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COSTS OF CONNECTION TO GAS NETWORKS HAVE TO BE PRESENTED ACCURATELY ...

BELGRADE, 16 July – In February 2007, the Energy Agency of Serbia determined and published a Methodology on the criteria for setting connection charges for natural gas transportation and distribution. The Methodology defines those criteria and methods for setting and calculating costs, i.e. costs of equipment, material, works etc., which can be included in connection charges.

Natural gas transportation and distribution companies should be setting connection charges to the gas system according to this Methodology, as of 1 June 2007.

The unit prices of elements that can be included in connection charges are the best market prices available at the time of setting these charges. Besides those direct costs that are incurred by connection of natural gas customers, connection charges can also include part of the costs of natural gas network construction and part of the system costs incurred as a prerequisite for connection, which the Agency has limited to 30% of the cost value of the connection.

The intention of the Agency is to cut out or completely cancel that part of the connection costs intended for gas network construction. The idea is to finance construction from use of system charges.

Natural gas transportation and distribution companies have to make available to all connection applicants, on a transparent and non-discriminatory basis, all the documentation on which connection charges are determined.

However, the Energy Law does not stipulate the more effective influence of the Agency and other state institutions in setting connection charges. Neither the Agency, nor the Government and competent Ministry have authority to give consent to connection charges set by energy entities.

This puts huge responsibility on energy entities that operate networks to be realistic in setting the costs, which is currently not the case, and about which the companies have been warned by the Agency.

Before using some other mechanisms, which would enable the Agency and the competent Ministry to force application of laws and secondary legislation in order to protect the customers, the Agency intends to publish transparently the standard connection costs of all energy entities.


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