The Presidency of Kosovo has strongly opposed the proposed increase in electricity prices, emphasizing its potential adverse effects on citizens and the economy. The Presidency has warned that after a 15% increase, Kosovo would have one of the highest electricity costs, not just in the region, but beyond. This increase would heavily impact citizens due to the low average income compared to other European countries.
In its statement, the Presidency stressed that price hikes should not be the first and only option for addressing financial challenges. Instead, a more balanced and sustainable solution must be prioritized to avoid a new wave of inflation and protect the citizens and economy of Kosovo.
Proposed Measures to Prevent Electricity Price Increase:
- Immediate Measures:
- Efficient Management of Expenses and Losses: The Presidency suggests that there is room to balance the allowed revenues for KEDS (Kosovo Energy Distribution Services) while reducing losses to the level of last year’s losses (€65.37 million). This is especially relevant considering the lack of significant increases in import prices for 2025.
- Energy Subsidies: The Presidency proposes that the Regulatory Authority for Energy (ZRRE) engage in dialogue with the Government to explore the possibility of subsidizing electricity costs, particularly for the most vulnerable consumers. This was practiced in 2022, when a subsidy was incorporated into the final tariff calculation.
- Unpaid Bills in Northern Municipalities: Since a significant portion of commercial losses is due to unpaid bills in the four northern municipalities, the Presidency encourages ZRRE, in cooperation with relevant institutions, to identify additional measures to ensure consumers fulfill their obligations.
- Removal or Temporary Reduction of VAT on Electricity: The Presidency proposes a removal or reduction of VAT on electricity, a measure already implemented in several European countries. This would help mitigate the impact of the price hike on citizens.
- Introduction of Payment Deferral Programs: Some countries have implemented measures allowing consumers to pay electricity bills in installments. This proposal aims to ease the financial burden on families and businesses coping with rising energy costs.
- Medium-Term Measures:
- Efficient Management of KEK and Energy Resource Planning: The Presidency recommends better management of the Kosovo Energy Corporation (KEK) and optimizing energy resources to reduce production costs and losses.
- Improving Energy Supply Efficiency: Increasing the capacity of the energy distribution network to reduce technical losses and costs, thereby avoiding the need for price increases.
- Continued Energy Efficiency Programs for Consumers: The Presidency advocates for ongoing programs to improve energy efficiency, such as promoting the use of energy-efficient devices, better building insulation, and the use of alternative energy sources.
- Long-Term Measures:
- Construction of New Energy Generation Capacities: A significant step toward ensuring energy security in Kosovo is the construction of new power generation capacities. Investing in new energy projects will help diversify and secure energy supplies, reducing dependence on existing resources.
- Cross-Border Energy Trade Agreements: Kosovo can benefit from cross-border energy trade, which would allow importing or exporting energy during peak demand periods. This could help stabilize prices by taking advantage of lower prices in international markets. Kosovo already has such agreements with Albania and could explore similar agreements with other neighboring countries.
The Presidency urges ZRRE to seriously consider these proposals and consult with citizens and consumer protection organizations before making a final decision.
