State of compliance
The State Electricity Regulatory Commission (SERC) is the only regulatory authority of the Contracting Parties whose legal set-up does not comply with the requirements of Article 35(1) of Directive 2009/72/EC and Article 39(1) of Directive 2009/73/EC for a single regulatory authority for electricity and gas at national level. SERC is exclusively in charge of electricity transmission on state level only but does not have any jurisdiction over the gas sector. The legislator has so far not taken measures to remedy the related breach of the Energy Community acquis although being tasked accordingly by Ministerial Council Decisions of 2013, 2014 and 2015 as a result of an infringement action of the Secretariat (Case ECS 06/16).
Besides the lack of nationwide competences for gas and the entire electricity sector, SERC’s independence as stipulated by Directives 2009/72/EC and 2009/73/EC would be better addressed by introducing an independent Selection Committee instead of the currently strong political involvement in the selection procedure. Effectiveness of SERC is further undermined by the need for unanimous decision-making of the three commissioners which is able to effectively block the execution of its duties.
SERC is headed by three commissioners. Their term is limited to a period of five years, renewable once, and a rotation scheme is in place as required by the Third Energy Package. The management has autonomy in defining its annual work programme as well as in setting up and managing its annual budget. SERC’s management is also autonomous in relation to staff appointment and organisation of its internal structure. The rules in place are flexible enough to ensure that salary levels are comparable with the public sector for SERC commissioners and with salary levels of the regulated sector for SERC staff. SERC is held accountable for its activities by having to present its annual report to the Parliament and the Ministry.
SERC has been proactive in performing its duties. This has to be particularly acknowledged given the serious lack of competence. The establishment of a front-running electricity balancing model is a case in point. In addition, the regulator showed flexibility to allow for participation of the electricity system operator NOSBiH in regionally coordinated capacity allocation by SEE CAO by addressing VAT related constraints in the network fee. Particular emphasis should also be given to SERC’s long-standing active contributions to regulatory work on regional level via the Energy Community Regulatory Board.