Mediterranean
National Regulatory Authorities (NRAs) have comparable and satisfactory levels
of independence, a report by MEDREG, which presents the status of energy
regulation in the Mediterranean Basin, shows.
The MEDREG
Regulatory Outlook report, which was finalised in December and was exclusively
shown to New Europe on January 10, aims to provide a complete overview about
how the national energy sectors are ruled, ranging from independent entities to
governmental bodies. MEDREG is the Association of Mediterranean Energy
Regulators.
“It’s a
very important report because it is the first time we have a complete overview
of the energy regulatory framework in the Mediterranean,” MEDREG’s
institutional Working Group Chairman Nicolò di Gaetano said in an interview,
highlighting the main findings of the report.
He stressed
the importance of “a stable, long-term and transparent regulation” and
improving the regulatory framework in order to attract investment, to foster
competition and “to protect the consumers giving them cheaper energy and
security of supply”.
“Sometimes
there is the most important need of the independence of the regulator, to be
truly transparent, to be autonomous from political choice but just to approve
and to put in place evidence-based regulation so these are very good signals
for the transparency of the markets,” di Gaetano said.
According
to the findings of the Regulatory Outlook report, in most countries, national
energy regulatory issues are addressed by either primary (such as laws,
decrees, acts) or secondary legislation (such as regulations, codes, by-laws).
In terms of
independence, almost all MEDREG members are distinct and functionally
independent from any other public and private entity, the report shows. Almost
every NRA is autonomous with regards to carrying out any regulatory task.
In nearly
every NRA there are some formal rules that prevent the regulatory authority
staff such as board members and experts from having interests in regulated
utilities or occupying leading political functions.
According
to the MEDREG report, board members’ independence is safeguarded by law and an
internal regulation applies to staff members as well. Moreover, the regulatory
authority’s decisions are binding in every NRA, which is a significant
institutional power. As an indication of financial independence of the
regulatory authorities, almost every regulatory body is financed by own
resources.
Overall,
Mediterranean NRAs have comparable and satisfactory levels of independence,
which guarantees regulatory stability and neutrality and avoids situations in
which the decisions of the regulator are constantly modified or taken under
influence, according to the report, which shows that almost every NRA supports
full opening in the electricity and where possible gas markets.
With the
exception of Israel, Malta and Turkey, there are national timetables for the
full opening of the electricity and gas markets in all Mediterranean countries.
Market
opening is an extremely important feature for Mediterranean energy markets,
which are oriented towards increasing competition between utilities and
correspondingly improve the quality of service for consumers. In this sense,
answers shows that all the responded NRAs approve the necessity of market
opening in energy sector for the reason of its advantageous features and all
regulatory authorities cooperate with Competition/Anti-trust authorities, so as
to establish or maintain the competition environment, the report found.
The report
shows how the level of competence in tariff setting is satisfactory among the
NRAs, although some have room to improve their competences.
Regarding
the tariff-setting regime, there are some differences among the MEDREG
countries that responded to the questionnaire. As a general comment, almost all
NRAs have the power to fix and approve tariffs, although in several cases the
role of regulator could benefit from clarifications and improvements, according
to the report.
Not all
NRAs are responsible for dispute settlement between industry and customers.
Indeed, the report highlights that some NRAs may be entrusted with more powers
in terms of dispute settlement, according to the findings of the report.
Every NRA
that answered the questionnaire sets or approves rules regarding the management
and allocation of interconnection capacity. Every NRA indicated that they are
responsible for customer protection, although the level of responsibility
differs, especially in terms of addressing vulnerable consumers’ needs, the
report found.
The large
majority of NRAs has the power to decide on its own internal organisation. In
addition, most of NRAs decide on human resource policy.
All NRAs
have the power to sanction sector participants, however the extent of this
power widely differs and would benefit from further analysis.
Most NRAs
publish the information on the regulatory authority (missions, duties,
organization chart, and reports) and make these information available to
stakeholders, including the publication of an Annual Report and the regular use
of consultations to inform their decisions.
The
majority of respondents have reporting obligations to regularly report to
another public body such as government, ministry or parliament.
According
to MEDREG, the aim of this Regulatory Outlook report is to contribute to the
development of a more independent and solid governance model of regulation by
assessing the current situation of each MEDREG member regulator and help
identifying scope for improvement.
Each
regulator is analysed according to a number of dimensions – such as
independence, organisation, transparency and accountability. These features are
directly linked to the principles for good regulators defined by MEDREG
Members, in order to support the development and reinforcement of national
regulations along the same directions, in order to create a harmonised
environment to foster investments, competitiveness and consumer protection.
Taking into
account the work MEDREG carried out in 2014 to identify good regional
regulatory principles, this report was based on the answers to a questionnaire
divided into six sections, covering several aspects of national regulatory
frameworks: Independence, competences, internal organisation, enforcement,
transparency and accountability.
https://www.neweurope.eu/article/medreg-report-calls-stable-transparent-energy-regulation-mediterranean/