Regulatory authority

State of compliance

After the adoption of a new Energy Law transposing the Third Energy Package in 2015, the Energy Regulatory Authority of Montenegro (RAE) ranks among those regulators whose organisation complies with all independence criteria and competences stipulated by Directives 2009/72/EC and 2009/73/EC with the exception of two shortcomings. Firstly, the management is not entirely free to decide on the authority’s internal organisation as its statutes are subject to governmental approval. Secondly, the possible penalty levels are significantly below the required 10% threshold, which represents a breach of the acquis. In addition, the right to impose penalties is not with the regulator but is transferred to a competent court. Whilst in line with Energy Community law, it weakens the ability of RAE to ensure enforcement effectively.  

RAE is headed by a Board consisting of two members and a President and, in addition, has an executive director and a deputy executive director. The term of the President and Board members is limited to a period of five years, renewable once and a rotation scheme is in place. RAE is held accountable for its activities by being obliged to annually present a financial report as well as a report on the situation in the energy sector of Montenegro to Parliament.

RAE continued demonstrating its ability and commitment to use its legal competences and independence. The regulatory rules prove a high degree of market orientation. RAE is an active promoter of regional reforms. In a project with Italy, the regulator showed pro-activity and flexibility to bridge the legal gaps for market coupling with an EU neighbour country. This is even more notable as the independent functioning of RAE was at serious risk during the reporting period: reforms of the administrative sector in Montenegro envisaged ministerial control over RAE. This was prevented by an intervention from the Secretariat. On regional level, RAE participates actively in ECRB, including (deputy-) leadership of two working group.