| Regulatory Exchange Newsletters / Spring 2004 New Chairman of Energy Regulators Regional Association Assumes Office
Mr. Vidmantas Jankauskas, Chairman of the National Control Commission of Prices and Energy of Lithuania took up his position as Chairman of ERRA, a voluntary international organization of independent energy regulatory bodies of Central/Eastern Europe and Eurasia.
Mr. Vidmantas Jankauskas succeeds Prof. Dusan Holoubek who had to resign on December 18th, 2003 since he was not reappointed as Commissioner of the Slovakian Regulatory Office for Network Industries by the President of Slovakia. ERRA would like to convey its sincere appreciation to Prof. Dusan Holoubek.
Mr. Jankauskas was elected as the first Vice Chairman of ERRA in December 2000 during the Association’s first General Assembly Meeting. He was re-elected in December 2003 to serve a second term as a Presidium Member and assumed the ERRA Chairmanship in accordance with the ERRA Constitution in January 2004.
Mr. Vidmantas Jankauskas graduated in 1973 from the Vilnius University and started his business career at the Lithuanian Energy Institute. He spent 23 years there working on energy planning, energy economics and related issues. In 1983, he received a doctorate degree from Kaunas Technological University and in 1994 a Doctor Habilitatis degree from the Latvian Academy of Sciences. In 1996, he became Professor of Economics at Vilnius University. Since February 1997, Mr. Jankauskas has been Chairman of the National Control Commission for Prices and Energy; this is an independent state agency regulating electricity, gas, heat and water sectors.
ERRA Legal Regulatory Meeting
The Energy Regulators Regional Association (ERRA) organized a Legal Regulatory Meeting on February 4-5, 2004 in Budapest. The meeting was co-hosted by the Hungarian Energy Office (HEO), 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 aim of the meeting was to bring together staff persons of ERRA member organizations directly involved in legal regulation, licensing and the dispute resolution process. It was the very first time that ERRA lawyers had the opportunity to meet and to discuss issues of common interest in the field of legal regulation. Representatives from 21 ERRA member organizations participated, in addition there were 2 US and 1 Austrian regulators.
In her welcoming comments, the Leader of the Group, Commissioner Lubov Goncharova (Ukrainian National Electricity Regulatory Commission) stressed the importance of the meeting and the crucial role lawyers play in regulation. She introduced the objective of the meeting as to compare and review various legal regulatory practices of ERRA members and if possible to put together a Glossary of Legal Terms.
Prior to the meeting, the ERRA Secretariat sent out a survey to each participant in order to assess the existing legal backgrounds and regulatory practices of ERRA members. The results of the survey were reviewed and compiled into a comprehensive analysis by the ERRA Secretariat and the analysis was introduced by Ms. Krisztina Kasza, ERRA Program Director after the Introductory Remarks. The analysis aimed at questions such as (1) the decision-making process of regulators, (2) the appeal process, (3) transparency and openness of the regulator, and (4) examples of court procedures.
Following, 6 countries introduced their legal practices in details (Ms. Carmen Oprea, Head of Legal Office, Romanian Heat and Electricity Regulatory Authority; Mrs. Olena Gavrylyuk, Head of Legal Department, National Electricity Regulatory Commission of Ukraine; Mrs. Olga Serova, Head of Legal Department, State Energy Agency under the Government of the Kyrgyz Republic; Mr. Evlampie Donos, Head of Department, Legal and Consumer Protection, National Energy Regulatory Agency, Moldova; Mrs. Nilüfer Şentürk, Lead Attorney, Energy Market Regulatory Authority, Turkey; Mrs. Erika Cserhati, Legal Advisor, Hungarian Energy Office.) Next, Ms. Sally G. Johnston presented the US legal regulatory practice in the State of Washington (Washington Utilities and Transportation Commission), while the Indiana practice was introduced by Judge Scott Stormes of the Indiana Utility Regulatory Commission. As an example for the West European legal practice, Mr. Wolfgang Urbantschitsch, Head of Legal Department, E-Control, Austria delivered a presentation.
At the end of the meeting, the participants agreed on the need for finalizing and distributing the ERRA comprehensive analysis of legal regulatory practices. In addition, the group identified the following issues for future discussions: (1) Open government: open public meetings, public records, ethical obligations of the regulator, prohibitions against ex parte communications, appearance of fairness; (2) Administrative and judicial reviews; (3) Remedies for non-compliance; (4) Public advocacy; and (5) Adjudicative orders. In addition to the above, members expressed an interest in developing a Comprehensive Glossary to facilitate a common understanding of legal terms applicable to energy regulation.
For more information on the meeting or the presentations, please visit www.erranet.org or contact the ERRA Secretariat at secretariat@erranet.org.
By Krisztina Kasza, ERRA Program Director ERRA Rate of Return (RoR) Versus Incentive Based Regulation (IBR) Workshop
The Energy Regulators Regional Association (ERRA) 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 the year 2004. The aim of this workshop was to provide an in-depth comparison of the pros and cons of these approaches 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 a 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/Romania) 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 are used and gave an overview of Cost-Based and Incentive Regulation. His presentation also 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, Commissioner Gugu presented the Romanian Distribution Tariff Methodology.
After the presentations, time was allocated to exchange views and opinions generated by this topic. At the end of the workshop, the participants noted that the 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 develop a narrative and explanatory paper as well and not only presentation, for an easier way to follow-up after the meetings.
For more information on ERRA and the workshop materials, please visit www.erranet.org or contact the ERRA Secretariat at secretariat@erranet.org.
By Viola Dozsa, ERRA Program Manager ERRA Performance Standards/Monitoring of the Licensed Activities - Working Group Meeting
Before its two-day meeting, the Licensing/Competition Committee of the Energy Regulators Regional Association (ERRA) held a workshop on 22 February 2004 in Bucharest, Romania. It was co-hosted by the Romanian Heat and Electricity Regulatory Authority (ANRE), National Natural Gas Regulatory Authority (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).
Representatives from 13 of ERRA’s 19 Full Members arrived for this working group meeting, including Commissioners and senior staff from Albania, Armenia, Bulgaria, Estonia, Hungary, Kyrgyz Republic, Lithuania, Moldova, Poland, Romania (ANRE), Russian Federation, Slovakia, and Ukraine. Apart from the Full Members, Associate Member Organizations were also represented from Mongolia, Romania (ANRGN). NARUC also represented itself with Deputy Director of Utilities Department, Public Utilities Commission of Ohio, Ms. Kim Wissman, and Chairman of Maine Public Utilities Commission, Mr. Thomas Welch.
The Working Group meeting was opened by Mrs. Michaela Popescu, Head of Electricity Licenses and Authorization Office, ANRE/Romania, and Mr. Endre Slenker, Senior Specialist of the Department of Electricity Licensing and Monitoring, HEO. In his opening speech Mr. Slenker welcomed all the participants and the idea that this working group would continue its activity. In the first part of the morning session Chairman Welch delivered his presentation on Analytical Approach of Assessing Success in Monitoring. It was followed by the Introduction of the Workplan of the Working Group for 2004. The Working Group prepared an Issue Paper titled “Mechanism of Monitoring and Enforcement of the Conditions of the Licensed Activities” in 2001 which was introduced and evaluated by Mr. Endre Slenker.
In the second half of the meeting the members prepared proposals for the next meeting of the working group to be held on 20 May in Budapest. Following, all the members gave country updates on the following issues. “Legal Background in the ERRA member countries,” “Data Collection of Regulators,” “Monitoring/Surveillance,” “On Site Supervision,” “Additional Data to be Collected,” “Future development Plans,” and “Performance Benchmarks: Standards Set by Regulators for Companies.”
The Working Group meeting concluded with distribution of tasks to be fulfilled for the next Working Group meeting in May.
For more information on ERRA Licensing/Competition Committee, please visit www.erranet.org.
By Anna Fischer, ERRA Program Officer ERRA Winter Tariff/Pricing Committee Meeting
The Energy Regulators Regional Association (ERRA) held its Winter Tariff/Pricing Committee Meeting on February 23-24, 2004 in Bucharest, Romania. The meeting 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).
Representatives from 15 of ERRA’s 19 Full Members participated on the meeting, including Albania, Armenia, Bulgaria, Croatia, Estonia, Hungary, Lithuania, Moldova, Mongolia, Poland, Romania, Russian Federation, Slovakia, Turkey, and Ukraine. ERRA Associate members joint the meeting from Mongolia, Romanian Gas Regulator. As Observers, representative from the newly founded Regulatory Commission of Macedonia and Dr. Jamshid Heidarian, Senior Energy Advisor, Energy and Infrastructure Division, Bureau for Europe and Eurasia, USAID took part on the meeting. NARUC representatives included Ms. Sandra Waldstein, Senior Policy Advisor, Vermont Public Service Board and Mr. Mark Beyer, Deputy Chief Economist, New Jersey Board of Public Utilities.
The Winter Meeting of the ERRA’s Standing Committee, which lasted for two-days, began with traditional country updates presentations on the Regulatory Tariff News of the ERRA member-countries, focusing on the news in the energy sector and tariff regulation. ERRA members introduced the regulatory situation in their country in a 15 minute presentation with updates on the latest changes since the previous meeting.
Further on, the Committee discussed and approved the Issue Paper on “Determination of Tariffs for Ancillary Services” written by Ms. Sandra Waldstein, U.S., and Mr. Ainars Cunculis, Latvia. The issue paper included a comprehensive glossary of ancillary terms with the aim to clear of existing different understanding of terms used in the energy sector worldwide. The paper detailed the types, pricing and charges of ancillary services in the EU and ERRA countries. Prior to this paper, the ERRA Secretariat sent out two questionnaires to every participant in order to obtain information of the applicable ancillary services in the ERRA region. Appendixes to the paper focused on the UCTE terms, U.S. examples and state of ancillary services.
After that Mr. Ede Treso, Hungary, presented a case study about how to “Supply quality standards and regulation from HEO’s respect.” The study was a follow-up report from discussions held during the Fall meeting in 2003. Hungary has taken a leading role in introducing quality standard regulation and benchmarking, and the study detailed incentive/penalty mechanisms’ reflection on prices.
During the afternoon of the second day, the Committee focused on the Work Plan for 2004, clarifying future tasks and new projects, including a Workshop dedicated to gas tariff issues, and future topics such as the joint meeting with the Licensing Committee on Stranded Cost, Performance Evaluation, ERRA Tariff Data Collection of Average Electricity and Gas Prices. At the end of the meeting, Ms. Viola Dozsa, ERRA, briefed the committee members on recent and future planned ERRA activities and on the possible dates, topics and location of the upcoming meetings.
For more information on ERRA and the workshop materials, please visit www.erranet.org or contact the ERRA Secretariat at secretariat@erranet.org.
By Viola Dozsa, ERRA Program Manager ERRA Winter Licensing/Competition Committee Meeting
The Energy Regulators Regional Association (ERRA) held a Licensing/Competition Committee meeting on 23-24 February 2004, in Bucharest, Romania. It was co-hosted by the Romanian Heat and Electricity Regulatory Authority (ANRE), National Natural Gas Regulatory Authority (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).
Representatives from 14 of ERRA’s 19 Full Members arrived for the two-day committee meeting, including Commissioners and senior staff from Albania, Armenia, Bulgaria, Estonia, Hungary, Kyrgyz Republic, Latvia, Lithuania, Moldova, Poland, Romania (ANRE), Russian Federation, Slovakia, and Ukraine. Apart from the Full Members, Associate Member Organizations were also represented from Mongolia, Romania (ANRGN). NARUC also represented itself with Deputy Director of Utilities Department, Public Utilities Commission of Ohio, Ms. Kim Wissman, and Chairman of Maine Public Utilities Commission, Mr. Thomas Welch.
The meeting started with the Welcoming Comments, delivered by President Ion Lungu, Romanian Heat and Electricity Regulatory Authority. After the warm welcome, Chairman Gabor Szorenyi introduced the new Committee Members and NARUC representative, Ms. Kim Wissman. The first part of the meeting was devoted to the issue of Balancing Markets, which was reviewed by Mr. Anders Plejdrup Houmoller, Nordpool, who gave a detailed description of the Danish model. Other aspects of this issue were highlighted by Ms. Kim Wissman and Chairman Welch who analyzed the Market Models existing in the US. The first day of the meeting concluded with two deeply interesting, thought-provoking presentations, delivered by Commissioner Alexandru Sandulescu, ANRE/Romania, and Mr. Bogdan Popescu Vifor, Transelectrica.
The second day of the meeting started with the traditional update on the recent Commission information, recent and future ERRA activities, and introduction of the Licensing/Competition Committee Workplan for 2004. Commissioner Maria Manicuta introduced the final version of Discussion Paper #3/2003 on Distribution: Public Service Obligations, TSO Obligations, while Mrs. Ligia Medrea presented the final version of Discussion paper #2/2003 on Status of TPA Guidelines in ERRA Member Countries, Chairman Gabor Szorenyi introduced the Interim Analysis of the Questionnaire on Security of Supply. Chairman Thomas Welch gave a presentation on Cooperation with system Operators in which concerns about the reliability of electricity networks were emphasized in order to avoid blackouts and similar failures that can occur. Beside the presentations and discussion papers, daily regulatory issues, questions interesting for the Committee members were also discussed.
The Meeting ended with assignments of roles/responsibilities to committee members for the next meeting to be held in on 19 May 2004 in Budapest.
For more information on ERRA Licensing/Competition Committee and for the materials of the meeting, please visit www.erranet.org.
By Anna Fischer, ERRA Program Officer 3rd Energy Regulation & Investment Conference We are pleased to inform you that the Energy Regulators Regional Association (ERRA) organizes its 3rd Energy Regulation & Investment Conference on May 17-18, 2004 in Budapest. By today the Conference has gained significant international awareness and has become a widely recognized and acknowledged industry event. The Conference identifies itself as an influential strategic level meeting point of energy regulators and various industry representatives.
The 2004 event focuses on four major issues. With recognized experts from the electricity industry, we will be able to take a close look at Regulatory Progress to Encourage Investments. In addition, you will find out about the Role of the Regulator in Promoting Investments under the Plenary Session on Security of Supply. Speakers of the conference will report on the status of the Regional Energy Trade and will tackle Emerging Issues in Energy Regulation.
We are pleased to announce that the 3rd Energy Regulation and Investment Conference is endorsed by the President of the Republic of Hungary, Dr. Ferenc Madl. We are honored that the following speakers have already confirmed their participation:
President Jean Lemierre, EBRD
Minister Milko Kovachev, Bulgaria
Deputy State Secretary Gyorgy Hatvani, Hungary
Commissioner Nora Brownell, FERC
Secretary General Paul Bulteel, Eurelectric
have already confirmed their roles as speakers. Country Updates
These countries provided new information.
 Albania
Bulgaria
Hungary
Latvia
Moldova
Poland
Romania
Turkey |
