Focus on Energy, 2010 - Karanovic & Nikolic

Focus on Energy, 2010 - Karanovic & Nikolic Focus on Energy, 2010 - Karanovic & Nikolic

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FINANCING THE ENERGY COMMUNITY8The functioning of the Energy Community is financed throughcontributions of the parties as set out by the Treaty (of whichmore than 98% of the monetary contributions originate fromthe EU as a whole). The level of contributions may be reviewedevery five years at the request of any party to the Treaty. TheDirector of the Secretariat implements the budget in accordancewith the procedural acts that regulate the budget and reports tothe Ministerial Council on the execution of the budget on an annualbasis. The Secretariat is also responsible for making sure thatall contributions are correctly spent and accounted for.The total budget for 2009was EUR 2,996,942. Accordingto preliminary financialreports some 90% to 95% ofthe budget was utilized forthe financing of the operationsof the Treaty.FOCUS ON ENERGYTo date, funding of the Energy Community institutions and itsactivities have been covered predominantly by the EU throughthe Community Assistance for Reconstruction, Development and Stabilisation funds (the “CARDS”)and later through the Instrument for Pre-Accession Assistance programme (the “IPA”) which replacedCARDS in 2007. The Austrian government gave a significant contribution by financing the interim EnergyCommunity Secretariat which was established as a non-profit organisation under the Austrian laws untilthe second half of 2007 when it finally became an international organization and a constituent body ofthe Energy Community.ROAD MAPSAs explained above in more detail, the Treaty provided the adhering parties with onerous targets. In orderto meet these targets to fulfil all legally binding obligations, the Energy Community has developeda series of road maps (the “Road Maps”).The Road Maps are structured to break down the compliance requirements into six separate chapterswhich are then further divided on more specified policy requirements:ketdesign market rules, licensing).The first chapter is the adaptation and implementation of the respective acquis communnautaire and itis the starting point for the compliance process. This chapter refers to the national legislation indicating

egulations and articles transposing the relevant acquis communnautaire. The chapter “Market structure”addresses market concentration and pursues the separation (unbundling) of system operators. Thethird chapter addresses the wholesale market and the market rules. The chapter entitled “Retail market”deals with retail market opening issues. The customer switching process, payment reform and customerprotection are being addressed as well by this chapter. The fifth chapter covers the issues of cost reflectivetariffs and affordability. Finally, the sixth chapter relates to cross border trade and cross bordertransport. As this chapter brings together measures needed for the establishment of a trans-nationalenergy market in the SEE region, relevant actions have to be agreed upon by regional bodies.In terms of a timeframe, the Road Maps comprise of 5 distinct stages, namely drafting, agreeing, committing,implementing and monitoring.For every single policy issue, the plan defines a required action, a deadline and an institution in chargewith respect to the actual needs and the compliance status of each party.9Pursuant to the Treaty, the Secretariat monitors the effective implementation of the treaty obligationsby each of the parties. It submits yearly progress reports to the Ministerial Council in the form of a “Reporton the Implementation of the acquis communautaire under the Treaty”.The latest Report on the Implementation of the acquis communautaire under the Treaty Establishingthe Energy Community 1 focuses on the main achievements and the outstanding problems regarding theimplementation of the Treaty in 2009. It indicates the key issues that need to be addressed in 2010 andbeyond. The main points of the Report are presented in the following paragraphs along with the nationalenergy strategy adopted by the respective country.FOCUS ON ENERGYBosnia and HerzegovinaAlthough Republika Srpska has adopted the Energy Law 2 and an amended Electricity Law 3 and the Federationof Bosnia and Herzegovina is preparing an Electricity Law 4 as well as a regulation concerningrenewable resources, the overall conclusion of the Secretariat in the Report is that the legal frameworkof both entities needs to be further upgraded.An act on gas has not been enacted yet, but according to the Report if a political agreement is achieved it couldbe developed and implemented relatively quickly. The Report identifies an insufficient administrative capacity;accordingly, the strengthening of human resources should be set as a priority. The European Council (“EC”)Directive concerning measures to safeguard security of natural gas supply 5 and the EC Regulation on conditionsfor access to the natural gas transmission networks 6 have not yet been implemented to a satisfactory level.1 Report on the Implementation of the acquis under the Treaty Establishing the Energy Community reflecting the status as of November 2009 („theReport“).2 The Law on Energy (“Official Gazette of the Republika Spska” No. 49/09 ).3 The Law on Electricity (“Official Gazette of the Republika Spska” Nos. 8/08 and 34/09).4 The Law on Electricity (“Official Gazette of the Federation of Bosnia and Herzegovina” Nos. 41/02, 38/05, 61/09).5 2004/67/EC of 26 April 2004.6 EC Regulation 1775/2005.

egulati<strong>on</strong>s and articles transposing the relevant acquis communnautaire. The chapter “Market structure”addresses market c<strong>on</strong>centrati<strong>on</strong> and pursues the separati<strong>on</strong> (unbundling) of system operators. Thethird chapter addresses the wholesale market and the market rules. The chapter entitled “Retail market”deals with retail market opening issues. The customer switching process, payment reform and customerprotecti<strong>on</strong> are being addressed as well by this chapter. The fifth chapter covers the issues of cost reflectivetariffs and affordability. Finally, the sixth chapter relates to cross border trade and cross bordertransport. As this chapter brings together measures needed for the establishment of a trans-nati<strong>on</strong>alenergy market in the SEE regi<strong>on</strong>, relevant acti<strong>on</strong>s have to be agreed up<strong>on</strong> by regi<strong>on</strong>al bodies.In terms of a timeframe, the Road Maps comprise of 5 distinct stages, namely drafting, agreeing, committing,implementing and m<strong>on</strong>itoring.For every single policy issue, the plan defines a required acti<strong>on</strong>, a deadline and an instituti<strong>on</strong> in chargewith respect to the actual needs and the compliance status of each party.9Pursuant to the Treaty, the Secretariat m<strong>on</strong>itors the effective implementati<strong>on</strong> of the treaty obligati<strong>on</strong>sby each of the parties. It submits yearly progress reports to the Ministerial Council in the form of a “Report<strong>on</strong> the Implementati<strong>on</strong> of the acquis communautaire under the Treaty”.The latest Report <strong>on</strong> the Implementati<strong>on</strong> of the acquis communautaire under the Treaty Establishingthe <strong>Energy</strong> Community 1 focuses <strong>on</strong> the main achievements and the outstanding problems regarding theimplementati<strong>on</strong> of the Treaty in 2009. It indicates the key issues that need to be addressed in <strong>2010</strong> andbey<strong>on</strong>d. The main points of the Report are presented in the following paragraphs al<strong>on</strong>g with the nati<strong>on</strong>alenergy strategy adopted by the respective country.FOCUS ON ENERGYBosnia and HerzegovinaAlthough Republika Srpska has adopted the <strong>Energy</strong> Law 2 and an amended Electricity Law 3 and the Federati<strong>on</strong>of Bosnia and Herzegovina is preparing an Electricity Law 4 as well as a regulati<strong>on</strong> c<strong>on</strong>cerningrenewable resources, the overall c<strong>on</strong>clusi<strong>on</strong> of the Secretariat in the Report is that the legal frameworkof both entities needs to be further upgraded.An act <strong>on</strong> gas has not been enacted yet, but according to the Report if a political agreement is achieved it couldbe developed and implemented relatively quickly. The Report identifies an insufficient administrative capacity;accordingly, the strengthening of human resources should be set as a priority. The European Council (“EC”)Directive c<strong>on</strong>cerning measures to safeguard security of natural gas supply 5 and the EC Regulati<strong>on</strong> <strong>on</strong> c<strong>on</strong>diti<strong>on</strong>sfor access to the natural gas transmissi<strong>on</strong> networks 6 have not yet been implemented to a satisfactory level.1 Report <strong>on</strong> the Implementati<strong>on</strong> of the acquis under the Treaty Establishing the <strong>Energy</strong> Community reflecting the status as of November 2009 („theReport“).2 The Law <strong>on</strong> <strong>Energy</strong> (“Official Gazette of the Republika Spska” No. 49/09 ).3 The Law <strong>on</strong> Electricity (“Official Gazette of the Republika Spska” Nos. 8/08 and 34/09).4 The Law <strong>on</strong> Electricity (“Official Gazette of the Federati<strong>on</strong> of Bosnia and Herzegovina” Nos. 41/02, 38/05, 61/09).5 2004/67/EC of 26 April 2004.6 EC Regulati<strong>on</strong> 1775/2005.

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