Regulatory Exchange Newsletters / Winter 2004  Newsletter_FINAL_eng.pdf
ERRA EU Integration Working Group Meeting on “Cross Border Capacity Allocation Methods”
According to the decision of the ERRA Presidium, the former ERRA EU Accession Working Group continued its work under the name of EU Integration Working Group with Mr. Ion Lungu (Vice President of the Romanian Electricity and Heat Regulatory Authority) as a chairman of the working group and with an extended scope of participants.
The EU Integration Working Group held a meeting on September 13, 2004 in Budapest, Hungary. It was co-hosted by the Hungarian Energy Office (HEO), the Energy Regulators Regional Association (ERRA) and the U.S. National Association of Regulatory Commissioners (NARUC), with funding provided by the U.S. Agency for International development (USAID). Representatives from 11 ERRA member countries participated in the meeting, including senior staff from Bulgaria, Croatia, the Czech Republic, Estonia, Hungary, Latvia, Lithuania, Macedonia, Moldova, Romania and Turkey. The Austrian and French regulators represented the Council of European Energy Regulators (CEER).
Commissioner Jacques-Andre Troesch from the Commission de Regulation de l'Energie, France in his welcoming comments introduced the main topic of this meeting and stressed that cross-border allocation methods are short-term priorities in the EU. He drew the audience’s attention to the new challenges for interconnections, emphasized the importance of the new infrastructures and underlined that the allocation methods must be suitable for the market.
Commissioner Maria Manicuta (ANRE, Romania) introduced an issue paper prepared earlier by the ERRA Licensing/Competition Committee on “Cross-Border Allocation Methods in ERRA Member Countries.” Commissioner Manicuta started her presentation with giving a common definition of the main terms used in this field: defining Transmission Congestion and Net Transfer Capacity. Then she introduced the process of setting up the Cross-border Capacity Allocation Methods, starting with the identification of Transmission Asset Owners, setting up the basic methods of allocating NTC and continuing with the description of the advanced methods of NTC allocation. The necessary steps to increase competition by reducing the importance of national borders as constraints were deeply analyzed, and Commissioner Manicuta underlined how important it is to promote and encourage investments to fix critical bottlenecks. Since legal authorities of the regulators are different in the region, they have to face different challenges but it is common that they have to implement national legislation and the EU Electricity Directive, based on the assumption that a court would not prohibit regulatory activities that are clearly required to implement the EU directive. Commissioner Manicuta finished her presentation by listing all the challenges that the regulators face in the region.
The Chairman of the EU Integration Working Group, Mr. Ion Lungu (ANRE, Romania), analyzed the Congestion Management Practice at Cross-Border Trade in the ERRA region in his presentation. After outlining the background in the region, Mr. Lungu gave a thorough analysis of the Congestion Management Methods, keeping in view the Provisions of EU Regulation 1228/2003, and described the actual status of Congestion Management (CM) in the South East European region with special respect to CM in Romania.
Dr. Tahir Kapetanovic, Chairman of CEER TF System Operation, (E-Control, Austria) delivered a presentation on Congestion Management and the EC Regulation 1228/2003. After giving the historical background of EC Regulation 1228/2003, Dr. Kapetanovic introduced Article 5 and 6 of the Regulation, emphasizing provisions of information, general principles, such as “Economic Efficiency,” “Promoting Competition,” “Transparency,” “Maximizing Capacity and its Use,” and “Application of Congestion Revenues.” This thought provoking presentation was finished with the conclusion that efficient and market conformant congestion management, together with an adequate long-term ITC system are the mandatory predictions for a truly internal electricity market.”
Mr. Laszlo Varro, Director of Tariff Department of the Hungarian Energy Office, examined the question of “Regional Market Integration” in his presentation. He tried to give an answer from the economic point of view for the reason of creating regional markets and showed the methods of this procedure.
Question of the “Allocation of Cross-Border Capacities at Borders” and “Cooperation between TSOs” were discussed by Mr. Peter Simig, Deputy Director for Market Operation of the Hungarian Power System Operator Company (MAVIR) and Mr. Bogdan Popescu Vifor, Director of Strategy, Planning and Market Division, CN Transelectrica SA Romania. Mr. Simig started his presentation with the ETSO approach of handling Cross Border trading and the description of congestion management methods in Europe for transmission capacity allocation. After showing examples for explicit and implicit auctions, Mr. Simig highlighted the advantages of coordinated auctioning through an example of the market-based cross border congestion management method. He finished his presentation with describing the current methods on Hungarian borders for capacity allocation and introducing the further plans for it.
Mr. Popescu Vifor introduced Transelectrica’s mission and the Romanian Transmission Grid, the net transfer capacity values on Romanian borders at the beginning of his presentation. After capacity allocation on Romanian borders were described, Mr. Popescu Vifor described the process of application for the capacity allocation in Romania, and the criteria for NTC allocation. After getting acquainted with the criteria for ATC allocation the participants could learn about the process of application analysis and selection. The presentation ended with describing the process of contracting the Capacity Allocation and with a concrete example of a capacity allocation contract.
The meeting concluded with a roundtable discussion in which new ERRA EU member countries shared their experience in implementing the EU directives, cooperation with regulators in CEER and ERGEG.
For more information on this meeting, please visit http://www.erranet.org/Committee-WG/EU-AcessionWG
By Anna Fischer, Program Officer, ERRA
Workshop on Legal Regulation in ERRA Member Countries
The Energy Regulators Regional Association (ERRA) organized the 2nd Workshop on Legal Regulation in ERRA member countries on September 27-28, 2004 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).
The aim of the meeting was to promote better understating of the legal regulatory issues evolving in energy regulation among ERRA members and to continue the initiative of technical work on legal regulatory issues, which began with a workshop in February 2004. Representatives from 20 ERRA member organizations participated; in addition, two US and one Austrian regulator attended.
The two-day meeting focused on several issues such as Appeal Process, Sanctions for Not Meeting Regulatory Decisions, Relationship between Energy Regulators and Antimonopoly Organizations, Definition and Regulation of Vertically Integrated Monopolies, and Information Collection. After introductory remarks by Commissioner Lubov Goncharova (Ukrainian National Electricity Regulatory Commission), the Working Group leader, participants discussed the necessity of a common understanding of legal terms and team members were selected to develop a potential Glossary on Legal Regulatory Terms, which should include terms from EU Directives as well.
The issues of appeal process and types of decisions that can be appealed were introduced in several case studies by Mr. Daniel Georgievski (Macedonian Energy Regulatory Commission), Mr. Daniel Vitanyi (Hungarian Energy Office), Ms. Antonida Tarasenko (Ukrainian National Electricity Regulatory Commission) and Mr. John A. Levin (Assistant Counsel, Pennsylvania Public Utility Commission). During discussions participants learned about the peal processes in other countries (i.e. ERC Macedonia is not authorized to impose fines as sanctions, however, they can revoke licenses; in Ukraine tariffs cannot be appealed at courts).
Ms. Malgorzata Szczepanska, Polish Energy Regulatory Office, and Mr. John Levin, Pennsylvania PUC, discussed the sanctions process for utilities that do not implement the regulator’s rulemakings. The theme of the relationship between energy regulators and antimonopoly organizations presented by Ms. Olga Serova (Energy Agency under the Government of the Kyrgyz Republic) and Mr. Wolfgang Urbantschitsch (E-Control, Austria). This topic generated vivid discussions on allowed monopolies in the energy sector of the Kyrgyz Republic as well as comparisons of natural vs. artificial monopolies. Mr. Urbantschitsch and Ms. Ana Maria Stanciulescu (Romanian heat and Electricity Regulatory Authority) lead further discussions on the definition and regulation of vertically integrated monopolies. This issue is considered a hot topic at the European Commission (EC), and national monopoly authorities and member stated are invited by EC for discussions on competition in the energy regulation.
The second day started with a role-playing exercise on the rules and procedures for beginning a case in the US under the supervision of Mr. Scott Storm, Chief Administrative Law Judge, Indiana Utility Regulatory Commission. The fictional role-play involved two companies and an attorney for the public advocate and gave an interesting chance for the participants to see in practice the US court procedures. The ERRA participants divided into three groups and followed the instructions of the scenario, the settlement worksheet, and the rehearing conference order. The goal of the teams was to reach a final decision on agreement of dates, the procedure schedules (petitioner's prefiling date), and the settlement hearing.
The workshop continued with presentations on information collection with subtopics including: the legal basis for information collection, routine regulatory reporting for the purposes of monitoring utility performance against quality of service standards, and public vs. confidential information. Ms. Malgorzata Kozak, Polish Energy Regulatory Office and Ms. Vilma Adomaviciute, Lithuanian National Control Commission for Prices and Energy, presented in details the practice followed in their countries.
Finally, participants of the Workshop on Legal Regulation in ERRA member countries voted on the formalization of the future work as a committee and expressed great interest to meet and discuss legal issues in year 2005 on a regular basis.
By Viola Dozsa, ERRA Program Manager
Performance Standards/Monitoring of the Licensed Activities Working Group
Prior the two-day Committee Meeting, the Performance Standards/Monitoring Working Group of the ERRA Licensing/Competition Committee held a workshop on 10 October 2004 in Tirana, Albania. It was co-hosted by Albanian Electricity Regulatory Authority (ERE), 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 10 of ERRA Member organizations participated including: Albania, Estonia, Georgia, Hungary, Latvia, Lithuania, Macedonia (2 reps.), Romania (ANRE), Turkey and Romania (ANRGN). NARUC was represented by Dr. Jeffrey Conopask, Senior Economist of District of Columbia Public Service Commission.
The Working Group meeting was chaired and opened by Mr. Endre Slenker, Senior Specialist of the Department of Electricity Licensing and Monitoring, Hungarian Energy Office, Leader of the Working Group. In the first part of the session, Mr. Victor Teodoroiu from the National Electricity and Heat Regulatory Authority of Romania introduced the Amended Performance Standards Questionnaire of the Working Group. It was followed by the introduction and discussions of the answers by all Working Group Members.
In the second half of the meeting Dr. Jeffrey Conopask delivered a presentation on Enforcement of Performance Standards in the United States and Mr. Kestutis Zilenas from the National Control Commission for Prices and Energy of Lithuania delivered his presentation on Licensing and Supervision System for the Activity in Energy sector in Lithuania.
Next Mr. Slenker presented on Performance Indicators for Renewable Energy Recourses (Performance of Generation Plants by the World Energy Council).
After that, the Workplan for 2005 was introduced and the members prepared proposals for new topics. The following proposals were accepted:
1. Supplier of Last resort - Ms. Manicuta's (Romania) proposal
2. Standardization of Licensing Procedures - Mr. Samil Redzepi's (Macedonia) proposal
3. Performance Standards and System Operators in Gas sector - Ligia Medrea's
(Romania) proposal
4. TSO as balancing market operator - Mr. Teodoroiu's (Romania) proposal.
After participants expressed their need to continue the activities of the Working Group, the meeting was concluded.
By Katalin Szarvas, Program Assistant, ERRA
Licensing/Competition Committee Meeting
The Energy Regulators Regional Association (ERRA) organized the Licensing/Competition Committee meeting on October 11-12, 2004 in Tirana, Albania. The meeting was co-hosted by the Albanian Electricity Regulatory Authority (ERE), 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).
During the fall meeting of the Licensing/Competition Committee, representatives from 17 ERRA member organizations participated; in addition 2 US and 1 Italian regulator were presented.
The agenda of the two-days meeting focused on three major topics: Public Service Obligations, Stranded Cost Compensation Methods, and Security of Supply. The morning session of the first day was devoted to discussions on the Public Service Obligations which were highlighted from two respective points of view: Mr. Roberto Malaman, Director of Quality and Consumer Affairs, Autorità per l'energia elettrica e il gas, Italy, presented the EC relevant Directives, the legal framework, also he made an excellent comparison of PSOs in different European countries based on CEER Survey. PSOs in ERRA countries were delivered by Mr. Victor Teodoroiu, ANRE/Romania, Mr. Kestutis Zilenas, NCC/Lithuania, Ms. Ligia Medrea, ANRGN/Romania, and Ms. Natasa Hudcovicova, RONI/Slovakia.
After the structured analysis of PSOs, Dr. Gabor Szorenyi (Director, Hungarian Energy Office, Hungary), Chairman, Licensing/Competition Committee, presented the issue of the Stranded Cost Compensation Method, highlighting the history of long-term Power Purchase Agreements (PPA) in Hungary, chronologically reviewing events in line with Stranded Cost, the Capacity Auctions, and European Commission Competition State Aid. Following, Dr. Szorenyi briefed the Committee on the activities of the Council of European Energy Regulators (CEER) and the European Regulators Group for Electricity and Gas (ERGEG).
Tuesday morning started with conventional country updates on recent developments in ERRA member countries in the field of licensing and competition. Apart from discussions of the workplan for 2005 and future committee work, time was dedicated to the issue of Security Supply (SoS) in the US, which was introduced by Mr. Jerry Webb, Director of Gas, Engineering and Water at the Indiana Utility Regulatory Commission. Two specialists from the Hungarian Energy Office, Ms. Zsuzsa Tassy and Mr. Attila Bakonyi presented the results of the questionnaire on the Evaluation of the Situation of Security of Supply in ERRA countries. The in-depth analysis of replies from 20 countries showed variations in the trends of capacity and demand, regulatory climate on the SoS, and market concentration. The study also dealt with the emerging issue of technically worn down plants and networks and the urging need to invest into generation nationwide. It was a common understanding of the committee members that the evaluation should be updated annually and the final version of the analysis will be complied as an Issue Paper. Finally, Dr. Szorenyi talked about the Hungarian Power Generation Sector in this presentation titled: Alternative measures for assuring sufficient capacity – Element of Security of Supply focusing on the market driven investment.
By Viola Dozsa, ERRA Program Manager
Natural Gas Workshop of the ERRA Tariff/Pricing Committee
The Energy Regulators Regional Association (ERRA) organized the Natural Gas Workshop on October 24, 2004, preceding the two-day Tariff/Pricing Committee Meeting in Zagreb, Croatia. The meeting was co-hosted by the Croatian Energy Regulatory Council (CERC), 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).
In his Welcoming remarks, Chairman Miko Klepo, CERC emphasized the importance of the exchange of experience and information at the international level with the goal to improve regulatory practices and foster clear regulatory mechanism and relationship between the regulatory bodies in the region.
The natural gas sector in ERRA countries was highlighted via a set of case studies; Commissioner Ivona Stritof, CERC/Croatia, updated on the South-East-European Regional Gas Networks, the Croatian gas market structure and tariff/pricing issues related to it. Mr. Armen Arshakyan, Head of Tariff Department, National Public Services Regulatory Commission of Armenia, briefed about the principles of determination of effective and used assets applied during major modification of the gas consumption, touching upon the depreciation norms used to calculate the residual value, pros and contras in using this principle. This issue generated a lot of discussion.
Ms. Laimute Necejauskiene, Head Specialist, National Control Commission for Prices and Energy, explained the pricing principles and price setting practiced in Lithuania. Further on participants listened to two additional ERRA members’ presentations: Mr. Slavko Bundaleski, Advisor, Energy Regulatory Commission of Macedonia, briefed about the development plans and future extension of the pipelines and new trends (a new law will be passed). The Romanian Gas market was presented by Mr. Gabriel Sirbu, Director, National Regulatory Authority in Natural Gas Sector, who outlined the main principles of the Romanian methodology for setting prices and tariffs, approaches to technical and commercial losses.
After presentations from the ERRA countries, participants listened to two presentations on the U.S. gas market by Mr. Thomas Pearce, Chair, NARUC Staff Subcommittee on Gas Natural Gas, and Specialist, Public Utilities Commission of Ohio, and Ms. Denise Parrish, Deputy Administrator, Office of Consumer Advocate, Wyoming Public Service Commission. Mr. Pearce’s presentation touched upon the current US gas market issues, state issues and technological, economic, environmental and political interconnected topics. He also presented the gas tariff issues (commodity, pipeline capacity and storage capacity), as well natural gas rates. Ms. Parrish lead on with presenting the issue rate setting considerations and rate design as well as methods of computing an authorized return on equity.
All participants appreciated the roundtable discussions moderated by Ms. Parrish and Mr. Pearce and expressed wishes to continue with talks on the natural gas issues in the year 2005. The meeting ended with outstanding talks and friendly atmosphere.
By Viola Dozsa, ERRA Program Manager
Tariff/Pricing Committee Meeting
On October 25-26, 2004, the ERRA Tariff/Pricing Committee has held its fall meeting in Zagreb, Croatia. The meeting was co-hosted by the Croatian Energy Regulatory Council (CERC), 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 18 ERRA member countries and two NARUC specialists from the USA participated on the two-day conference.
After the welcoming by Deputy Chairman Eraldo Banovac, CERC/Croatia, Commissioner Svetla Todorova, State Energy Regulatory Commission, Bulgaria (Deputy Chair, Tariff/Pricing Committee) updated members on the findings and results of the ERRA Natural Gas Workshop that focused on 6 case studies and a roundtable discussion. Commissioner Todorova noted that the workshop was especially interesting because of the variety of international examples. Some countries are in the initial state of the gas market and some have more developed stage gas market; still the common issues of interest are the long-term contracts and their future, gas storages vs. gas market security of supply, and tariff issues in the ERRA region with varying methods of regulation from rate of return to price caps.
The morning session of the first day proceeded with the conventional country updates on the recent developments in the field of tariffs and pricing at each member country. Discussions on the Performance Evaluation issue touched three thematically separated categories: technical-engineering evaluation indices were presented by Mr. Ede Treso, Hungarian Energy Office. The theme was continued by Mr. Cetin Kayabas, EMRA/Turkey, who presented the results of the first questionnaire on the performance evaluation, and its financial aspects. Ms. Denise Parrish, Wyoming Public Service Commission, explained the US experience in the financial performance evaluation. As a result of talks, the committee agreed on the preparation of the 2nd questionnaire which would be more comprehensive and in-depth analysis of this issue before an issue paper is submitted for approval on the winter committee meeting.
On the second day, Ms. Denise Parrish, Deputy Administrator, Office of Consumer Advocate, Wyoming Public Service Commission presented the issue of the consumer advocacy with special attention to public interest’s protection. Commissioner Florin Gugu, Romanian National Electricity and Heat Regulatory Authority presented the ethical issues from the regulators point of view, in it he talked about the impact of ethics, code of ethics, and specific ethics for regulators. At the end of the day, the committee members voted on the issues for the workplan of 2005 and discussed ways and methods to make the ERRA tariff database online more sophistical. The meeting concluded with a short update on ERRA activities since the past winter committee meeting in Bucharest .
By Viola Dozsa, ERRA Program Manager
Technical Regulatory Exchange Program – Call for Applications!
In order to promote the exchange of technical information and best practices among its Members, ERRA (under the auspices of the NARUC/USAID Cooperative Agreement) is pleased to announce the establishment of limited number of travel subsidies for the ERRA Technical Regulatory Exchange Program. The purpose of the travel subsidies is to promote bilateral assistance and training projects within the Association, while taking into consideration budgetary constraints faced by many Member Regulators. Associate Members are entitled to take part in the program, but the ERRA Secretariat cannot provide funding for their participation.
There are two programs scheduled, between:
Moldova-Romania, on 7-11 December, to study the following topics and problems:
- Practices of ANRE Romania regarding to the drafting of regulations and rules in the field of energy
- Practices of ANRE Romania to solve the disputes between consumers and suppliers
- The role, functions and competences of the regulatory body related to implementation of energy policies
- Consumers protection mechanisms
- Procedures for approval and application of tariffs
And between:
Georgia-Ukraine, in the next year, to study the following topics and problems:
- Licensing process and monitoring
- Dispute Resolution
- New users, sub-users
- Committee Meetings
NEW FEATURES OF THE ERRA WEBSITE
HOT NEWS SECTION
We would like to announce that we created a page on the ERRA website called HOT NEWS. The idea of this page is to publish short and timely news on our member organizations e.g. information on changes of staff, tariff decisions, news on privatization etc. We would like to ask you to send us this type of information on a regular basis in order to make this section as up-to-date as possible.
The ERRA Secretariat will also visit ERRA Members’ website on a weekly basis to search for recent press releases (if available) for any new info.
For more information, please visit: http://www.erranet.org/News/HotNews
PHOTO GALLERY SECTION
We are happy to inform you about the other new feature of the ERRA website a so-called Photo Gallery. You can find photos of recent meetings starting from September 2004.
Please check it out by clicking here: http://www.erranet.org/news/gallery
Country Updates
These countries provided new information.
 Albania
Latest news on Albanian Regulator is the licensing of the first Transmission System Operator, which was established this July 2004.
It has also been given the status of the first eligible customer to a concessionary company “Darfo Albania” which will make possible the market opening in Albania.
During these months there have been approved some of the secondary legislation mostly regarding licensing activity and there are others in process such as the Market Rules and Grid Codes, Code of Transmission, Code of Distribution and Metering code. And it is our objective to finished them by the end of the year.
In November there was realized successfully the fifth partnership activity between the Albanian Regulator (ERE) and Indiana Regulator (IURC). It was a very important and very useful activity and we are looking forward to the next one.
In the mean time there in process the procedure for the tariff and prices for 2005 for domestic and industrial consumers, which has been accompanied, by a very transparent process to the public from the Regulator by having a public hearing session with all the stakeholders in the energy sector and public interest parties such as consumer organizations. We hope to have little reaction from the public about these new prices.
Armenia
1. During the last three months (September 1 – November 22, 2004) the Public Services Regulatory Commission of the Republic of Armenia adopted the following key regulations related to establishment of the electricity market and transfer to direct electricity (capacity) sale-purchase agreements:
- On approving sample agreements on sale-purchase of electricity (capacity) and rendering of services.
- On approving the procedure for accounting of electricity (capacity).
- On approving the procedure for payment from a special account and on utilization of guarantee money.
- On approving the procedure for export of electricity (capacity).
- On approving a sample agreement on sale-purchase of electricity: generator (windmills) – distr.
2. During the last three months no personal changes took place in the Public Services Regulatory Commission of the Republic of Armenia.
3. The Public Services Regulatory Commission of the Republic of Armenia is an independent state body that regulates the following industries:
1. energy sector, which includes power, thermal and gas supply systems,
2. water supply sector, which includes systems for supplying potable water, irrigation, supply of technical water, sewage and water treatment,
3. telecommunication sector.
According to the current legislation, the Commission has the following authorities.
1. licensing and control over licensees’ compliance with license terms,
2. setting regulatory tariffs,
3. elaboration of sample forms of agreements or compulsory terms of agreements concluded both with licensees and with consumers,
4. for the purposes of presenting reports to the commission – introducing a system of accounts and sub-accounts for licensees,
5. approval of market rules,
6. determination of requirements related to the consumer service quality, etc.
The most recent relevant event in the regulatory area was restructuring of the electricity wholesale market, that led to elimination of the current system of wholesale purchases of electricity from generators with the help of an intermediary (closed JSC “Armenergo”) and its re-sale to distribution companies. At present, a system of direct contracts between generators, distribution company and market serving companies (closed JSC ”Clearing Center”, closed JSC ”System Operator” and closed JSC ”High Voltage Lines”) has been introduced.
Bosnia & Herzegovina
In accordance with the Act on Transmission of Electric Power, Regulator and System Operator in Bosnia and Herzegovina („ Official Gazette of BiH“, no. 7/02 and 13/03) and the Statute of the State Electricity Regulatory Commission (SERC)(„ Official Gazette of BiH“, no. 41/03), the State Electricity Regulatory Commission in its full composition (Commissioners and all employees) continued to work on August 1, 2004. During the initial period of work after the establishment (September - October), educational courses from the following areas have been completed:
- Overview of tariff methodologies and tariff design for transmission companies,
- Theory and practice in activities relating to licenses in the power sector.
In November, following one-month hearings held in the major industrial centers in BiH (Mostar, Banja Luka, Tuzla and Sarajevo), the following documents have been adopted:
- Procedural Rules of the State Electricity Regulatory Commission,
- Arbitration Rules of the State Electricity Regulatory Commission.
In accordance with the adopted documents, work and decisions of the regulator are open to the public, whose interested members are enabled to actively participate in the public process of creation of rules and regulations issued by the SERC.
The current activities of the SERC include:
- Extension of the initial licenses of the transmission companies,
- Creation of the set of tariff documents, the key document being the Methodology for Calculation of Tariffs for Transmission,
- Creation of License Rules.
Beside the SERC’s activities in the power sector of BiH, the establishment of the single transmission company at the level of BiH seated in Banja Luka, and the Independent System Operator (ISO) seated in Sarajevo, is in progress. The completion of the establishment and commencement of work of the abovementioned institutions are expected by June 2005.
The relevant activities from the previous period which should be pointed out are:
- On October 10, 2004 the reconnection of two UCTE zones took place, without major disturbances in the operation of the transmission system and supply of customers. After the successful reconnection, following the recommendation of the UCTE Management Board, the dry run was declared until November 1, 2004, after which the exchange of electric power will be allowed through the connection of the former two UCTE zones.
- On November 3, 2004, the dry run of the transmission line 2x110 kV successfully started, which is the connection of the newly built hydro-plant Pec-Mlini, 2x15 MVA, to the transmission network. The planned annual generation of the hydro-plant Pec-Mlini is around 82 GWh.
Bulgaria
The State Energy Regulatory Commission /SERC/ was set up in September 1999 by virtue of the then adopted Energy and Energy Efficiency Act.
Nowadays, it is an independent authority under direct subordination to the Council of Ministers, consisting of 7 Commissioners and having 80 specialists at its disposal of different backgrounds divided into six divisions.
The Commission ensures financing for its operations by retaining part of the collected license fees in accordance with a budget approved by the Ministry of Finance.
A key role in SERC activities play the powers granted to it under the new Energy Law: to independently develop secondary legislative acts and to adopt and amend the rules, directions and other administrative acts for the discharge of its regulatory functions.
Along the main lines of the work of Bulgaria’s regulatory authority is ensuring a balance between the interests of energy companies and consumers of electricity, heat and natural gas. For this purpose, a dedicated consumer complaints unit has been set up in its structure.
In conformity with the requirements of the EU Directives, steps have already been taken to create and develop an electricity market. A time schedule has been adopted, which envisages opening for all electricity consumers by 2007 with the exception of the residential ones.
The liberalization of the natural gas market is related to the holding of competitions for selection of investors for the gas distribution regions.
The licenses granted to energy companies in the country are being brought into line with the requirements of the new Energy Law, which has been harmonized with the EU Directives on internal electricity and gas markets.
By reason of market demands and the requirements of international institutions, a three-year time schedule for the increase of the price for electricity and heat for residential consumers was developed and successfully implemented, which at this stage is already complete.
As a result of consultations held and researches made to stimulate the development of renewable energy sources, the Regulatory Commission has approved preferential prices for electricity generated from renewable sources.
In the past five years, the activities of the State Energy Regulatory Commission gained wide recognition from its international counterparts. It is among the founding members of the association of the energy regulators from Central and Eastern Europe (ERRA), works successfully under a wide range of programs with the regulatory authorities of the Netherlands and New Jersey, USA.
The recent missions of the IMF and the World Bank expressed a high opinion of SERC activities.
Czech Republic
The Electricity Industry
An amendment to the Energy Act is currently being drafted. It is to come into effect on
1 January 2005 and reflects the experience with the liberalization of the Czech energy sector and the implementation of the new European legislation.
The beginning of the second last stage of electricity market opening will start on 1 January 2005. All final customers except households are becoming eligible customers. This represents another step towards market liberalization, offering the choice of their electricity supplier to a large group of customers.
In 2004, the Energy Regulatory Office (ERO) has reviewed the current principles of regulations, which has been applied in the first regulatory period, and new regulatory principles for the second regulatory period are being set at present. The second regulatory period will start on 1 January 2005 and last until the end of 2009. The ERO applies the principles stemming from Regulation No. 1228/2003/EC and other amendments to the EU Directives.
As market liberalization progressed, the ERO has amended its decree that lays down the rules for electricity market organization, providing for new principles of market functioning in the amendment, including the method of the creation of the on-the-day electricity market and electricity trading thereon.
The ERO has drafted a decree on electricity quality, which introduces new general standards for electricity quality. The decree is ready for enactment after the amendment to the Energy Act is passed.
In the Czech Republic, the prices of energy are influenced by the dominant electricity generator and the generally rising trend in electricity prices on the European markets. Since all eligible customer buy electricity on the free market and the price of energy is set in bilateral contracts or on the basis of the prices on spot markets, it is not possible to provide any clear indication of whether prices to eligible end customers will rise or drop. In 2005, prices to protected customers connected to low voltage are rising by 4.3% for households and by 9.0% for low-demand businesses. This growth is mainly attributable to the increase in the prices of electricity generation that is not regulated by the ERO. The increase of the main regulated components of the final price charged to the final customers connected to low voltage such as transmission charges, distribution charges and system services charges is only 2.5% (lower than the inflation rate in the Czech Republic).
The Gas Industry
In connection with the start of gas market opening on 1 January 2005 and the draft amendment to the Energy Act, the ERO is preparing a decree on the organization of the gas market.
This decree will lay down in great detail the obligations, rights and mutual relationships of gas market participants in connection with the emergence of eligible customers and the opening of access to the transmission system, underground gas storage facilities, and distribution systems. The decree’s effective date will be tied to the effective date of the amendment to the Energy Act.
For the above reasons, the ERO is also drafting amendment to the decree in place on regulatory reporting and accounting. The Amendment to the decree on price regulation has already been made and approved.
The principal price distortions were remedied in 2002, and so the full re-balancing of regulated prices in the gas industry is complete now. The ERO is therefore creating the basic preconditions for the functioning of the open Czech gas market through both its legislative activities and specific decisions on prices.
New appointments of ERO
On September 1, 2004, a new Chairman of ERO was appointed by the Government for a term of five years – Mr. Josef Fiřt.
Georgia
1. About GNERC of Georgia decisions within the past three months.
Within the last three months, the Georgian National Energy Regulatory Commission (GNERC) adopted eight decrees and made 20 decisions related to key issues of the country’s energy sector.
Specifically, the following documents were adopted: “Rules for Natural Gas Utilization”; activities of small licensees was put in order in the electricity distribution sector; to improve functioning of the electricity wholesale market changes were made in the Market Rules; a license was issued and the tariff was approved for electricity generation by Khadori hydro power plant – the first Georgian power plant that was put into operation after the country gained its independence; the basis for adjusting tariffs was specified in the tariff methodology for natural gas in connection with changes in the national currency exchange rate, etc.
2. About personal changes in the GNERC within the past three months.
During the past three months no personal changes took place in the composition of GNERC.
3 Brief article about current activities of GNERC and about events in the country in the area of regulation.
Energy regulation in Georgia exists for more than 7 years already. The Georgian National Energy Regulatory Commission is the first state natural monopolies regulatory body. Within a rather short period of time the GNERC carried out a lot of work on implementing brand new approached to creation of relevant institutional and legal basis in the country.
However, due to the serious problems existing in the sector (size of tariffs, unstable electricity supply) lately, the GNERC is heavily criticized. The issue of limiting its rights and duties is being discussed. Unfortunately, it is the initiative of the Ministry of Economic Development. The main emphasis is put to doubts concerning independence and funding of the Commission, and refutation of ungrounded claims leads to serious waste of working time. The World Bank, `UISD~ and other organizations support GNERC.
For more information, please visit: http://www.gnerc.org
Hungary
The Hungarian Energy Office celebrated the 10th anniversary of its establishment on 10 September 2004. ERRA Chairman, Mr Vidmantas Jankauskas also delivered a speech on the celebration. More than 250 guests respected the HEO with its presence including also the regulators of the neighboring countries.
Hungary has had informal meetings with the DG Competition on the acknowledgement and reimbursement of stranded costs.
The legal background of the introduction of trade of greenhouse gases to be launched from 1 January 2005 has been prepared.
For more information, please visit: http://www.eh.gov.hu
Latvia
Competition recognized in liquefied petroleum gas market
In order to avoid market overregulation, the Board of the Public Utilities Commission adopted a decision that liquefied gas (propane) retail prices will be determined by the competitive market.
More than 50 retailers operate in the liquefied petroleum gas retail market and there is active competition. The Competition Council has also recognized the existence of competition in the retail sector.
Price monitoring will be maintained in the wholesale market and for supply from group installations in residential districts.
On 11 November 2004, the Regulator approved the new Liquefied gas tariff calculation methodology. According to this methodology, liquefied gas wholesale and retail are separated by applying different regulation principles for each type of activity. Moreover, the methodology envisages detailed cost accounting and control over distribution service providers, which supply gas from group installations. Such approach is justified as these consumers are connected with one specific supplier. Liquefied gas supply in cylinders is provided by several suppliers and the consumer has the choice option. In retail, the price will be determined by the competition among market participants. As before, wholesalers will operate with an approved maximum tariff. Such tariff setting approach gives the Regulator an opportunity to be flexible with changes in the market, at the same time decreasing the administrative burden for companies.
For more information, please visit: http://www.sprk.gov.lv
Lithuania:
In July 2004, the Seimas (Parliament of Lithuania) passed the Law on Electricity.
Electricity network companies set the new electricity prices since 01/01/2005, according to the NCC approved “prices caps”. Forecasted average price increase – up to 8 %.
By the new Electricity Law the NCC shall issue the license for electricity market operator and later to control the licensed activity. From 2004-01-01 all electricity consumers, except residential became eligible consumers.
Ignalina nuclear power plant Unit I should be closed at the end of 2004.
The NCC last time during 2002-2005 regulated period in November did corrections for gas price caps and approved new gas prices for JSC “Lietuvos dujos” regulated consumers.
On the same time was approved investment project regarding increasing transfer capacity for gas pipeline to Kaliningrad region. The NCC recognized that this investment project is reasonable to include costs to the gas prices caps calculation for the new regulated period.
For more information, please visit: http://www.regula.lt
Macedonia
Recent developments in the energy sector of the Republic of Macedonia
The Macedonian Energy Regulatory Commission would like to inform you about the key changes, personnel changes and other important changes within the past three months:
Key Changes in Energy sector of the Republic of Macedonia:
· The new Law for restructuring of ESM (Macedonian Electricity Company) was adopted by the Macedonian Parliament. One of the main points of the law is the establishment of legally separated transmission system operator.
The restructuring of AD Electric Power Company of Macedonia shall be conducted pursuant to the Decision of the Government of the Republic of Macedonia for separation of the company in two joint stock companies, such as:
- The Macedonian Electric Power Company, a Joint Stock Company for Power Generation, Distribution and Supply in State Ownership-company having an abbreviation title- AD ESM and,
- Transmission System Operator of Macedonia, Joint Stock Company for Power Transmission and Electric Power System Management in State Ownership-company having an abbreviation title AD MEPSO.
· The Parliament of the Republic of Macedonia has approved the percentage of the benefit from the total annual income of the companies carrying out an energy related activity for financing of the Energy Regulatory Commission for 2005 to be 0,053 %. The current percentage for 2004 is 0,064 %.
The financial plan of the ERC for 2005 was approved by the Parliament of the Republic of Macedonia.
Personnel Changes:
ERC Commissioner Mr. Branko Brajkovski on the basis of a Government proposal was re-elected by the Macedonian Parliament decision from 24.09.2004 (Official Gazete no.66/04) for a five year term. Therefore, the present personnel structure of the ERC is the following :
Commissioners:
- Mr. Slave Ivanovski, Chairman
- Mr. Radomir Cvetkovic, Vice-Chairman
- Mr. Branko Brajkovski, Commissioner
- Mr. Murat Ramadani, Commissioner
- Mr. Vladko Gavrilov, Commissioner
Energy - Technical department:
- Mr. Strasho Zafirovski - head of department
- Mr. Marko Bislimoski - advisor
- Mr. Slavko Bundalevski - advisor
- Ms. Julijana Dimoska - expert
- Ms. Natasha Trimceska - expert
Economics Department:
- Ms. Evgenija Kiprovska - head of department
- Ms. Andrijana Nelkova - advisor
- Mr. Samil Redzepi - expert
Legal Department:
- Mr. Enver Elmazi - advisor
- Mr. Daniel Georgievski - expert
Administrative-technical department:
- Ms. Aleksandra Tasevska-Cvetkovska – Administrative Office Manager
- Ms. Gordana Oncevska – Accountant
- Mr. Vanco Asenov - Driver
With those changes, the new organizational chart for ERC has been improved and is more complete and adequate for the Regulatory functioning.
Short Summary of recent energy-related activities:
Currently the ERC has established a several internal working groups, which are responsible for preparation of:
1. Pricing Methodology for different types of energy.
2. Tariff Code and different tariffs for Macedonian electricity sector.
3. Licensing rules and codes.
4. Rules and codes in gas sector.
5. Books of rules for the energy sector.
Other activities:
·At the beginning of September the EU funded project for development of the Regulatory Commission of the Republic of Macedonia with co-operation of the ERC and European Agency for Reconstruction has finished successfully.
The project had five tasks as:
1. Detailed Blueprint for the establishment and operations of the ERC
2. Screening of EU secondary legislation
3. Drafting of licensing and authorizations procedures
4. Monitoring of Compliance with authorizations and licenses
5. Tariffs and pricing methodology.
·The Energy Regulatory Commission of the Republic of Macedonia also participates in many activities regarding the national energy market regulation. The main purposes of those activities are fulfilled co-operatively with several advisory companies working in the Republic of Macedonia such are, Hunton&Williams and USAID.
Those activities are focused as follows:
1. Preparation of new Energy law of the Republic of Macedonia in co-operation with USAID and Hunton&Williams
2. Preparation of Electricity Market design in co-operation with USAID and Hunton&Williams.
3. Preparation of Draft Market design, participation in the MAKO-CIGRE seminars and meetings.
4. Participation at the SC C5 – Electricity Market and regulation meetings. The ERC representatives in those meetings gave the stationary and organizational information about the ERC.
5. Participation at the INTERNATIONAL SYPOSIUM “ENERGETICS – 2004” organized by MACEDONIAN ENERGY ASSOCIATION. Also in this symposium the information’s about the organizational structure and legal power of the ERC were presented with presentation prepared by ERC representative.
·We would like to announce that the Energy Regulatory Commission of the Republic of Macedonia (ERC) and the Vermont Public Service Board (PSB) are pursuing a Regional Energy Regulatory Partnership over the next two years.
The partnership is designed as a vehicle for the exchange of experience and information between U.S. and Macedonian regulatory bodies with the goal of improving regulatory practices and fostering long-term sustainable relationships between regulatory bodies in both countries. This partnership will allow the ERC to have broad access to US regulatory practices and will enable the PSB to learn new techniques and methodologies as well as gain an understanding of the international regulatory environment.
The first exchange took place in March 2004, during which a delegation from the PSB visited the ERC in Skopje. A delegation from the Vermont Public Service Board (PSB), consisting of Chairman Michael Dworkin; Commissioner David Coen; Commissioner John Burke; Ms. Sandra Waldstein, Utilities Analyst; and Mr. Kurt Janson, General Counsel; arrived in Skopje on March 20, 2004 to begin the first partnership activity with the Energy Regulatory Commission of the Republic of Macedonia (ERC).
The second partnership activity was held in Montpelier in June 2004. The ERC delegation consisted of Chairman Slave Ivanovski, Vice-Chairman Radomir Cvetkovic, Commissioner Branko Brajkovski, Commissioner Vladko Gavrilov, and Commissioner Murat Ramadani. The visit focused on the topics of quality regulation, low-income consumption programs, service reliability, consumer protection, and the relationships with regional market operators for specific regulatory objectives.
During late October 2004 the delegation from Vermont Public Service Board (PSB) was in Macedonia for the third partnership activity. During these meetings (one week) the partners covered several themes and energy issues regarding the latest situations into the energy field. Many effective issues were analyzed and discussed. This activity focused on the topics of pricing and tariff design.
The next meeting will be held in Vermont (USA) during May 2005.
For more information, please visit: http://www.erc.org.mk
Moldova
In October 2004, the National Energy Regulatory Agency of Moldova (ANRE) approved a revised version of the Regulation on Electricity Supply and Utilization, which has to clarify relations between consumers and suppliers and to eliminate certain abuses on behalf of the latter identified during two years that passed since this regulation was approved.
A whole set of innovations are meant to improve efficiency of fighting against stealing of electricity and to eliminate any possibility of unjustified accusation of consumers in unlawful consumption of electricity. In addition, this normative act contains certain specifics concerning actions of the supplier in the course of investigation and calculation of illegal consumption of electricity, and more detailed information about the procedure of suspension of electricity supply and disconnection of consumers.
At present, specialists of ANRE are working on improving the Regulation on Supply and Utilization of Natural Gas, and Regulation on Quality Indices of Electricity Supply at Regulated Tariffs.
In November, ANRE took an active part in resolving a conflict between the main supplier of electricity the Moldovan GRES (state regional power plant) and private distribution companies UNION FENOSA; that conflict led to mass outages for consumers from Central and Southern Regions of the Republic of Moldova. The conflict occurred as the Moldovan GRES (state regional power plant) unilaterally terminated the contract on electricity supply and wanted to supply electricity at much higher prices. The situation was aggravated by the fact that due to technical reasons it is impossible to purchase electricity from Ukraine.
As a result of lengthy negotiations with participation of ANRE management, the parties signed a new contract on purchase of electricity at 3.05 U.S. cents/kWh, which exceeds the previous price by 18 %. However, it would not lead to increase of tariffs for end-users due to lower national currency foreign exchange rate than it was in the previous tariff.
On November 29, 2004, the Agency approved a new methodology for determination, approval and application of tariffs for public services in the area of water supply, sewage and waste water treatment; this methodology is aimed at improving the quality of the named services.
For this purpose, the new methodology fosters enterprises’ own investments in the sector development and sets principles for calculation and application of tariffs for the said services.
Poland
The most problem facing the Polish electricity sector remains the termination of the long term PPAs, which are preventing effective functioning of competition. According to the latest available information, the government is planning to request generators to dissolve LT PPAs voluntarily. If the European Commission agrees, the generators would receive compensation in the form of a public aid. The scheme would eventually be implemented in the second half of 2005.
The opening of the electricity and gas markets for non-household customers has brought about results far from satisfactory .The main reason for that is a very strong market power of traditional suppliers, especially in the gas sector.
The President of the Energy Regulatory Office, Dr. Juchniewicz, has approved a grid code elaborated by the Polish electricity TSO. A gas grid code is now under preparation.
The Polish TSO PSE Operator has started in Prague coordinated capacity auctions in cross-border electricity trade.The Treasury Ministry has elaborated a privatization program for the power sector in 2005. A few power plants, including giant Southern Energy Concern and monopolistic Polish Oil and Gas Company are to be privatized next year.
For more information, please visit: http://www.ure.gov.pl
Romania ANRE
Key changes, rulemakings or decision within the past three months
The electricity market was further liberalized by Government Decision no. 1823/2004 to 55% of the final consumption of 2003. ANRE will no more qualify eligible consumers, all end-users with consumption equal or greater than 1 GWh /year will be declared eligible. The suppliers for captive consumers will keep the actualized list of eligible consumers in each one area.
A new revised Grid Code was issued at the end of August in line with the UCTE requirements.
In order to launch the new trading platform starting with January 2005, the Commercial Code was revised and approved by ANRE Order no. 25/22.10.2004. The wholesale electricity market comprises of the following specific markets: a Bilateral Contracts Market, a voluntary Day-Ahead Market (DAM), a compulsory Balancing Market and an Ancillary Services Market. The participants on the electricity wholesale market are legal persons, Romanian or foreign, licensed parties, registered as: participants in the DAM, participants on the balancing market, auction participants and balance responsible parties. Allocation of the interconnection capacity for import is done by implicit auctions, distinctively for: imports realized through contracts, for periods of up to one year and transactions on the DAM for non-allocated capacities. For export the interconnection capacities are allocated according with rules established by the neighboring TSOs and by implicit auctions on DAM for non-allocated quantities.
In this period, ANRE’s efforts were concentrated on encouraging the application of the hourly settlement on the wholesale electricity market based on the metering investments carried out by the TSO and DSOs in order to increase its efficiency.
In November, ANRE issued the methodologies for setting up transmission and distribution tariffs based on cap regulation. A revenue cap methodology was applied for the transmission tariffs and a price basket approach was applied for distribution tariffs. The length of the regulatory period was increased to 3 years in the first regulatory period and 5 years for the following periods, length that maintains incentives for operators to improve efficiency since middle-term profits will not be completely passed through on to customers. The new transmission and distribution tariffs will be in force starting with January 2005.
In order to support cogeneration power plant activity, rules for qualification of efficient cogeneration schemes were issued by ANRE Order 33/2004. The capacity maintained in reserve by cogeneration power plants qualified as efficient will be paid as an ancillary service by the TSO.
The process of certification of the electricians and sector companies involved in designing, constructing, verifying and operating energy capacities, respectively facilities was launched in line with the Electricity Law requirements.
Personnel Issues or changes (i.e., new President, Parliament etc.) within the past three months
Government Decision no. 1816/28.10.2004 approving the Organization and Operation Rules of the Romanian Energy Regulatory Authority –ANRE;
ANRE Decision no.432/18.11.2004 approving the organizational chart of ANRE.
ANRE is reorganized in two regulatory departments: Infrastructure & Authorization and Energy Market Operation & Development and two additional support departments: Communication, Cooperation and Consumers Protection and Management & Resources.
Mr. Adrian Borotea was appointed by Prime-Minister Decision no. 203/14.10.2004 as vice-president of ANRE. Mr. Borotea was the former adviser of the Director General of Prices, tariffs and Economical Analysis Department and he is working in ANRE starting with year 2000.
Electricity produced from Renewable Energy Sources (RES-E)
Two Government Decisions were issued related with the promotion of RES-E:
Government Decision no. 1429/02.09.2004 approving the rules for issuance guarantees of origin for electricity produced from renewable sources;
Government Decision no. 1892/04.11.2004 approving the promoting system of electricity produced from renewable sources.
The support scheme is a quota-based system developed through a market of green certificates. The certificates will be issued monthly for RES-E producers by Transelectrica – the Romanian TSO and the green certificates market will be administrated by OPCOM – the Market Operator. A part of the costs of producing electricity will be covered by selling the green certificates at market prices. Another part will be financed through an obligation on suppliers to purchase a certain amount of green certificates from RES-E producers according to a fix percentage of their total electricity supply/consumption. 2005 will be the first year for support scheme application. The wind, solar, biomass sources and hydropower plants with an installed power less or equal with 10 MW, installed or refurbished starting with 2004, are envisaged for support.
Based on the GD no. 1429/2004, ANRE issued the Order no.23/2004 regarding overseeing issuance guarantees of origin for RES-E process.
Privatization of distribution
The privatization process of Electrica Moldova and Electrica Oltenia is going on. Electrica Oltenia is the largest of the eight branches the national power distributor has. The CEZ and E.On groups submitted binding offers for both companies at the beginning of November. Electrica Oltenia and Electrica Moldova have been put on sale at the beginning of April this year, with the state selling directly 24.62 of the shares, with the buyer being compelled to increase the share capital to give it a 51 per cent stake.
Resynchronization of the two UCTE zone
Resynchronization of the two UCTE zone was achieved on October 10 2004, with an important contribution from the Romanian TSO - Transelectrica. The resynchronization is the prerequisite for the progressive integration of the South European Electricity markets into the wider-than-EU market of the UCTE zone and will contribute to the security of supply in the whole region.
Transelectrica joins ETSO
National power grid company Transelectrica became a full-right member of the European Transmission System Operators Association (ETSO). For any company to be able to become a member of ETSO, several preconditions need to be fulfilled, including the license for electricity transmission, to be a member of the European Union and not to produce energy. Despite Romania not being an EU country, Transelectrica was allowed to join the organization as the negotiation for the energy chapter within the accession negotiations has been already closed. Transelectrica is also a full member of UCTE - the Union fort Coordination of Transmission of Electricity, since May 2003. Romania thus becomes the only country in southeastern Europe to become a full-member in both European electricity organizations.
For more information, please visit: http://www.anre.ro
Romania ANRSC:
· The licensing process
By licensing process – which is evolving pursuant to the Regulation for granting the licenses and authorizations in municipal services sector, the conditions for suspension, withdrawal or amendment, approved by Order 140/2003 of ministry of public administration – ANRSC analyze the managerial, financial and technical capability of the operators in order to supply the district heating services and having regard to insurance of the economical efficiency, the expected level of the supplying services and the protection of the consumers interests.
In the last three months there granted 52 functioning licenses and 1 temporarily functioning authorization. From these 3 functioning licenses and 1 temporarily functioning authorization were granted for district heating operators.
· The monitoring and control process
The organization of the territorial coordination, guidance and control activity is evolving bases on the following:
· identify municipal services operators, the type of their activities, activity area, services quantity and quality and also prices and tariffs practice;
· identify also the commercial firms, which mount and exploit the systems for the repartition of costs for heating and hot water;
· monitoring the fulfillment of the requirements regarding the licensing process for the operators and also the obligations established by municipal services delegation contracts concluded with local public administration authorities;
· monitoring the fulfillment of the obligations regarding the restructuring, improvement an reinvestment programs for the municipal services operators with clear consequences for increasing the quality and decreasing the real costs for the consumers benefit;
· verifying the municipal services operators’ activity as a result of the complaints sent by consumers, companies and institutions;
· monitoring the bids for the delegation of municipal services management;
· monitoring the investments financed from their own sources or from the sources constituted according to the legal provisions, their effects and services improvement and/or costs decreasing.
· Endorsement / approval of prices and tariffs
The endorsement is made after an economic analysis of the proposals made by the operators, taking into account the following components of the production costs:
· operating and production costs;
· maintenance and repairs costs;
· amortization of fixed and tangible assets;
· obligations regarding the delegation contracts that include level of interests and loans reimbursement in order to determining the sources for development and improvement of the technical and urban system.
In the last three months there were endorsed / approved 138 prices/tariffs, from which 51 approvals were for district heating operators.
DISTRICT HEATING DOMAIN
· New regulation
Pursuant to provisions of the Government Decision no 933/2004 regarding the metering of the district heating system consumers, ANRSC elaborated the following regulations:
· The methodology for the repartition and invoicing of thermal energy individual consumptions in condominium buildings;
· The framework contract for supplying the thermal energy for urban consumers;
· The framework convention for individual invoicing of thermal energy consumptions, annex to the framework contract for supplying of thermal energy for urban consumers;
· The technical normative regarding the conditions for mounting and exploitation of the systems for the repartition of costs for heating and hot water.
These regulations were approved by ANRSC president’ Order no. 233/2004 and were published in Romanian Official Gazette no 862/21.09.2004 and regulate the technical and organizational requirements which must be fulfill in order to evolve in optimal conditions the repartition and invoicing of thermal energy individual consumptions activity and the unitary legal framework regarding the new relations which are established between thermal energy suppliers, owners associations, individual thermal energy consumers and the commercial firms which mount and exploit the costs repartition systems also.
Also, pursuant to the provisions of The methodology for repartition and invoicing of thermal energy individual consumptions in condominium buildings, ANRSC also elaborated The technical norms regarding the authorization in the domain of mounting and exploitation of the systems for the repartition of costs for heating and hot water. This regulation was approved by ANRSC president’ Order no 259/2004 and was published in Romanian Official Gazette no 979/25.10.2004 and create an unitary framework in order to regulate the way of granting the authorizations for legal persons who mount and exploit the systems for the repartition of costs for heating and hot water.
Events
The ANRSC’ representatives met with representatives of International Monetary Fund and of World Bank in order to discuss about ANRSC’ activities generally and about the state of district heating system in Romania specially.
The ANRSC’ representatives attended on October 25-26, in Zagreb Croatia, to the ERRA Tariffs / Pricing Committee.
For more information, please visit: http://www.anrsc.ro
Russia/IAREC:
There were no key changes in our association, neither did any personal changes occur.
Activities in the following areas:
§ providing legal assistance in the course of RECs transition to professional basis and when they gain status of independent legal entities;
§ contractual work on lawsuits (preparation of the full package of documents for case hearings in courts, presentation of clarifications and consultations during court proceedings up to the moment the court makes a final decision);
§ serving as third party arbitration courts;
§ conducting expert evaluation of programs, documents, decisions, socially important projects
§ providing consultations to IAREC members on legal and economic issues related to functioning of the fuel and energy complex;
§ organization and conducting conferences, roundtables, discussions and workshops on issues related to the fuel and energy complex;
§ development and submission to state bodies proposals on improvement of methodology and law enforcement regulatory practice, professional activities of regulatory bodies;
§ arranging for training of Russian fuel and energy complex specialists at the chairs of the State management of natural monopolies of the Russian Academy of Entrepreneurship (on the basis of the agreement between RAE and IAREC), postgraduate courses for such specialists.
1. A single tariff body was established; it regulates all natural monopolies, including transport, communications, etc.
2. The federal body sets cap tariffs for electrical and thermal energy in the retail market not just for one year, but for two and more.
For more information, please visit: http://www.mtu-net.ru/marek
Slovakia
The new laws for energy sector in the Slovak Republic were passed recently, implementing the EU directives. On October 21st, 2004 three government bills were approved in the National Council of the Slovak Republic:
1. The Amendatory Act of the Act 276/2001 Coll. on Regulation in Network Industries and on Amendments to Certain Acts in the wording of later regulations;
2. The government bill (the Act) on Heat Power Engineering and on Amendments to the Act of the National Council on Prices, No. 18/1996 Coll., in the wording of later regulations;
3. The government bill (the Act) on Power Engineering and on Amendments to Certain Acts.
Coming into efficiency from January 1, 2005, they will fully sustain the liberalized energy market.
There are the Government Decrees on Rules on Gas Market and on Electricity Market under preparation supposed to be valid within 3 months after the Acts come into force. The Regulation shall cover in detail the conditions of trading in the markets with energy, including the mutual relations between producers, operators, customers and traders. They are aimed at ensuring the market operability on transparent and non-discriminatory basis. The final version shall be submitted in January for comments and subsequently for approval of the government.
Following the approval of the decrees, the operators in the electricity and gas sectors shall submit the RONI within two months from the date of the rules entering into efficiency their operation codes binding for all the market players. The positive decision of the regulatory authority shall conclude the process related to the secondary legislation in energy. The new decrees that determine the method of regulation in electro-energy, heating and water-powered sectors, have been issued by the RONI.
The new president was elected in national elections held on April 17, 2004 in the Slovak Republic. The inaugural of Doc. JUDr. Ivan Gašparovič, CSc., the new president, took place on June 15, 2004.
The new laws for energy sector in the Slovak Republic were passed recently, implementing the EU directives.
On October 21st, 2004 three government bills were approved in the National Council of the Slovak Republic:
4. The Amendatory Act of the Act 276/2001 Coll. on Regulation in Network Industries and on Amendments to Certain Acts in the wording of later regulations;
5. The government bill (the Act) on Heat Power Engineering and on Amendments to the Act of the National Council on Prices, No. 18/1996 Coll., in the wording of later regulations;
6. The government bill (the Act) on Power Engineering and on Amendments to Certain Acts.
Coming into efficiency from January 1, 2005, they will fully sustain the liberalized energy market.
There are the Government Decrees on Rules on Gas Market and on Electricity Market under preparation supposed to be valid within 3 months after the Acts come into force. The Regulation shall cover in detail the conditions of trading in the markets with energy, including the mutual relations between producers, operators, customers and traders. They are aimed at ensuring the market operability on transparent and non-discriminatory basis.
The final version shall be submitted in January for comments and subsequently for approval of the government.
Following the approval of the decrees, the operators in the electricity and gas sectors shall submit the RONI within two months from the date of the rules entering into efficiency their operation codes binding for all the market players. The positive decision of the regulatory authority shall conclude the process related to the secondary legislation in energy.
The new decrees that determine the method of regulation in electro-energy, heating and water-powered sectors, have been issued by the RONI.
Recently the decisions on transmission tariffs in electricity, on providing ancillary services, transmission system access (two-part tariffs – maximum performance and the transmitted electricity) and on transmission losses were made by the Regulatory Office for Network Industries. Comparing with 2004, all the tariffs are under the 2004 level.
This year the RONI completed the price regulation for supply of electricity for all the eligible customers except for residential customers (households).
Currently the tariffs on providing distribution services are under preparation of the RONI for DSOs.
The Regulation Board of RONI is expected today to approve the 2005 tariffs on gas transmission and supply, on December 3rd the tariffs on distribution of gas are expected to be approved.
In connection with the development strategy of the SR in electric energy the process of privatization arrangement of the dominant electricity producer – Slovenské elektrárne, a.s. is very important. Upon the tender evaluation the Italian company ENEL has been chosen as a strategic investor. Currently the negotiations are held between the Government of the SR and the strategic investor related to the sales conditions of 66% of the SE, a.s. shares.
The new president was elected in national elections held on April 17, 2004 in the Slovak Republic. The inaugural of Doc. JUDr. Ivan Gašparovič, CSc., the new president, took place on June 15, 2004.
For more information, please visit: http://www.urso.gov |
