Case ECS-03/08: Serbia / electricity

summary of the case

status: closed by Ministerial Council Decision / 
complied after Art.92 MC Decision
registered: upon complaint 12.08.2008



KOSTT was licensed in 2006 under legislation promulgated by Kosovo* to operate the transmission system within that Contracting Party. A set of bilateral agreements governing the relationship between KOSTT and EMS inter alia provides for mutual compensation for electricity transits for the purposes of the respective other party to and from third parties. With the application of multilateral Inter-TSO Compensation (ITC) Agreements in 2004, EMS ceased to compensate KOSTT for electricity transits. It does not forward to KOSTT the compensation received under the ITC Agreements. Furthermore, KOSTT does not receive the revenues from allocating transmission capacity on the interconnectors with the countries adjacent to Kosovo*. That allocation is made by EMS.

The Secretariat assessed the situation for compliance with Energy Community law, in particular with Regulation (EC) 1228/2003 on conditions for access to the network for cross-border exchanges in electricity. That Regulation addresses both ITC compensation and interconnection capacity allocation. In the Secretariat’s preliminary assessment, the lack of compensation to KOSTT for costs incurred as a result of electricity transit on the network operated by it violates Article 3 of Regulation (EC) 1228/2003 in cases where the electricity flow originates or ends on EMS’ system.With regard to the revenues resulting from the allocation of interconnection on the interconnectors with countries adjacent to Kosovo*, the Secretariat, in the absence of any information on how EMS uses those revenues, assumes that they are not used for the benefits of either the availability of the allocated capacity, nor investments into the network operated by KOSTT, nor as an income taken into account to reduce the overall level of transmission tariffs on the network operated by KOSTT, as would be required by Article 6 of Regulation (EC) 1228/2003. Under this assumption, the Republic of Serbia fails to comply with Energy Community law in the view of the Secretariat.

On 14 October 2016, the Ministerial Council decided the failure by the Republic of Serbia to comply with its obligation under Article 12 of the Treaty in conjunction with Article 6 (6) of Regulation (EC) 1228/2003 as congestion revenues were not used according to the said provision. With the adoption of Decision 2016/02/MC-EnC, the procedure under Article 91 of the Treaty in Case ECS-3/08 is closed.

On 13 October 2017, the Secretariat initiated Case ECS-3/08S by submitting a Reasoned Request to the Ministerial Council under Article 92 of the Treaty.