Regulatory and Energy Assistance Project in Bosnia and Herzegovina (BiH) – REAP BiH

(AEAI), focused on integrating the energy sector into the regional market and the EU. Key activities during the quarter included working with the Market Working Group (MWG) to develop the Data Gathering Table and meeting with all Energy Providers (EPs) to garner support for the group's work. REAP also met with industrial customers and intended to organize an industrial customer organization in the Chamber of Commerce. The creation of a legal and regulatory framework for gas was a priority. REAP met with BH Gas and learned that the company had contracted gas directly with Gazprom, bypassing efforts to work with Serbijagas on behalf of BiH. BH Gas proposed connecting gas supply to Bosanski Brod refineries, which has been an ongoing struggle between BH Gas and the RS. REAP also attended the Energy Community Gas Forum, where the natural gas crisis of January 2009 was discussed, and infrastructure standards were being developed for the N-1 Security of Supply indicator and reverse flows. The transformation of the ISO into a full Market Operator was another key area of focus. REAP made internal efforts to determine the currently-existing processes for transmission measurement, reconciling imbalances, and providing ancillary services. Despite primary and secondary legislation, the EPs continued to balance their own territories and provide ancillary services. REAP discussed the issue of ancillary services with EPRS representatives, who informed REAP that EPRS had filed a complaint in the BiH Court against SERC for non-compliance with procedural rules. The unification of regulators was also a priority. REAP met with RSERC to discuss tariff methodology and activities of the Market Working Group (MWG). REAP agreed to assist RSERC in resolving a two-year-old deadlock on congestion management. In a follow-up meeting with SERC, REAP was told that the proposed solution documentation exceeded SERC's expectations. Additionally, MOFTER called a meeting of sector participants to discuss the implementation of the REAP-prepared Road Map for security of Supply and the Annex to Regulation 1228 on Cross-Boarder Trade. The project's progress was hindered by several challenges, including the RS withholding agreement for the Zenica-Brod pipeline, which has been an ongoing struggle between BH Gas and the RS. BH Gas also proposed meeting with Croatia's Plinacro regarding interconnecting with Plinacro in the Una-Sana Canton. Furthermore, BH Gas is going to London to finalize a loan from EBRD for the Travnik branch line, which has raised concerns about the existence of an adequate market to support the branch line. Overall, REAP BiH continued to work towards integrating the energy sector into the regional market and the EU, despite several challenges and setbacks. The project's progress was hindered by the RS withholding agreement for the Zenica-Brod pipeline, and BH Gas's proposal to meet with Croatia's Plinacro regarding interconnecting with Plinacro in the Una-Sana Canton.