KOSOVO: WEATHER AND TECHNICAL PROBLEMS CAUSE POWER OUTAGES

UNCLAS SECTION 01 OF 03 PRISTINA 000465 SIPDIS SENSITIVE DEPT FOR EUR/SCE, EUR/PGI, INL, DRL, PRM, USAID E.O. 12958: N/A TAGS: ECON ENRG PGOV KV SR SUBJECT: KOSOVO: WEATHER AND TECHNICAL PROBLEMS CAUSE POWER OUTAGES IN NORTHERN KOSOVO PRISTINA 00000465 001.4 OF 003 SENSITIVE BUT UNCLASSIFIED - PLEASE PROTECT ACCORDINGLY. ¶1. (SBU) SUMMARY: On October 18, increased demand for electricity due to unseasonably cold weather and technical problems threatened to cause catastrophic failure to the Valac electrical sub-station and distribution lines in northern Kosovo. This prompted the Kosovo Electricity Company (KEK) to cut power on the one operable 110KV line to the north. (Note: Two other lines are down for scheduled maintenance. End Note) Power remains off because employees of the Serbian electric utility EPS, which operates KEK's Valac sub-station in northern Kosovo into which the three 100KV lines feed, refused a KEK request manage the situation responsibly. Serbia has stepped in on "humanitarian grounds" and is now supplying some electricity through a power line running from Novi Pazar. However, the Serbian power supply is inconsistent and not able to meet demand. While KEK works to restore the main power supply lines to the north, it has also reiterated to Belgrade officials its interest in establishing a sub-contractor relationship with a subsidiary of the EPS as part of its effort to regularize payment for the electricity KEK supplies to the north. Though the current shut down is unconnected with these efforts, many Serbs north of the Ibar assume otherwise. Reaction has, thus far, been peaceful, and developments have begun to expose Serbia's inability to provide 24/7 power to the north despite what many northern Kosovo Serbs assumed and some parallel officials had claimed was possible. Interestingly, we understand that some officials in Belgrade have told parallel structures that they expect northern Kosovo Serbs to pay for the limited power they are receiving via Novi Pazar. We will query KEK about when it can safely resume transmission to the north along the one operable 110KV line. We understand, but will confirm, that the scheduled maintenance on the two down lines will be completed on or about October 25. END SUMMARY THE BEST LAID PLANS -------------- ¶2. (SBU) Over the last eight months the Kosovo Electricity Company (KEK) has been implementing a three-phased plan to regularize non-paying electricity customers from Serb-majority areas throughout Kosovo. KEK completed phase one, smaller Serb communities south of the Ibar River, and phase two, Grancanica and Strpce, in August ¶2009. Since then KEK has been preparing to implement the third and final phase of the plan: regularizing customers from Kosovo's three northern municipalities, including north Mitrovica. KEK had been coordinating closely with KFOR, UNMIK, ICO, OSCE and others, but had not yet taken a decision to cutoff power to the northern Kosovo. KEK had also made several approaches to the Serbian Ministry of Energy to discuss using a Serbia-based, but Kosovo-registered energy services company (ESCO) to collect payment for electricity in the north, but following U.S. advice to proceed cautiously had been told as recently as October 6 that this was not politically possible. UNSEASONABLY COLD WEATHER CAUSES POWER SPIKE -------------- ¶3. (SBU) The early arrival of unusually cold weather over the October 17-18 weekend caused a spike in demand in northern Kosovo just as two out of three 110KV lines carrying power to the north were undergoing scheduled maintenance. On the morning of Sunday, October 18, demand in northern Kosovo soared over 60 MW, at one point reaching a peak of 65 MW, beyond what the line was capable of safely providing. (Note: During the entire winter season of 2008-09, the maximum peak load in the north on a single day was approximately 60 MW. End note) Technical weaknesses already present in the distribution system combined with the extreme demand on the single remaining operating line risked physical line failure and/or transformer burn-out, which would keep the power off for several months. According to KEK, if allowed to continue, the level of demand would have caused transformers and capacitors to burn out and the power lines to melt. AVOIDING CATASTROPHIC FAILURE PRISTINA 00000465 002.4 OF 003 -------------- ¶4. (SBU) In order to prevent catastrophic failure, KEK Managing Director (MD) Arben Gjukaj issued urgent instructions to implement load shedding, also known as rolling blackouts, at 1250 on October 18 to the operators of the key northern sub-station at Valac. When the Valac sub-station operators, who are EPS employees paid by KEK, failed to implement load shedding, Gjukaj instructed dispatchers at 1330 to disconnect the line in order to prevent a catastrophic system failure that, KEK argued, would have disrupted distribution throughout the country. Power was turned off north of the Ibar River for several hours. It was restored later in the day by the managing director of KOSTT, the Kosovo transmission system operator, despite the significant risk of system failure. ¶5. (SBU) On Monday, October 19, Gjukaj met with five representatives of the Serbian power generation and transmission companies EPS and EMS -- N. Aleksic, R. Kreckovic, B. Novakovic, B. Kovacevic, and T. Radosavlevic -- in north Mitrovica seeking an explanation of their failure to execute load shedding instructions; no explanation was provided. On Monday afternoon demand in northern Kosovo again spiked to more than 60 MW, which forced Gjukaj to repeat his instruction to disconnect the line. As of this writing, the single operable 110KV line remains disconnected and northern Kosovo is not being supplied with power by KEK. SERBIA STEPS IN -------------- ¶6. (SBU) On Tuesday, October 20, some areas north of the Ibar were being supplied with electricity by EPS through a 110KV line from Novi Pazar, Serbia, and from the Ujmani hydropower plant located at the Gazivoda Lake in Zubin Potok Municipality. Sources in the international community (IC) based in Mitrovica noted to us that Belgrade has highlighted that the 20MW currently provided by EPS is humanitarian supply, geared to meet the most basic needs of hospitals and schools. The Novi Pazar line is normally used for balancing the distribution systems and is not suited to supply sustained demand. The combination of this line and the Ujmani HPP is a temporary measure at best, and can only meet about 30-40% of the electricity normally consumed in the north. EPS DISCONNECTS NON-SERBS -------------- ¶7. (SBU) On October 20, in an effort to reduce the strain on the Novi Pazar line, EPS employees began selectively disconnecting Albanian neighborhoods north of the Ibar. The Albanian-majority village of Suvi Do/Suhadoll was cut off from restored electricity supply on October 20, when EPS employees came to the village and removed fuses from the neighborhood sub-station, stating they needed to reduce power consumption. Later the same day, about 20 Kosovo Albanian Suvi Do residents blocked the main road with rocks to protest their disconnection from the Novi Pazar supply. The protest ended following a discussion with Kosovo Police. Though power has been restored to Suvi Do, three majority ethnic-Albanian villages in Zvecan are also without electricity after EPS disconnected the area power line from the Trepca North sub-station. ROLLING BLACKOUTS, SECURITY SITUATION CALM -------------- ¶8. (SBU) As of noon on October 21 the Novi Pazar line is carrying about 25MW of electricity, roughly its maximum capability. The Ujmani HPP was shut down around 2300 on October 20 and remains off line. Ujmani operators are aware that continuous operation under current conditions can risk severe damage to the equipment, and they are communicating with KEK to ensure KEK's assistance getting the plant back on line if and when KEK needs the plant to operate. Several areas in the north are now heavily load shed by EPS, and it is apparent that most of the energy being delivered from Serbia via Novi Pazar is going to Mitrovica, which itself had power cut from around 0100 to 0600 on October 21. A KFOR source visiting Novo PRISTINA 00000465 003.4 OF 003 Selo, where KFOR's Multi-National Task Force-North (MNTF-N) is based, told us that in spite of rolling blackouts the situation in MNTF-N's area of responsibility was stable and no significant security incidents had been reported. MESSAGE FROM SERBIA TO THE NORTH: EVERYBODY PAYS -------------- --- ¶9. (SBU) Since the citizens of Strpce agreed to payments for electricity in August, northern Kosovo has been anticipating that they too will be called on to pay for this basic service, a message that has been conveyed by the Serbian Ministry for Kosovo. Goran Bogdanovic, Belgrade's Minister for Kosovo and Metohija, stated publically during the regularization of payments in the south earlier in the year that the north too must pay for electricity. As recently as this week, Bogdanovic touted his track record of pragmatic intervention on this issue in the Belgrade daily "Politika." On October 21, Serbian-language media outlets available in Kosovo, like the internet edition of RTV B92, reported comments from parallel structure leaders in the north that all customers need to pay for electricity. ¶10. (SBU) On October 22, both local media reported that Serbian Minister for Kosovo Bogdanovic met with representatives of EPS and "Elektrokosmet", a Serbian public utility, on October 21 to discuss the current lack of electricity to northern Kosovo. According to media reports, Bogdanovic and company agreed that northern Kosovo residents should pay their electricity bills directly to EPS starting from November 1, 2009, and that Elektrokosmet would begin registering consumers in the north and installing electricity meters. The meeting was also attended by the parallel mayors of the northern municipalities. According to laws and regulations adopted by UNMIK and still in force, KEK is the sole licensed distribution system operator and public supplier of electricity within Kosovo. No other entity is licensed to perform these activities. In other words, Bogandovic's proposal is illegal. The only legal way a Serbian-based entity could collect electricity bills in Kosovo would be as KEK's registered agent. COMMENT -------------- ¶11. (SBU) As the weather improves this week and into the weekend and demand presumably lessens, we will query KEK about when it can safely resume transmission to the north along the one operable 100KV line. We will also confirm KEK plans to complete maintenance on the two down lines on or about October 25. That said, the current situation, provides some valuable insights for the bill collection effort in the north, which we should keep in mind when we decide to tackle the issue. To begin with, many Serbs have assumed, incorrectly, that the shut off is the opening salvo in the bill collection effort, yet the political reaction from Serbs has been relatively muted. Parallel structures and some Belgrade officials have, not surprisingly, talked about a "humanitarian crisis", but without the ardor some would have predicted, and there has been no violence. When KEK moves on bill collection we should anticipate greater efforts to spin the story as a humanitarian issues rather than a commercial question. Second, the shut off has tangibly exposed the inability of Serbia and the north's parallel structures to provide 24/7 power to the north. Third, if accurate, it is telling Belgrade and EPS have discussed with parallel structures the need for Serbs to pay for even the limited power they are now receiving from the Novi Pazar line. This is a useful precedent for underlining the commercial nature of the problem. Finally, the episode underscores the importance of KEK control of the Valac sub-station, currently controlled by EPS employees, whose refusal to load shed contributed directly to the power cut off. DELL