Regulatory authority

State of compliance

Since the alignment of Serbian legislation with the Third Energy Package in 2014, the organisation of AERS complies with the independence criteria stipulated by Directives 2009/72/EC and 2009/73/EC except that the management does not have full autonomy in designing the authority’s internal management which requires approval by Parliament. AERS is headed by a council consisting of a President and four members with a term of five to seven years, all renewable once. A rotation scheme is in place. AERS ensures accountability of its activities by presenting its annual report to the Parliament. The right to impose penalties is not with the regulator but is transferred to a competent court. While this is in line with Energy Community law, it weakens the ability of AERS to ensure enforcement effectively.

In praxis, regulatory independence the exclusion of the regulator from the Law on the Maximal Number of Employees in the Public Sector that required approval of additional staff by the National Assembly Committee for Administrative and Budgetary Affairs abolished long-lasting budgetary uncertainty and de facto lack of autonomy in setting staff salaries. , the employment. Still, the appointment of new employees is indirectly subject to parliament’s approval of the regulator’s annual budget.   

The performance of AERS is beyond doubt when it comes to technical aspects of market regulation. On regional level, AERS can look back on a stable history of active engagement in ECRB. Since 2015, however, AERS struggles to enforce unbundling of the incumbents Srbijagas, EMS and Yugorosgaz. Several positive certification decisions issued by the regulator despite clear non-compliance with the rules affect the regulator’s performance. The withdrawal of the certification of Yugorosgaz is a positive signal but leaves the company operating without a valid licence. In the gas sector, AERS fails to enforce third party access at the interconnection with Hungary. The exemption decision for Gastrans ignored key elements of the Secretariat’s Opinion and leads to a situation where this section of the TurkStream II pipeline is operated in contravention of the acquis. AERS envisages to include the electricity Network Code Regulations into national rules even without formal transposition of these rules that would allow for enforcement by AERS.