Regulatory Office for Network Industries
The Regulatory Office for Network Industries (hereinafter only as "the Office") holds a special position within the structure of the state administration bodies. It has an unpopular role of being an arbiter of two mutually contrary interests in network industries, and thus energy producers and suppliers on one side and consumers on the other side, out of which, of course, each has its own idea about the final prices.
In this connection, there often appears the notion of "fair price". As far as a seller is concerned, a fair price is probably the price he has to offer so that it would bring him adequate profit. Fair price, from the consumer´s point of view, is related to a certain general idea on financial affordability of a commodity connected with its real value, with the previous experience and a supplementary item.
Both sides are trying to gain maximum profit from the mutual exchange. The sellers want to reach higher profits than costs, while the purchasers are interested in gaining higher level of satisfaction from commodities or services.
The role of the Regulatory Office is, within the fields with no competition, to create environment related to competition for monopolies, i.e. producers and suppliers of electricity, gas, heat and water. However, it has to follow protection of both consumers´ and investors´ interests. It is common thing that an investor would not conduct business in this field if there were not any profit. The Office has to create such a climate so that the investor would have good conditions for investments, but, on the other side, so that a consumer would not be negatively affected, or in other words, so that the prices would be fair for both parties.
To achieve this goal, the Office forms relevant legislation which has to reflect the market and the changes emerged. The European legislation has been recently implemented into the amendments of a couple of Acts, and thus the way as being standard in other countries. The legal and practical steps have been consulted by the Office with the European Commission representatives and, after its statements and justification being submitted, the EC expressed no objections.
Scope of competence of the Office
The scope of the competence of the Office is defined in detail within Section 5 of the Act No. 276/2001 Coll. on Regulation in Network Industries and on amendments to certain acts (hereinafter only as "Act on Regulation").
What is the subject of regulation
The subject of regulation is under this Act and under special regulations:
- determination or approval of the method, procedures and conditions for
- connection and access to the transmission system, distribution system, transport network and distribution network under special regulation,
- transmission of electricity and distribution of electricity in a delineated territory,
- transport of gas and distribution of gas in a delineated territory,
- provision of ancillary services in electricity and gas sectors,
- provision of services of a transmission system operator, a distribution system operator and system operation,
- access and connection of new electricity and gas generating companies to the system or network, generation and distribution of heat,
- access to underground gas storage facilities and storage of gas.
- The subject of regulation hereunder is further the regulation of the price of goods and the price of services provided in network industries and determination of the conditions of their application (hereinafter only as "Price regulation").
- The subject of regulation hereunder is also determination of the method, procedure and conditions for
- operation of the system and network,
- supply of electricity and supply of gas,
- generation, transmission and distribution of electricity generated from renewable sources of energy, electricity generated by combined generation of electricity and heat, and electricity generated from domestic coal,
- performing of activities for organizing short-trrm electricity market.
Price regulation
Although the Office fulfills many roles, the most visible activity is the price regulation in network industries.
The price regulation includes generation of electricity from renewable sources of energy, generation of electricity generated by combined generation of electricity and heat, generation of electricity from domestic coal, connection to the network, access to the network, transmission and distribution of electricity, electricity supply for households, provision of system services in electricity sector and provision of ancillary services in electricity sector.
According to the Act on regulation, the regulated activities in gas sector include connection and access to the network, transport and distribution of gas, gas storage, gas supply for households , gas supply for production of heat used for households and provision of ancillary services. As of 1st May 2010, the regulation of the Office covers also supply of gas by a supplier of last resort. Production of gas and accumulation of gas has not been the subject of regulation of the Office so far.
In heat sector, the price regulation covers generation, distribution and supply of heat.
In water services sector, the Office regulates production, distribution and supply of drinking water through a public water system, discharge and treatment of waste water through a public sewage system and water management services related to water stream management and river basins management.
The Office is aware of the importance of its decisions in connection with economy of the Slovak Republic and the life standard of its citizens. The social situation of a number of consumers has reached the limits of affordability and therefore, the Office shall further control fulfillment of competition rules, abuse of dominant position on the market with goods and related services, and shall take any disciplinary actions in case of breach of the law so that it would fulfill one of its most essential roles, and thus the protection of consumers´ rights with an emphasis on the most vulnerable customers - households.
