Prishtina, March 25, 2021 – Following the constitution of the Assembly of the Republic of Kosovo, the American Chamber of Commerce in Kosovo, Kosovo Chamber of Commerce, and the Council of European Investors call on the Presidency of the Assembly and members of the new legislature to urgently address the issue of the transition of commercial customers to the voltage level of 35 kV and 10 kV in the free market of energy supply, respectively, the legal obligation to provide a suitable operator for electricity supply with non-regulated tariffs beginning April 1, 2021.
While in ideal circumstances, the liberalization of the energy market would bring benefits to consumers in the market, in the case of Kosovo, this is impossible for many years, because, despite the licensing of some operators, only one of them has the capacity to function in practice as a supplier of last resort.
In such circumstances, combined with the fact that the Energy Regulatory Office does not have a functioning Board, the American Chamber of Commerce in Kosovo, the Kosovo Chamber of Commerce and the Council of European Investors request from the members of the Assembly of the Republic of Kosovo that before March 31, 2021, they use the legal possibilities for the postponement of the above-mentioned transition, until the creation of real opportunities which would enable the functional liberalization of the energy market.
In the conditions of a limited supply, and when there is a real possibility that the only operator with market supply capacity can abuse the dominant position, commercial consumers, mainly the manufacturing enterprises in the country, will have limited bargaining power, and consequently offers of significantly higher tariffs for energy supply. For many industries in Kosovo, electricity costs account for a large percentage of operating costs, which would further reduce their comparative advantages over manufacturers in other countries in the region, thus increasing competitive pressure on them.
Possible delay in decision-making by lawmakers would threaten the operations of the aforementioned enterprises and prompt them to seek further investment opportunities in countries in the region, where energy tariffs for commercial consumers are more favorable than in Kosovo, as long as these customers also subsidize the tariffs of residential or household customers. This would be contrary to the overall commitments to strengthen the domestic manufacturing sector and maintain sustainable jobs.
The American Chamber of Commerce in Kosovo, the Kosovo Chamber of Commerce, and the European Investors Council reiterate their concern that from the preliminary offers received by companies to move to the free market, a tariff increase of 30-40% is clearly noticed, while expressed in monetary terms, it means that a company that currently pays an annual bill of 1 million euros, after moving to the liberalized energy market will have to pay an additional 300,000-400,000 euros. And, as stated quite at the beginning, this would be contrary to the benefits that would result from switching to a free market.