Consumers pay 35 million for distribution losses

Even during the next three years, Montenegrin consumers will not be spared from paying the high price of technical losses in the distribution network, which is managed by the Montenegrin Electric Distribution System (CEDIS), a company wholly owned by the state-owned Elektroprivreda.

This can be seen from the Report of the Energy Regulatory Agency (RAE) on the analysis of the documentation for approving the next three-year income to CEDIS.

"During that period, consumers will pay CEDIS more than 35 million euros, in order for this company to cover technical losses in distribution, which fall on them. That is a high price, especially if it is known that in the past five years the cost of technical losses for consumers was about 40 million", informed "Vijesta" from the non-governmental organization Action for Social Justice.

This cost is determined by the RAE based on two main parameters - the rate of allowable losses and the price for electricity, which is granted to CEDIS to cover the losses.

"RAE has meanwhile reduced that rate from 11 percent to around 8,5 percent. In developed distributions, the average loss is from three to six percent. However, the public has never talked much about the method of determining the price of electricity to cover losses, even though that parameter also significantly affects the final cost", notes the NGO.

By combining domestic and electricity prices on the European market and applying the permitted loss rate, RAE determined an average price for consumers of around 53 euros per megawatt, i.e. determined that CEDIS is approved to cover 12 million for 2020, 11,6 million for the next and 11,5 million for losses in 2022.

"If RAE, for example, applied only the price of electricity from the domestic market, then consumers would not have to pay 35 million euros, but five million less," concluded this NGO.