USAID Energy Policy Activity Third Quarterly Progress Report

The objectives are to achieve better coordination, management, and transparency at all levels of BiH's regulatory framework, a simplified energy policy environment, and targeted technical assistance to integrate BiH's energy sector into regional and EU markets. The EPA is divided into four components: the Natural Gas Technical Assistance component, the Electricity Technical Assistance component, the Cross-cutting Assistance on EU Accession Requirements in the BiH Energy Sector component, and the Cross-Cutting Assistance and Activities in the Public Outreach component. The Natural Gas Technical Assistance component focuses on creating the preconditions for and development of a BiH natural gas internal market, and its integration into the regional natural gas market. This includes addressing the design and adoption of regulatory and policy reforms, such as the unbundling of gas pipelines, open access regulation, and rules on licensing, tariffs, and customer switching. The Electricity Technical Assistance component aims to enhance the smart grid features of the electricity network by developing a demand side response mechanism, instituting intra-day and day-ahead markets, and assisting newly unbundled electricity utilities, Renewable Energy Sources (RES) producers, and households and small commercial customers to benefit from a fully operational market. The Cross-cutting Assistance on EU Accession Requirements in the BiH Energy Sector component provides communication support and assistance to the BiH Ministry of Foreign Trade and Economic Relations (MOFTER) and relevant entity ministries on project work that impacts compliance with the EnC requirements and obligations of BIH as a signatory of the Energy Treaty. The Cross-Cutting Assistance and Activities in the Public Outreach component assists the BiH regulatory commissions to promote and support a Europe-oriented, market-based energy sector by working with the National Association of Regulatory Utility Commissioners (NARUC) to develop an online platform to improve each commission's capacity, strategy, and tools to conduct public outreach campaigns and educate customers on the benefits of increased competition. During the third quarter of 2020, significant events included the establishment of the Working Group for the Development of the State Electricity and Natural Gas Law, the Working Group for the Development of FBiH Law on Natural Gas, and the Working Group for the Development of FBiH Law on South Natural Gas Interconnection. The USAID EPA also updated the Transmission Tariff Tool, organized online workshops on the Unbundling of the Natural Gas Market in Bosnia and Herzegovina and the Key Elements of Rules on Methodology for Gas Transmission and Distribution/Supply Charges, and established the Cyber Security Sub-Working Group. Additionally, the USAID EPA donated IT equipment to energy ministries and regulatory commissions to mitigate the effects of the COVID-19 pandemic on their work. A high-level meeting was also held with the state and entity energy ministers to discuss MOFTER's initiative to reopen the energy sector.