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Electricity

Electricity: regulations and the tariff system framework

There was much regulatory activity following approval of the decree of 1 July and its subsequent passing into law to align the organisational and tariff system of the electricity sector with the altered market frame work. A number of consolidated laws resulted (on sales, on distribution/transport, on connection conditions and service quality). 

With the entry into effect of the new tariffs for the distribution of electricity on 1 January 2008, general criteria containing greater clarity and logic were also introduced as regards, specifically, the definition of the components to cover sales and distribution costs (by now to be paid to legally separated subjects), the standardisation of tariffs at a national level (overriding the previous options proposed by the operators), and the progressive adoption of policies to align costs to tariffs (time slots) supported by the progressive increase of electronic metering systems in the network. 

The change to the regulated price structures for the most protected categories (families and small companies) is particularly important and a double payment structure applies:  that paid by the customer, presumably set at a level that will allow for the potential development of the market supply in the sector, and a the lower price, paid by the selling party to cover procurement costs.

In the distribution segment, the equalising mechanisms were thoroughly reviewed to account for the greater complexity and to support the expected flow increase to compensate for the amount determined by the application of a single national tariff instead of the previous options that the operator could use, whose role was to minimise the differences from the restriction of the permitted revenues. The regulatory developments will have to account for changes to distribution costs (and sales costs) which will become independent to ensure proper trading operations as they will now be completely separated from sales. 

A new standardised measuring scheme was introduced that presumably aims at encouraging the incorporation of remote measurement and control technology to the existing metering systems.

New regulations on the quality of electricity services have been introduced along with the reform of the sales and distribution tariffs for protected categories. The consolidated law for the 2008-2011 regulatory period introduces new aspects for the payer regarding the quality of the distribution services which will be supported by a progressive improvement in the registration and reporting of black-outs, and will impose stricter sales quality standards, with the introduction of new types of automatic compensation to customers to take effect from 2009.