Constitutional Court: It is unconstitutional for consumers to pay for network losses

It is unconstitutional for consumers to pay for losses in the distribution and transmission network, it was decided unanimously at the session of the Constitutional Court of Montenegro.

Citizens and the economy pay a high level of technical losses, as well as those of a commercial nature that imply "someone's" theft of electricity, which increases bills, and all according to the rules of the Energy Regulatory Agency (RAE).

Only after almost a year since the submission of the initiatives of the Union of Free Trade Unions and the Montenegrin Ombudsman, the Constitutional Court declared unconstitutional the contested part of the Agency's Tariff Rulebook, and that act is no longer applied.

However, even in the new rules of the regulator from the end of last year, the obligation for consumers to pay losses in the networks of energy companies, in the amount determined by the RAE, was retained.

The decision of the Constitutional Court is binding and automatically withdraws compensation to consumers for the period of collection of amounts to cover the losses of Elektroprivreda and Elektroprenos, which was allowed by the RAE Rulebook from 2005.

Judge reporter Miodrag Iličković announced that the Law on Energy prescribes the method of payment for unauthorized electricity, as well as compensation for losses on the transmission and distribution network.

"From this, according to the court's assessment, it follows that RAE did not have the authority to regulate these issues, but that everything is already regulated by law. For those who use energy without authorization, the Energy Act completely prescribed a precise procedure, and not that their the amount of electricity used is added to the accounts of legal customers, which in this case was prescribed by the Ordinance," explained Iličković.

Iličković noted that the Rulebook on Tariffs has in the meantime ceased to be valid and that three temporary methodologies for calculating electricity prices are being applied, which he considers harmful to citizens.

"The contested provisions of the Ordinance put citizens who regularly pay their obligations in an unequal position compared to those who use electricity without authorization," emphasized Iličković.

In order for the court to establish the legality of the new rules of the RAE, as explained after the session, an initiative is needed that challenges citizens to pay for losses.

The government policy approved the recognition of losses at the distribution and transmission level, because the energy balance predicts the level of losses that the RAE agrees to accept.

The Energy Agency explained that the technical losses that occur in networks due to the delivery of energy to consumers are paid by electricity consumers in all countries and that "the goal of Montenegro is to reduce them to a realistic level of ten to 12 percent".

Last year's acknowledged losses of 18 percent were felt through electricity prices, but it is particularly controversial that they include legal consumers paying for electricity theft, which EPCG is responsible for suppressing.