Past Events - 2004 

 Bulletin

Agenda

Participant List

Materials

The Energy Regulators Regional Association (ERRA) first time organized a Workshop of the Tariff/Pricing Committee on RoR versus IBR on February 22, 2004 in Bucharest, Romania. The Workshop was co-hosted by the National Electricity and Heat Regulatory Authority of Romania (ANRE), the National Natural Gas Regulatory Authority of Romania (ANRGN), the Energy Regulators Regional Association (ERRA) and the U.S. National Association of Regulatory Utility Commissioners (NARUC), with funding provided by the U.S. Agency for International Development (USAID). 

The topic of the Rate of Return versus Incentive Based Regulation received high priority by its members during the composition of the ERRA Tariff/Pricing Committee’s Workplan for year 2004. The aim of this workshop was to provide in-depth comparison, pros and contras of these approaches used by the two methods of tariff regulation and serve as a source of information and background material for those countries of the ERRA region that become more comprehensive in energy price regulation and head from monopolistic market toward a competitive market.

Representatives from 15 ERRA Members participated, including Commissioners and senior staff from Albania, Armenia, Bulgaria, Croatia, Estonia, Hungary, Lithuania, Moldova, Mongolia, Poland, Romania, Russian Federation, Slovakia, Turkey, and Ukraine. NARUC (US) representatives included Mr. Mark Beyer, Deputy Chief Economist New Jersey Board of Public Utilities, Chairman Thomas Welch, Maine Public Utilities Commission, and Ms. Sandra Waldstein, Senior Policy Advisor, Vermont Public Service Board. In addition, Dr. Jamshid Heidarian, Senior Energy Advisor, Energy and Infrastructure Division, Bureau for Europe and Eurasia, USAID and Dr. Konstantin Petrov, KEMA Consulting also took part on the workshop.

The Meeting started with the presentation on “Methods of Price Control” presented by the Tariff/Pricing Committee Chair, Commissioner, Florin Gugu (ANRE) introducing different methods of price control (RoR, Performance Based Regulation, Yardstick Regulation and Cap Regulation) in details. This was followed by Mr. Mark Beyer, who delivered his presentation on “Establishment of Revenue Requirement and Other Important Issues”.  Mr. Beyer focused on examples where these types of regulation is used, and gave an overview of Cost-Based and Incentive Regulation, also his presentation included Revenue Requirement, WACC, Return on Equity determination and X-factor.

After the general overview of the regulatory methods, three presentations gave explanatory views on the application methods used by worldwide. Dr. Konstantin Petrov, KEMA Consulting, Germany focused on the Experiences with Incentive Regulation in Europe, mainly methods for price control used in UK, the Netherlands , Norway and Central Eastern Europe. The US Experience of the Cap Regulation in Maine was introduced by Chairman Thomas Welch. Finally, the Romanian Distribution Tariff Methodology was presented by Commissioner Gugu.
After the intense amount of presentations, time was allocated to exchange views and opinions generated by this topic. At the end of the workshop, the participants noted that information received will help to systematize and apply those methods of regulation in practice, which are more applicable dependant on the market development. Additionally, the participants expressed their interest to hold such a workshop next year due to the changes in the regulatory environment and countries with various stages of privatization of the energy sector. Also, the participants wished that speakers to develop a narrative and explanatory paper as well and not only presentation, for an easier way to follow-up after the meetings. 

By Viola Dozsa, ERRA Program Manager

Agenda

Sunday, February 22, 2004

17:30   Meeting Concludes

Participant List

Albania
Electricity Regulatory Authority (ERE)
Tel: (355 42) 69590; Fax: (355 42) 322 45
Mr. Kastriot Sulka, Head of Tariff Department

Materials