Experts and people's deputies unite efforts for the establishment of an independent regulator in the energy sector

04 September 2015

The Strategic Advisory Group on elaborating draft law No. 2966 "On Energy Regulator" commenced operations in Ukraine. Olena Pavlenko, the President of DiXi Group Think Tank, informed thereof during a briefing at the Ukraine Crisis Media Centre.

"When a football match is going on, it is very important to know how the referee works. The higher the stakes are in this game, the more attention must be paid to the professional competence of the referee. Energy, i.e. gas, electricity and public utilities market, is a game with extremely high stakes because it concerns people's safety. And the referee who must watch all the players in this market, should certainly be as professional, independent and fair as possible", said Olena Pavlenko.


The Strategic Advisory Group included representatives of interested factions of the Verkhovna Rada, representatives of international associations of regulators, the Energy Community, European Commission Support Group for Ukraine, representatives of embassies, as well as Ukrainian experts in energy sector and regulation.


Parliamentarians, members of the group, agreed that the work on the draft law must be as depoliticised as possible, since excessive policy would just harm the future regulatory act and, therefore, the future work of the regulator. 
"There is a gas market, there is an electricity market, and there is a huge market of local municipal electricity. If there was no midpoint in this triangle, that is an independent and professional regulator, the whole model of energy in Ukraine would not work", said Oleksandr Dombrovskyi, a People's Deputy of Ukraine (Petro Poroshenko Bloc), the first Deputy Chairperson of the Committee on Fuel and Energy Complex, Nuclear Policy and Nuclear Safety of the Verkhovna Rada of Ukraine, coordinator of the inter-factional group "For Energy Independence".


"As we form the law on the national regulatory authority, it will be very important to focus on how the operating rules of this authority will be worked out, since these are fundamental things: the rules under which the regulator operates, transparency and openness of the activities, as well as mechanisms of appeal against decisions by all the participants, namely consumers, monopolies, and the state, if any questions arise. The draft law which became the basis for our discussion did not clarify these issues", stressed Aliona Babak, a People's Deputy (a representative of "Samopomich"), Deputy Chairperson of the Committee of the Verkhovna Rada of Ukraine for Construction, Urban Development and Housing and Utilities.


"It is sad that the expert discussion, which is now taking place in the group, did not take place when the draft law had just come out of the Cabinet of Ministers. The people's deputies were partly excluded from participation in the development of the law. And now, according to the results of the group activities, I can say that I have no doubt that we'll get a really professional document", said Oleksii Riabchyn, a People's Deputy (the All-Ukrainian Union "Batkivshchyna"), a member of the Committee on Fuel and Energy Complex, Nuclear Policy and Nuclear Safety.

"Energy Sector is certainly the most corruptogenic: it generates both large funds and a strong desire to use them at the level of shadow schemes. Without adopting an adequate law on a truly independent national regulator, all other reform laws that govern or regulate natural gas and electricity markets, rates, etc. in the energy sector, will remain just half-measures. The adoption of such law will be a real blow to corruption in this sector. It is hoped that the creation of the Strategic Advisory Group in cooperation with the International Renaissance Foundation will help to unite the best Ukrainian and international experts as well as people's deputies who care for the purpose of adopting the necessary amendments to the Energy Regulator Law by the Verkhovna Rada", said Yevhen Bystrytskyi, Executive Director of the International Renaissance Foundation.


The work of the Strategic Advisory Group will result in the preparation of a list of bottlenecks related to the draft law and relevant proposals of amendments. In the long term, the creation of a regulatory framework for the introduction of an independent regulator will ensure effective regulation of energy markets, creation of a clear and understandable framework of the market players' activities, as well as trust on their part and on the part of end users.

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