Slovakia to give more powers to utility regulator

The government will prepare a bill that will allow the Office for Regulation of Network Industries, which oversees utilities, to disregard some costs claimed by gas and power distributors. This should allow prices to fall, Fico said yesterday after a cabinet meeting in Betliar, Slovakia. The proposed measure is part of the socialist government's effort to meet its campaign promises to increase state influence in the economy and raise living standards for the poor. Fico's comments came less then a week after the regulator allowed Slovensky Plynarensky Priemysel AS, the dominant gas utility, to raise prices for households by 4.3% from November. „We will prepare a new bill on regulation as quickly as possible because we don't agree with rising energy prices,” Fico said at a press conference.

„The regulator will have more powers to control costs.” Fico also said that limiting the increase in energy prices will help Slovakia to tame inflation, which at 5.1% in August is the second-highest in the European Union. The November increase in gas prices will boost monthly price growth by about 0.2 percentage point, according to an estimate by Vseobecna Uverova Banka AS, Slovakia's largest bank. Slovensky, which is 49% owned by E.ON Ruhrgas AG and Gaz de France, originally requested a 15% increase in gas prices from October, citing higher costs of natural gas. The regulator has yet to decide on demands by Slovakia's three regional power distributors to raise prices by around 13% from January. (Bloomberg)