BULLETIN

The Energy Regulators Regional Association (ERRA) organized the Tariff/Pricing Committee meeting on September 22-23, 2005 in Yerevan, Armenia. The meeting was co-hosted by the Public Service Regulatory Commission of Armenia (PSRC), 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).

21 ERRA member organizations participated in the fall meeting of the ERRA Tariff/Pricing Committee, namely energy regulators from Albania, Armenia, Bosnia and Herzegovina, Bulgaria, Croatia, Estonia, Georgia, Hungary, Kazakhstan, Kyrgyz Republic, Latvia, Lithuania, Macedonia, Moldova, Montenegro, Romania (ANRE), Russian Federation, Ukraine. Apart from the Full Members, Associate Member Organizations were also represented from Romania (ANRGN), and UNMIK-Kosovo In addition, NARUC delegated 2 US regulators from the Wyoming Public Service Commission and the North Dakota Public Service Commission. ERRA was happy to host several regulators representing the Public Service Regulatory Commission of Armenia.

The agenda of the two-days meeting focused on five major topics: (1) Allocation Cost & Methods for Distribution and Supply, (2) Efficiency calculation for natural monopolies, (3) Privatization of Distribution and Supply Companies (4) Pricing Issues & Challenges in a Regional Market, and (5) Market Opening and Impact on Captive Consumers’ Rights and Obligations.

The morning session of the first day started with the Welcoming Comments by Chairman Robert Nazaryan (Public Service Regulatory Commission of Armenia), and Commissioner Svetla Todorova (State Energy and Water Rregulatory Commission of Bulgaria; Chairwoman, Tariff/Pricing Committee). The local media (TV, newspapers) interviewed several ERRA members during the coffee break.

After the conventional country updates by Tariff/Pricing Committee members on the recent developments in the field of tariffs and pricing at each member country, participants discussed possibilities over the improvement of the ERRA Statistical Database.

The morning session of the first day proceeded with the presentations on the Allocation Cost and Methods for Distribution and Supply. Ms. Aistija Zubaviciute (Chief Specialist, National Control Commission for Prices and Energy in Lithuania; Vice-Chair of the ERRA Tariff/Pricing Committee) presented the comparative analysis of the questionnaire, which was complied in co-operation with Mr. Cetin Kayabas (Group Head, Electricity Market Implementation Department, Energy Market Regulatory Authority of Turkey). The final paper with the findings will be presented in Spring 2006 at the ERRA General Assembly meeting. This issue is important for countries opening their markets and confronting with fair cost allocation and regulation, ensuring the reliable operation of energy companies. The theme was continued by Ms. Denise Parrish, (Deputy Administrator, Wyoming Public Service Commission) who presented the Allocation Cost US Overview, highlighting the break off non-utility and investments, methods to classify costs by the type of consumers.

The Performance Evaluation of Energy Distribution Companies in ERRA Member Countries was introduced by Commissioner Yurii Kyashko (National Electricity Regulatory Commission of Ukraine) showed results on another ERRA Questionnaire on Efficiency Calculation. The presentation also touched on the performance evaluation from the regulators’ point of view and the performance/efficiency analysis method.

On the second day, three ERRA countries presented the issue of Privatization of Distribution and Supply Companies. The Armenian experience by Mr. Armen Arshakyan (Head of Tariff Methodology Department, Public Servics Regulatory Commission, Armenia); the Bulgarian case study by Commissioner Svetla Todorova (State Energy and Water Rregulatory Commission of Bulgaria; Chairwoman, Tariff/Pricing Committee), and finally the Romanian practice by Mr. Catalin Lazar (Expert, Romanian Electricity and Heat Regulatory Authority).

The next issue was Pricing Issues & Challenges in a Regional Market by Commissioner Susan Wefald (North Dakota Public Service Commission, USA), who presented the Midwest ISO (MISO) and OMS key pricing issues, tariff for new and upgraded transmission lines.

The Market Opening and Impact on Captive Consumer‘s Rights and Obligations in Hungary by Mr. Ede Treso (Leading Senior Advisor, Hungarian Energy Office) showed the history of market opening in Hungary, the characteristic numbers of competitive market , the hybrid electricity market model in place.

Ms. Viola Dozsa gave the committee members an Update on Recent and Future ERRA Activities, including some future plans, new pilot training concepts. At the end of the day, the committee members voted on the issues for the workplan of 2006.