In the municipalities of Podgorica, Danilovgrad, Nikšić, Šavnik, Berane, Mojkovac, Plav, Plužine, Pljevlja, Tivat and Ulcinj, in the coming year they plan to increase the water and sewerage bill for citizens, and to make it cheaper in Herceg Novi and Kotor.
They want to increase these bills for companies in Danilovgrad, Nikšić and Šavnik, and decrease them in Podgorica, Berane, Mojkovac, Plav, Plužine, Pljevlja, Herceg Novi, Kotor and Tivat, while in Ulcinj the price for that category of consumers will remain the same.
This is the proposal of the price list of municipal companies, which the Regulatory Agency for Energy (RAE) has approved, and which must be finally confirmed by the municipalities.
From January, citizens and the economy will pay the bill for "water and sewerage" according to the new price list established by the municipal water and sewerage companies (VIK) based on the new RAE methodology, which in some municipalities leads to price increases, and in others to a decrease.
Yesterday, the RAE board determined the price list for these 13 municipalities, incomplete documentation was submitted for three municipalities (Budva, Cetinje and Rožaje), so the regulator refused to issue approval for the price list, while the documentation submitted by the municipal companies from Bar, Andrijevica, Kolašin is being analysed. , Bijelo Polje and Žabljak.
"News" in the table for municipalities, for which consent has been given, give average bills for "water and sewage" for citizens and companies this year and the calculation for the next year, which shows who will see price increases at the beginning of 2021, and to whom discount for these services.
Risk of Gusinja and Petnjica
The municipal companies from Gusinje and Petnjica have not submitted their requests for determining the price list in accordance with the new methodology to the RAE.
"The law defines that if a request for approval of the price proposal for the performance of regulated communal activities is not submitted within the deadline, that is, the competent municipal authority refuses to give approval to the price proposal or for some other reason prices are not determined, the temporary prices will be applied, which are 10 percent lower than the price shown on the invoice in the month preceding the month in which the request is submitted (July 2020). Utility companies (KD) from Gusinje and Petnjica ran the risk of applying temporary prices for the part of 2021, which has the consequence of financing the cost coverage in the part that is not covered by the temporary price, from the budget of those municipalities," RAE explained.
The methodology for determining prices for the regulation of utility activities has been in force since June 23 this year, and municipal companies that provide these services had a two-month deadline to submit a request to the RAE for approval of the service price proposal. The deadline expired on August 24, and RAE had three months from that day (November 25) to make a decision on the proposals. Municipalities have three months to approve the price list submitted by their companies.
The RAE says that it would be good if that work was completed by the end of December so that the established prices could be applied from January 1.
The regulator also approved the new price list for municipal waste water treatment for "PPOV Kotor - Tivat" and for the pumping, removal and disposal of municipal waste water from septic tanks for "S&E Tehnica" Bar, the Podgorica Housing Agency and for the municipal water supply companies that they provide the service in Berane, Herceg Novi, Nikšić, Pljevlja and Podgorica.
Separated fixed part of consumption
RAE explains that the price for the year 2021 was determined to cover the justified operating costs of water companies and consists of a fixed part (which does not depend on consumption) and a variable part of the price of the public water supply service and the acceptance and removal of communal wastewater and the price of its service purification.
"The fixed part of the price is not a new item on the bill, but only the separation of the existing part of the costs into the part of the price that represents the fixed component. The goal of introducing this method of price formation is the most stable and even financing of municipal enterprises, which will have a positive impact on the majority of consumers, except for the group of consumers who do not use these services for a certain part of the year", emphasized the RAE.
RAE's analysis showed that it is a long-standing practice "for companies to subsidize citizens", and that there is a significant disparity between the prices of services for these two categories, and it is up to 4,38 times higher for companies.
By 2025, there will be equalized prices for all consumers.
"What the new rules bring"
"The methodology established a uniform way of determining prices on the territory of Montenegro, that is, a non-discriminatory approach to price determination was established. In this regard, in most municipalities there will be a reduction in prices for legal entities and an increase in prices for natural persons, in order to equalize..." RAE pointed out. They add that the development of the methodology was preceded by a public discussion, round tables and a guide for its application in order to better prepare municipal enterprises for this work.
"The methodology represents the most significant part of the regulatory framework that defines the Agency's supervision over the work of water companies, and in the final determination of their income, and thus the price of public water supply and municipal wastewater management services for the following year. The main goal in the first years of regulation is not to determine prices that would absolutely reflect the economic price in optimal business conditions, because previous analyzes have established that we are far from such business conditions and the level of services provided. Therefore, in the coming period, a long and arduous process of reform of the sector awaits us, which will gradually lead to rationalization and a higher degree of efficiency in the operation of water companies. The goal is to increase their efficiency through the rationalization of costs and the adaptation of management methods to the given circumstances", RAE stated.
Pljevlja, Rožaje, Kotor and Tivat cover part of the costs of water companies
The RAE found that some municipal companies operated at a loss, part of which was covered by the municipality through subsidies from the budget. After analyzing the documentation, they asked the municipalities if they could finance part of the costs of those companies from their budgets in 2021, taking into account the corona crisis, which would have a positive effect on the final prices for citizens and companies.
"The Municipality of Pljevlja responded that they plan to cover part of the costs of the Pljevlja Water and Wastewater Treatment Plant in 2021 of 250.000 euros, the Rožaje Municipality will cover 35.000 euros for the Rožaje Water and Wastewater Treatment Plant, the municipalities of Tivat and Kotor plan to cover the entire cost of municipal wastewater treatment, and Tivat from 237.080 euros , and Kotor from 355.620 euros. In addition, the Municipality of Kotor will provide money to finance part of the costs of water procurement from the Regional Waterworks in the amount of 480.000 euros", RAE said.
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