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SOUTH EAST EUROPE ENERGY REGULATORS JOIN EFFORTS IN MARKET LIBERALIZATION

08.04.2016

The role of energy regulators in market liberalization process and phasing out regulated prices for end consumers were the two key topics at the working meeting of regulatory authorities representatives participating in the International Conference "Regulatory Framework Harmonization in South Eastern Europe". The forum was organized by the Energy and Water Regulatory Commission together with the Energy Management Institute. Opening the round table discussion, EWRC member Mrs. Svetla Todorova stressed the main task of regulators to ensure reliable and secure energy supply to consumers in the transition from regulated to free market, taking into account the balance of interests of all market participants. As main challenges to market coupling she pointed out the insufficient knowledge on other countries legal regulatory framework and the role of political solutions in regulatory policy related to the changing priorities of the different countries as a result of national specificities and new priorities at EU level towards diversification of energy sources.

The need of legal framework reliability and active cooperation of national regulators in the specific application of European regulations were the intervention focus of Nina Grall, Head of the Energy Community Regulatory Board Section, Energy Community Secretariat. Representatives of regulators from Greece, Italy and Hungary also shared national regulatory experience in market liberalization process and expressed their common opinion on the necessity of more active cooperation between all countries in the region.

Opening the second panel discussion - phasing out regulated prices for end consumers - Bulgarian regulators member Mrs. Svetla Todorova stressed that such prices currently exist in half of the EU member states, but there is a tendency for their gradual elimination. In this respect, according to her, the role of regulators is significant, but at the same time the removal of regulated prices is not just a regulatory matter. In most EU countries, including Bulgaria, the existence of low voltage end-users regulated prices is enshrined in national legislation. Experience shows that there are different schemes for phasing out regulated prices, Svetla Todorova noted. One approach is to force large users, above certain consumption level, to enter the open market and another possibility is to increase gradually over time the open market share in the prices of end users. Romanian experience in the phasing out of regulated electricity and natural gas end users prices was presented by Mrs. Lusine Caracasian from the energy regulator of Romania. In line with the drafted in Romania roadmap, full gas market liberalization in the country completed in 2015 and by end 2017 that is about to happen in electricity market too, she said. The advantages of this approach are that each user has clarity on the process in advance and is familiar with the exact details of each stage. Under the requirements introduced by the regulator, all consumers bills have been simplified, which contributes to informing consumers, reduce energy suppliers financial risk and minimize the wholesale market risk.

An especially important matter is for the energy system not to fill in the social system gaps, said during the discussion Mrs. Nina Grall from the Energy Community Secretariat. According to her, regulated prices burden should not fall onto regulators, since in most countries that issue is stipulated in the legislation as a result of political decisions.

Special attention during the discussion was devoted to the approaches on vulnerable consumers protection in different countries. Participants shared information on the mechanisms for determining the number of those users, protection criteria and measures.

National regulators independence should find adequate expression in terms of financial resources for their activities implementation, was the common opinion of all participants in the working meeting. In most countries the regulators themselves prepare their budgets based on income from their activities and thereafter approved by national parliaments.

At the end of the meeting EWRC chairman Assoc. Prof. Ivan Ivanov expressed the Bulgarian regulator members satisfaction with the results of the two-day organized Conference. He stressed the similarity of the tasks regulators face and expressed confidence that this is a prerequisite for joint efforts and close cooperation and interaction between them on the basis of European legislation in order to achieve market liberalization common objectives.



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