Regulation in electro-energy sector

The Regulatory Office for Network Industries (RONI) performs several types of regulations. In addition to the audit of the assets in distribution companies, which revealed several shortcomings, the audit aim was to verify the procedure by RONI in setting electricity prices in relation to household customers with emphasis on applicable regulatory policy, as well as the process of price regulation and control of regulated entities.

The SAO SR placed special emphasis on reviewing the RONI procedure, which led to price increase for some electricity customers in 2017 and the subsequent return to these prices to the 2016 level. Part of the pricing process is the process of objectifying the value of regulated entities. Expenditures for expert opinions and analyses were not proven and since the results of the expert examination were handed over to RONI only after the contractually agreed date, they could not be reflected in the general value of the property and thus in the pricing process. The result of the pricing process was an increase in electricity prices, which provoked a number of negative reactions.

Based on the audit results, the SAO SR states that in key proceedings and decisions by RONI, there were several violations of the Act on Budgetary Rules, the Act on Public Procurement, as well as the Act on Financial Control. Therefore, the SAO SR President passed the audit report for further proceedings not only to the Public Procurement Office, but also to the organs active in criminal proceedings. Based on the evaluation of the plan and activities by RONI internal audit, the SAO SR stated reserves in its efficiency and effectiveness. The problem of the internal control environment was insufficient provision of risk management within financial management.

The full text of the press release about this topic in Slovak language is available here. Use the Google icon in the top bar for automatic translation into the desired language.