Montenegro’s Energy and Regulated Utilities Regulatory Agency (REGAGEN) has proposed cutting the allowed revenue of transmission operator Montenegro Electricity Transmission System (CGES) by about 15% and that of distribution operator Montenegro Electricity Distribution System (CEDIS) by about 7% for 2027-2029. If approved, the proposals could reduce total electricity bills by 5% to 6%.
REGAGEN’s board adopted conclusions setting out the reports and proposed allowed revenues and prices on 2 November 2026. The reports cover the period from 1 January 2027 to 31 December 2029; the regulator has not yet made a final determination.
The documents, operators’ applications and supporting material were published on 2 November. A 15-day public consultation is open until 17 November 2026, and comments could change the final allowed revenues and prices for use of the transmission and distribution systems.
Under the current draft, the transmission item on electricity bills could fall by about 15%, while the distribution item could decline by about 7%. Those changes refer to the respective network charges, rather than to the entire bill, for which the combined reduction could be five to six per cent if the proposals are adopted.
REGAGEN’s proposed cut to CGES’s allowed revenue amounts to 107 million euros over the three-year period. The adjustment reflects revenue the operator received from use of its transmission infrastructure above the amount previously allowed by the regulator.
CGES earned 107 million euros more than its approved revenue from charges for use of transmission lines and the undersea cable to Italy in 2022-2025. Under regulatory rules, that excess is deducted from the charge paid by domestic consumers in the next regulatory period, 2027-2029.
The proposed reduction therefore follows the difference between CGES’s actual income from that infrastructure and the revenue approved for it. The regulator’s draft applies the adjustment through the company’s allowed revenue and, in turn, its transmission charge on domestic customers’ bills.
Distribution charges and the final bill
For CEDIS, REGAGEN has proposed reducing some amounts for investment and the purchase of new smart meters. The proposed changes concern costs in the company’s investment plan that were due to be financed through a charge on consumer bills.
CEDIS could appeal the reduction in the investment costs included in the draft. The regulator’s public consultation is also a stage in the process before it determines the final permitted revenues and prices for both operators.
REGAGEN said submissions made during the consultation, including objections, proposals and suggestions, may change the final figures. It said it could provide “answers on the final price for consumers only after the procedure ends.”
The regulator also said that “any price estimate” before the procedure concludes would conflict with its legal obligation to determine allowed revenue within the prescribed period. The final network charges and their impact on bills therefore remain subject to the consultation and the regulator’s subsequent decision.
The network proposals do not determine the full electricity bill. EPCG, which accounts for about half of electricity bills, independently sets the active, or producer-price, component and has not changed it for 17 years.
It is possible that EPCG could raise its component by the amount of the proposed reductions in CGES and CEDIS charges, which would leave the final price formally unchanged. No decision by EPCG to make such a change is included in the proposals.
Electricity is currently the cheapest heating energy compared with mazut, wood and pellets, a factor linked to record household consumption. The potential reduction in network charges would therefore apply against a broader bill in which the producer-price component is set separately by EPCG.
CGES earnings and investment concerns
CGES has said that lower allowed revenue from 2027 would significantly reduce its revenue and profit and leave it short of money for investment. The company’s concerns relate to the future effect of the regulatory adjustment, which returns earlier excess income to domestic consumers through lower charges.
CGES’s board proposed in June that shareholders receive a dividend of five million euros from the 21 million euros profit earned in 2025. The proposal concerns the distribution of that year’s profit and is separate from the regulator’s draft for 2027-2029.
The company reported net profit of 19.3 million euros in the first nine months of 2026, compared with 16.6 million euros in the same period of the previous year. Its undistributed profit stood at 133.5 million euros at the end of September.
REGAGEN is responsible for determining the allowed revenues of CGES and CEDIS, with the public consultation forming part of the process before those amounts and prices are finalised. The consultation closes on 17 November 2026, after which submissions may still affect the regulator’s final decision.
