WATER SERVICES

SETTING PRICES OF WATER SERVICES

With the new Law on Setting Prices of Water Services and Amendments of the Energy Law, the Energy Regulatory Commission was entitled with new competences in the field of regulating prices of water services, i.e. setting up tariffs for the bulk water supply and drinking water supply, collection and disposal of urban wastewaters, as well as purification of wastewaters.

Until now, these tariffs, i.e. prices, were determined by the Public Utility Companies and the Mayors of the Municipalities, with approval by the Municipality Councils. The experiences have shown that this process has not always been efficient. Very often the proposed price range was not approved by the Municipality Council in the required time frame, and additionally the practice has shown that the existing tariffs are not covering the costs of the water service providers, especially those costs regarding collection and treatment of the wastewaters. Furthermore, the “Polluter Pays” rule has never been applied.

Therefore, the main goal of this reform is to establish an efficient system of setting prices of water services and the Energy Regulatory Commission, as the first and most experienced regulatory body in the Republic of Macedonia, will lead this process.

Necessary prerequisite to obtain a quality service is to have prices that will reflect the justified costs of the Public Utility Companies activities, in order to enable quality and sustainable usage of the water infrastructure, but at the same time it is very important to have in mind that the water services are financially affordable for the population. Therefore, Energy Regulatory Commission will work in a direction to provide a quality service in a reasonable timing with the lowest possible costs.

The Public Utility Companies, as providers of water services, are natural monopolies and the Energy Regulatory Commission, as an independent institution in accordance with the Energy Law, will act as a corrective to their performance. Regulation of the water service prices will enable water service providers to improve planning of their costs, to increase their efficiency and through appropriate investments to improve the quality of their services.

This reform will be beneficial to all, the Public Utility Companies, the entire population and other users, and it will have a positive impact for improved environmental protection.