BULLETIN

The Energy Regulators Regional Association (ERRA) organized the ERRA Legal Regulation Working Group meeting on October 24-25, 2005 in Kiev, Ukraine. The meeting was co-hosted by the National Electricity Regulatory Commission of Ukraine (NERC), 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).

Representatives from 22 ERRA member organizations participated, namely from Albania, Armenia, Bosnia and Herzegovina, Bulgaria, Croatia, Estonia, Georgia, Hungary, Kazakhstan, Kosovo, Kyrgyz Republic, Latvia, Lithuania, Macedonia, Moldavia, Mongolia, Montenegro, Poland, Romania, Russia, Turkey, Ukraine. In addition 3 US staff persons (from the California Public Utilities Commission, the Missouri Public Service Commission and the National Association of Regulatory Utility Commissioners) and an Austrian regulator attended the meeting.

The two-day meeting focused on the following legal regulation issues: the Status, Functioning and Role of the Regulator, the EU Energy and related Directives, the Bulgarian Case Study on the Court challenges to tariff changes on increased household electricity charges and finally on the series case studies on Disputes Settlings presented by different ERRA member countries. Chairman Valerii Kalchenko (National Electricity Regulatory Commission of Ukraine (NERC) and Commissioner Lyubov Goncharova (National Electricity Regulatory Commission of Ukraine (NERC), Chair of the ERRA Legal Regulation Working Group) opened the meeting on Monday. After the welcoming remarks, Ms. Isabel Bjork from Pierce Atwood presented the latest update on the progress of the Benchmarking Report for CIS regulatory organizations. The working day proceeded with the election of a Vice-Chair of the Legal Regulation Working Group. Based on the results of the democratic open election, Ms. Vilma Adamaviciute, (from the National Control Commission for Prices and Energy (NCC) of Lithuania) has been elected as a new Vice-Chair of the Working Group.

The morning session continued with the traditional updates, each Working Group Member presented news on the recent developments in their country in the field of legal issues. Before breaking for lunch, Working Group members have discussed and classified duties and responsibilities among themselves on the Workplan for 2005-2006.

The afternoon session have been devoted to the Issue Paper topic on the Status, Functioning and Role of the Regulator. Several speakers have presented this issue, Commissioner Steve Gaw, Missouri Public Service Commission, spoke about the history, structure and functions (legislative and adjudicative proceedings) of the Commission, the rules of Commissioners’ appointment and removal, the Ex-Parte Communication, and the role of the regulator in the social issues, the consumer protection and utility sanctions. Ms. Merita Kostari, from the Energy Regulatory Office of UNMIK Kosovo, among other issues, presented in depth the legislation background, the legal, financial and functional independence of the regulator, the areas of responsibility. The last presentation on the Status, Role and Functioning of the Regulator has been delivered by Mr. Evlampie Donos, National Energy Regulatory Agency of Moldova, who presented the main functions of the Agency, its organizational structure, budget sources, and the decision-making process and appeals.

The morning session of the second day started with presentations on the EU Energy and related Directives. As seven ERRA members are EU members as well, it is important for the Group to be acquainted with the latest developments of the EU energy legislation. Mr. Thomas Gruber, from E-Control, Austria presented the Long Term Contracts for Cross Border Trade in EC Jurisdiction. In his presentation, he explained the current obstacles to electricity cross-border trade, the characteristics of long term reservations on congested interconnectors, the remedies to ensure effective cross-border trade, the relevant positions of the Directive 96/92/EC. In the second presentation, Mr. Daniel Vitanyi, Hungarian Energy Office, presented the last amendments to the Hungarian Electric Energy Act, which aims to provide partial equivalence of the EC Directives on internal electricity market, supporting of renewable and combined energies. He also talked about the new authorities of the Hungarian Energy Office.

Ms. Paraskeva Kisseva, State Energy and Water Regulatory Commission (SEWRC) of Bulgaria, presented a case study on the Court Challenges to tariff changes on increased household electricity charges. Until 2001, the household electricity prices in Bulgaria were the lowest in the East European transition countries and did not cover the costs of electricity supply to households. These prices were maintained by cross-subsidies. Bulgaria undertook commitments for a gradual increase of energy prices for households, so that the average tariffs for household and industrial customers should be on the same level. Ms. Kisseva explained the legal background of the decision of the Supreme Administrative Court, who revoked the decision of SEWRC on price increases. This topic generated vivid discussions among the members of the working group.

The afternoon session was dedicated to the discussions on the issue of Disputes Settling. In his presentation, titled as War and Peace: Alternative Modalities of Dispute Resolution in the Electricity Sector in the United States, Mr. Laurence G. Chaset, California Public Service Commission, presented the federal and state jurisdictional differences, litigation and settlement proceedings, the Alternate Dispute Resolutions and the functions of the Administrative Law Judges. Ms. Vilma Adamaviciute (National Control Commission for Prices and Energy of Lithuania, Vice-Chair, ERRA Legal Regulation Working Group) presented the legal background and some settled court cases. Mr. Alexander Pozyabin, Federal Tariff Service of the Russian Federation, presented the appeal process and disputes settlement and the FST supervising decisions over the executive power bodies of entities of the Russian Federation in the field of state regulation of tariffs.

Finally, Ms. Viola Dozsa presented the latest ERRA updates.

By Viola Dozsa, ERRA Senior Program Manager

09:00 Welcoming Comments

• Chairman Valerii Kalchenko, NERC, Ukraine
• Commissioner Lyubov Goncharova, NERC, Ukraine, Chair of the ERRA Legal Regulation Working Group

09:15 Introduction of new Working Group Representatives and NARUC Commissioners, Representatives of NERC

09:30 Election of the Vice Chair of the ERRA Legal Regulation Working Group

09:40 Roundtable Discussions: Updates on Legal Issues by Committee Members
(Each Working Group Member will be requested to give a max. 5 minutes verbal update on the recent developments in their country in the field of legal issues)

10:30 Coffee break

10:45 Roundtable Discussions: Updates on Legal Issues by Working Group Representatives (cont’d)
(Each Working Group Member will be requested to give a max. 5 minutes verbal update on the recent developments in their country in the field of legal issues)

12:00 Discussion on the Workplan for 2005-2006
Classification of the duties and responsibilities among Working Group members

• Led by Commissioner Lyubov Goncharova, NERC, Ukraine, Chair of the ERRA Legal Regulation Working Group

12:30 Lunch

14:00 Status, Functioning and Role of the Regulator

• Commissioner Steve Gaw, PSC, USA

14.45 Status, Functioning and Role of the Regulator (cont’d)

• Ms. Merita Kostari, Head of Legal and Licensing Office, ERO, Kosovo

15:30 Coffee break

15.45 Status, Functioning and Role of the Regulator (cont’d)

• Mr. Evlampie Donos, Head of Legal and Consumer Protection Department, ANRE, Moldova

16:30 Discussions on the presentations on Status, Functioning and Role of the Regulator

17:00 Meeting Concludes

19:00 Group Dinner

09:00 EU Energy and related Directives
Judgment of the European Court of Justice concerning Long Term Contracts for Cross Border Trade (7.6.2005, Rs C-17/03)

• Mr. Thomas Gruber, Legal Expert, E-Control, Austria

09:45 EU Energy and related Directives(cont’d)

• Mr. Daniel Vitányi, Legal Advisor, HEO/Hungary

10:30 Coffee break

10:45 Discussions on the presentations on EU Energy and related Directives

11:15 Bulgarian Case Study - Court challenges to tariff changes on increased household electricity charges

• Ms. Paraskeva Kisseva, Director of Legal Division, SEWRC, Bulgaria
• Questions & Answers

12:00 Lunch

13:30 Disputes Settling – Case Presentations

• USA – Mr. Laurence G. Chaset, California Public Service Commission, USA

14:15 Lithuania - Ms. Vilma Adamaviciute, Lawyer, NCC

15:00 Coffee break

15:15 Disputes Settling – Case Presentations (cont’d)

• Russia – Mr. Alexander Pozyabin, Chief Specialist, Legal Examination Department, FST/Russia

16:00  Discussions on Disputes Settling presentations

17:15 Update on the ERRA Activities

• Ms. Viola Dozsa, Senior Program Manager, ERRA Secretariat

17:30 Meeting Concludes