EPCG would hit citizens in the pocket, but without coverage

The request of Elektroprivreda contains a number of evidences of increasing costs instead of rationalizing operations, which should have been the key goal of introducing a strategic partner and recapitalizing EPCG, i.e. handing over the management of the company to the Italian A2A, warned a group of citizens from the non-governmental sector.

According to the requirements of the EPCG and the Montenegrin Electric Transmission System (CGES), the price of electricity for households would increase from the current 7,39 cents to 13,2 cents per kilowatt-hour, as they are demanding a price jump of 79 percent.

"All individual items in the functional unit EPCG - Distribution have been recklessly increased. They want an increase in wages and other personal incomes of 11,41 percent. Is the current average salary in EPCG of around 800 euros low, so it should be increased to 900 euros?", he said. Stevo Muk, a representative of a group of citizens from non-governmental organizations, said in a statement to "Vijesta".

"EPCG leaders should be informed whether the average salary in German electrical companies is twice as high as the average in the country, and only then should they compare electricity prices in Montenegro and Germany"

The comparison with the Germans is impressive

Energy companies are asking for a total of 376,2 million euros of costs to be felt through electricity prices, that is, for the allowed income to be 65 percent higher compared to last year.

Evaluating the demand to drastically increase costs as realistic, EPCG compared that the price in Montenegro is lower than that in incomparably richer Germany, where a kilowatt-hour of energy costs consumers 13,41 cents.

The Energy Regulatory Agency decided that, after the public consideration of Elektroprenos' request, an oral hearing will be held on Wednesday, January 26, on the request of EPCG, i.e. Distribution, and on January 28, on the amount to cover costs requested by Supply.

The RAE announced that they will consider the method of determining the price of electricity to cover losses in the distribution system, and call on the operator of the distribution system to submit "credible evidence of the procedure implemented for the procurement of electricity to cover losses."

What does the item other costs and financial cost contain, which corrections were taken into account when recognizing these costs", the Agency asks

"It is necessary to submit a report on the realization of investment and operational indicators for 2010 related to the Agreement on the sale of part of the shares and recapitalization of EPCG, which are related to Distribution and Supply," RAE said.

"Management expenses"

The regulator requires an explanation of those expenses for which an increase is requested compared to those approved in 2010, as well as for Distribution to inform the Agency whether they have obtained data for calculating the return on funds in accordance with the formula from the temporary methodology.

That entity EPCG is asking to be granted a return on investment of 10,76 percent, and last year it was 4,9 percent.

RAE believes that they should clarify whether the amount of depreciation expense was calculated in accordance with the Agency's temporary regulations, as well as submit the structure of the costs of performing joint operations with a detailed explanation of individual items.

"On what basis are the extraordinary revenues planned for 2011", asked the RAE representatives in charge of Distribution.

And Muk warns of a 119,84 percent increase in the costs of Distribution for joint operations.

"In some previous decisions, this cost was kept as "Directorate costs", or in other words EPCG administration. It is likely that this cost was related to the stories about how the arrival of A2A will bring better management and management while reducing costs. The cost of third-party services have increased by 92 percent. It is unbelievable that a company with such a surplus of employees gives almost 7,5 million euros for the services of third parties," said Muk.

How are expenses planned?

He noted that other fixed costs are a separate story with the requested increase of 1.922 percent, pointing to the current practice of putting everything the company wants to hide under the heading "other costs".

According to the announcement on the Agency's website, the method of determining the prices of electricity from domestic sources will be considered at the upcoming discussion on Supply costs.

" Given that only a table showing the costs of electricity production from domestic sources was submitted, it is necessary to provide more detailed explanations on the basis of which analysis the public supplier accepted the producer's costs, for each planned cost individually. In particular, with what number of employees and in what way calculations of wages and other personal incomes have been made," RAE stated.

RAE asks on what basis they are planned:

• the costs of purchasing jobs,
• increase in the cost of third-party services,
• costs of spare parts and materials.

RAE also asks how the property tax and mandatory contributions are calculated, as well as the cost of environmental protection.

"What does the item other costs and financial cost contain, what corrections were taken into account when recognizing these costs," the Agency asks.

They believe that it is necessary to explain the planned return on funds in more detail, because it is not clear whether the basis and rate for calculating the return are in accordance with the methodologies:

"It is necessary to provide more detailed explanations on how the calculation of wages and other personal income was performed, on the basis of which labor price and for which number of employees. How the property tax and mandatory contributions were calculated, how the cost of using transmission services was calculated, which in the request amounts to 26,4 .XNUMX million euros.

Explain in more detail the nature of the cost of provisioning for claims from earlier years, given that this cost is not foreseen by the methodology, as well as the planned return on funds of 11,6 percent. On the basis of which extraordinary revenues are planned for 2011," RAE states in the invitation to the oral hearing, which the venue will announce later.

The Deputy Prime Minister Vujica Lazović announced that today or Thursday he will speak with the representatives of the state in the Board of Directors of EPCG to explain what motivated the administration to make unrealistic demands of RAE.

The agency has until February 28 to determine according to the requirements of the energy companies, and the prices from April will depend on their decision.

It is necessary to submit a report on the realization of investment and operational indicators for 2010 according to the Agreement on the sale of part of the shares and recapitalization of EPCG, which refer to the entire company - Distribution and Supply - requested by RAE

MPs on Tuesday to open four eyes

On January 25, members of the parliamentary Committee for Economy, Finance and Budget will meet with RAE representatives in the parliament building to discuss the enormously high demands of energy companies for this year's regulatory allowed income.

The presence of journalists is not foreseen, but statements to the media after the deputies have "extracted" the information that the regulator considers the costs of EPCG and CGES to be justified (what is real and what is inflated), which amounts in the company's operations have been increased and are not supported by evidence, as determines the basic price of energy, because production is no longer regulated but a market activity.

From the non-governmental sector, they indicate that it is not clear where the increase in salary costs for Supply by almost 36 percent came from, and instead of seeing rationalization, there is a significant increase in costs.

It is also expected that RAE will ask consumers, based on the evaluation of the company's costs until Tuesday, if they expect a price change from April, to give an assessment of whether there is any basis for the increase in electricity prices that citizens fear, to not forget that consumers should, through future prices, return 19,5 million based on overpaid electricity in 2009...

The president of the parliamentary committee, Aleksandar Damjanović, said that this is a working meeting, which is why the media will not be present at the meeting between the members of that body and the RAE, but will be informed about the outcome of the meeting. -

"It will be especially important to see how RAE will evaluate the requests of energy companies," Damjanović said.

It's a treat for them to rip off consumers by paying for losses

Muk also noted that EPCG's special "treat" is variable costs or losses paid by consumers, stating that the company is asking for an increase of 73,2 percent.

"It is unbelievable that after such criticisms and stories on the subject, EPCG has the courage to demand such a thing. It is particularly interesting that the price of energy for losses was determined in the manner prescribed by the temporary methodology, and in accordance with the decision (internal act) on determining mutual rights and obligations of functional and organizational units within Elektroprivreda".

"Does this mean that 24 million euros are being stolen from customers based on the fact that EPCG's functional units have agreed so, the Agency just takes note of it and issues the bill to the customers? Why are they not referring to German practice? Can they in Germany two parts of the same monopoly firm agree on what price and in what amount they will charge something from the citizens," said Muk.

From the non-governmental sector, they indicate that it is not clear where the increase in wage costs for Supply by almost 36 percent came from, and instead of seeing rationalization, there is a significant increase in costs.

"The reservation of unpaid receivables is requested in the amount of 11 million euros. These are funds for which the Agency recognizes the right of EPCG not to collect them, but to collect the cost of its inaction from those who regularly pay their bills", are the comments of groups of citizens from non-governmental organizations organization.

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