• Established in July 2003, 5 Commissioners, currently there are 14 staff members.  The Regulatory Commission consists of 5 members which are nominated by the Government of Republic of Macedonia and appointed by the Parliament of Republic of Macedonia for a five-year period.
• The ERC regulates electricity, natural gas, district heating, oil and oil derivates and geothermal energy sector. The ERC has the following authorities: prescribes conditions for supply of certain energy types; prescribes methodology for establishment of prices, the tariff systems and makes decisions for prices of certain energy types; issues, changes, revokes and monitor the performance of the licenses for performing certain activities in the energy field; prescribes rules for connection of the energy networks; participates in dispute settlement and etc.
• ERC is financed by own funds provided by the payment of fee in the total income of the companies performing energy activity and from the payment of issued licenses. The ERC is not financed from the national budget.

Electricity

JSC “Elektrani na Makedonija” (JSC ELEM), share hold, state owned company holder of the license for performing the energy activity: generation of electricity.
JSC ELEM is regulated electricity producer obligated to provide public service and upon prior approval by the ERC, concludes contracts according to regulated prices and tariffs approved and published by the ERC with:

• The Operator of the electricity system for supply of ancillary services including also the electricity necessary for covering the technical losses that occur during transformation and transmission of electricity up to a level approved by the ERC,
• The Retail electricity supplier for tariff consumers for delivering of power and electricity necessary to cover the entire needs of the tariff consumers to the extent the retail electricity supplier decides not to procure on the market excluding electricity losses in the transmission and distribution network,
• The Distribution system operator for delivering of electricity necessary to cover the technical losses during the transformation and distribution, up to a level approved by the ERC.

The regulated electricity producer for the needs of the supplier with electricity for retail tariff consumers is obliged to provide the following:

• the necessary quantities of electricity from its own generation capacities and if necessary from other generators of electricity and/or traders with electricity,   
• the necessary transmission capacity and regulated services.

The regulated electricity producer can conclude sale agreements or in other manner to execute sale of surplus of power and energy under market conditions, in open transparent and non-discriminatory manner. 

JSC MEPSO, share hold, state owned company, holder of the licenses for performing the following energy activities: transmission of electricity, operation of the power system, operation and organization of the electricity market. JSC MEPSO, the transmission system operator in Republic of Macedonia is owner of the complete equipment for transmission of electricity and keeps the maintenance, planning, expansion and construction of the transmission network, management of the electricity system as well as, organising and management of the electricity market. JSC MEPSO as a market operator is responsible for the efficient functioning of the market, managing the system for electricity sale and purchase pursuant to the market-based principals and for development of the organised market pursuant to the principals for transparency, non-discrimination and competition, provide all services pursuant to the conditions determined in the license, under regulated prices and conditions approved and published by the ERC. 

JSC EVN MAKEDONIJA Skopje (90% by EVN – Austria, 10 % state owned) holder of the licenses for performing the following energy activities: operation of the distribution system and distribution of electricity, generation of electricity, and retail supply of electricity for tariff customers. JSC EVN MAKEDONIJA Skopje as supplier of electricity for the retail tariff consumers buys power and electricity from the regulated electricity producer, traders with electricity and from the distributed generators of electricity, as well as, necessary transmission and distribution capacity and regulated services for the needs of the tariff consumers of electricity connected on the distribution network under regulated prices. The supplier of electricity for retail tariff consumers can obtain power and electricity from other generators and/or traders with electricity only if the market conditions and prices are more favorable then the conditions and prices determined for the regulated electricity producer in a clearly defined, transparent and non-discriminatory manner that will guarantee equal access for all domestic and foreign legal persons. This purchase needs to be approved by the ERC. 

JSC Negotino is electricity producer that is engaged by MEPSO for electricity production, power and ancillary services and as a reserve in the power system. 

The traders with electricity purchase electricity for sale to the eligible consumers, the regulated electricity generator, and the supplier with electricity for retail tariff consumers and have function of trade mediator for sale and purchase of electricity in or out of the country. 

In the Republic of Macedonia there are two types of consumers of electricity such as:

• Tariff consumers, - purchase electricity under prescribed tariff positions for own consumption;
• Eligible consumers, - freely purchase electricity from retailer, independent generator of electricity and from import under own choice.

There are 9 eligible customers of electricity connected to the transmission network from 1^st of January 2008. 

Up to now ERC issued 48 licenses for performing energy activities in the electricity sector, from which 24 are licenses for trade with electricity.

Natural Gas

There are no domestic sources for production of natural gas and the supply of natural gas comes from imports. Gas has been imported from Russia since 1997, via a pipeline (capacity 800 million m3).

Gas is used in the largest percentage by the industrial customers directly connected on to the transmission system and for district heat generation and in smaller percentage by the industrial customers connected on to the distribution system.

Development of the distribution of natural gas is on the very beginning phase, in construction phase. Energy Regulatory Commission during 2008 issued first license for distribution (Kumanovo) and in march 2009 were issued license for natural gas distribution, for operation of the natural gas distribution system and for supplier of tariff customers, connected on the distribution system for “Free technological industrial development zone in Skopje” formed by Government of the Republic of Macedonia

The new CHP (powered by natural gas) will start later in 2010.

Tariffs that are regulated are : transportation, distribution and supply with natural gas to tariff customers directly connected to the transportation system

ERC determine:

• price for transportation and services of the system operator;
• price for supplying the tariff consumers which are connected  on the   system for transport of natural gas;
• selling price for tariff consumers connected  on the system for transport of natural gas ( consist of import price and tax for import, price for transport and services of the natural gas system operator and price for supplying the tariff consumers connected on system for transport of natural gas);
• price for distribution and for the services of the operator of the natural gas system for distribution of natural gas; and
• price for supplying the tariff consumers connected on system for distribution of natural gas. 

Up to now ERC issued 12 licenses for performing energy activities in the sector of natural gas, from which 6 are licenses for trade with natural gas.

•  Harmonization of the energy policy according to the Energy Community Treaty. 
• On 27.02.2009 ERC issued the new “Rulebook on conditions, method and procedures for granting, modification, extension and revocation of licenses for performing energy activities” (“OGRM” no. 31/2009).
• On 29.01.2010 ERC issued Rulebook on the manner, conditions and procedure for disputes resolution between the companies and users of energy activities, as well as the compensation of the costs for resolving the dispute (“OGRM”, no.13/2010); 

Electricity

• The “Rulebook on the conditions for supply with electricity” was issued in December 2009 by ERC (“OGRM” no.162/2009).
• The “Tariff system for electricity” was issued in January 2010 by ERC (“OGRM” no.13/2010).
• The Grid Code for distribution of electricity of AD ELEM – Skopje was approved by the ERC in February 2010 (“OGRM” no.13/2010).
• On 10^th of December 2009, AD MEPSO - Skopje submitted the Electricity Market Code and ERC will approved it in the first half of 2010.

Natural Gas

• The “Grid Code for transmission of natural gas” was approved by ERC in March 2009 (“OGRM” no.161/2009).
• The “Rulebook on the method and conditions for regulating prices for transport, distribution and supply with natural gas, was issued in December 2009 by ERC (“OGRM” no.161/2009).
• The “Methodology for balancing of the Transmission system” was approved by ERC in June 2009 (“OGRM” no.131/2009). 

District heating

• The “Grid Code for distribution of thermal energy for heating” was approved by ERC in March 2009 (“OGRM” no.40/2009).
• The “Rulebook on the method and conditions for regulating prices of thermal energy for heating”, was issued in May 2009 by ERC (“OGRM” no.62/2009).
• The “Tariff system for sale thermal energy for heating” was issued in December 2009 by ERC (“OGRM” no. 151/2009).
• The “Rulebook for supply with thermal energy for heating” was issued in December 2009 by ERC (“OGRM” no. 151/2009). 

Renewable energy