State regulation in the electricity sector does not achieve the goal in 96% of cases, and 26% of acts are outdated and illegal

26-06-2017

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Electricity is a critically important commodity for economic performance. However, one in four of 94 legislative acts defining the rules of the market operation is outdated and/or illegal. The current state regulation is not able to provide the balance of interests in the retail electricity market and provide the full access to the electricity supply and affordable prices for consumers, as well as the efficiency of business activities and conditions for the development of energy companies.

These are the conclusions of the analytical research “Retail electricity market” prepared by Better Regulation Delivery Office (BRDO) in the Green Paper format. BRDO experts conducted a rolling review of the market regulation quality and analyzed the rules regulating legal relations of its members with the view of the efficiency, corruption risks, usefulness for the business and practicability.

Analysis results prove that the most of regulatory instruments have been chosen improperly, and the procedures of their use have significant drawbacks, many standards are spontaneous and unstructured. Problems are aggravated by the influence of a range of political and economic factors that led to negative development trends in the electricity sector:

  • decline in the overall production and electricity consumption;
  • sharp increase in prices and tariffs;
  • uncertainty of regulatory environment;
  • increased concentration in electricity supply.

The proposed version of the Green Paper is aimed at searching and analysing problems related to applying regulatory instruments of the retail electricity market, including natural monopolies, in particular licensing, control over pricing, market volumes and quality of goods (services) sold there.

With the research publication, we launch online consultations as the part of the Public Dialogue on this issue.  Results of consultations and a series of roundtable discussions with stakeholders in this sector will form the basis of proposals to change the regulatory rules and reform the electricity market.

Visit the Effective Regulation Platform regulation.gov.ua, learn more about the research “Retail electricity market” and join the discussion!

Your opinion is very important to create the better regulation and the favorable business environment in Ukraine!

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