Transition Period and Default Supplier

This concept can be defined as a mechanism that provides a default supplier service to customers who do not find a suitable market supplier. The default supplier service is provided at prices that differ from the current regulated tariffs, primarily due to higher-priced deregulated generation. Supply is provided to the default supplier in various ways, with at least a portion, if not all, of the supply provided by the former integrated utility's generators. The regulatory commissions in Bosnia and Herzegovina (BiH) agreed that the Electricity Market Opening process should be based on the Default Supplier Market Opening Concept. This concept can be incorporated into regulation through amendments to the Rules on Obtaining the Status of Eligible Customer and Rules on Tariff Methodology. The regulators can interpret the currently-existing legislation and regulation to enable them to make all necessary changes in regulatory rules to prescribe the Default Supplier Market Opening Concept. Preparatory work to change the Laws to incorporate the Default Supplier (and Supplier of Last Resort) can be initiated and performed in parallel to the regulators amending the Rules on Obtaining the Status of Eligible Customers and Rules on Tariff Methodology. The Default Supplier Market Opening Concept involves several key components, including the elimination of regulated tariffs, the appointment of the default supplier, and the methodology and process to determine the price for the default supplier. The regulators should determine the criteria/methodology for setting the default supplier price, and the default supplier should set up the price that should be checked by the regulator. The regulators should also prescribe the methodology/criteria for the default supplier and the default supplier should calculate the price for regulatory approval. The regulatory commissions agreed on the basic components of the Default Supplier service, including the schedule for elimination of regulated tariffs, determining who to appoint as default supplier, methodology and process to determine the price for default supplier, and appointment of the Supplier of Last Resort. The regulators should finalize agreement on these components for harmonization purposes. The regulators should also inform governments of the Default Supplier Market Opening concept and amend the Rules on Obtaining the Status of Eligible Customers to include Default Supply Service and Supplier of Last Resort Service in full. The Action Plan to implement the Default Supplier and SOLR includes several key steps, including the three regulatory commissions agreeing on the basics with regard to the idea of the Default Supplier Market Opening Concept, informing governments on the Default Supplier Market Opening Concept, changing the Rules on Obtaining the Status of Eligible Customers to include changes with regard to Default Supplier and Supplier of Last Resort in full, and changing the Rules on Tariff Methodology to include the methodology/criteria for the Default Supplier. The regulators and REAP should hold a broad Training for the stakeholders on Market Opening, and the regulators should implement the new concept by December 31, 2011.