis ERO reports to the Assembly of Kosovo and the SRSG. The report shall be made public.

In general principles ERO is responsible for the establishment and enforcement of a regulatory framework for the energy sector in Kosovo, in order to achieve compliance with the obligations under the Treaty establishing Energy Community and harmonization to the “Acquis Communnautaire” on energy, to ensure non-discriminatory access of all users to the energy networks at prices reflecting true economic costs, to ensure the effective unbundling of the vertically integrated utilities and the non cross-subsidization of prices, to promote competition and the efficient functioning of the energy market, and to promote economic efficiency by providing the appropriate long and short term pricing signals.

While performing its activities ERO cooperates with energy enterprises, Ministries (especially MEM), different associations and institutions in Kosovo:

·         Ministry of Energy and Mining (MEM) among others responsible for energy sector strategy and policy (preparation and implementation), development of secondary legislation (including technical standards and norms), energy inspectorate, renewable energy sources and rational use of energy, coordination of donors and attraction of investments (“one-stop-shop”) – representing “State Energy Authority” according to MoU on REM;

·         UNMIK / EU Pillar, one of the four pillars of UNMIK in charge of Economic Reconstruction of Kosovo;

·         Kosovo Trust Agency (KTA), under the auspices of the UNMIK/EU Pillar, which among others continues to perform the business oversight over POEs (KEK, Iber Lepenc/Hydro Power Plant-Ujmani and 3 district heating companies). According to UNMIK regulations, KTA can restructure KEK, lease the assets, provide for a management contract, however, KTA cannot privatise the assets of KEK. The same is valid for other POEs;

·         Independent Commission for Mines and Minerals (ICMM), established in January 2005 by UNMIK regulations 2005/2 – representing “Independent Regulatory Agency” in the Mining sector;

·         Korporata Energjetike e Kosovës (KEK), the vertically integrated power utility of Kosovo including coal mining, power generation, transmission & dispatch, distribution and supply, KEK is currently the subject of incorporation and legal and accounting unbundling processes, which will be completed by the end of 2006;

·         (4) District Heating (DH) Companies of Prishtina (Termokos), Gjakova, Mitrovica (Termomit) and Zveçan (vertically integrated), the assets of which are also in custodianship of KTA; The DHC of Prishtina and Gjakova are in the process of incorporation;

·         Donor Community, the representative offices of the European Agency for Reconstruction (EAR), United Nations Development Program (UNDP), the World Bank (WB) United States Agency for International Development (USAID), and the bilateral donors: Gesellschaft für technische Zusammenarbeit (GTZ) and Kreditanstalt für Wiederaufbau (KfW) both of Germany, SDC of Switzerland, Sida of Sweden, further maintained in Prishtina.

Other related links:

European Union

 European Commission Directorate General for Energy

Transeuropean Energy Networks

Energy Associations

Council of European Energy Regulators (CEER)

The European Regulators’ Group for Electricity and Gas (ERGEG)

European Association of Electricity Transmission System Operators (ETSO)

Union for the Co-ordination of Transmission of Electricity (UCTE)

Energy Regulators Regional Association (ERRA)

Energy Community Secretariat (ECS)

International Financial Institutions

European Bank for Reconstruction and Development

World Bank