Regulatory authority

State of compliance

The Energy Regulatory Entity (ERE) has been set up in line with the acquis with the exception of a rotation scheme for Board members that is not defined by law but is, nevertheless, applied in practice. The authority is headed by a Board of five commissioners. The current vacancy of one Board member has not had a negative impact so far but carries the potential of impeding decision-making in the light of a legally required qualified majority for decision-making. The term of Board members is limited to five years, renewable once. Management has autonomy in relation to the organisation of the regulatory authority’s internal structure including staff appointment and setting of salaries, defining the authority’s annual work programme as well as setting up and managing the annual budget. ERE is held accountable for its activities by having to present its annual report to Parliament.

ERE is equipped with all gas and electricity sector related competences required by the Third Energy Package, except for a few exceptions that have not been transposed explicitly, namely the obligations of ERE to comply with legally binding Energy Community Regulatory Board decisions, publish recommendations in relation to compliance of supply prices with public service obligation limits, impose measures to promote competition and, most importantly, require transmission and distribution system operators to change their terms and conditions. A serious concern is the failure of the Albanian gas and electricity sector legislation to comply with the penalty level defined by the Third Energy Package. The maximum penalty level at ERE’s disposal is below the required threshold which weakens the effectiveness of regulatory enforcement.   

On the performance side, ERE has proven technical regulatory knowledge and commitment to adopt an extensive set of secondary legislation in close consultation with the Secretariat.  The regulator completed certification of the national gas and electricity transmission system operators.  However, ERE so far failed to enforce unbundling of OShEE in line with the acquis. Also, it remains to be seen whether the regulator will show sufficient commitment to address complaints of market participants concerning potential market abuse on electricity wholesale level.  Room for improvement when it comes to the ability to fully employ its powers granted by law is certainly also a function of the lack of sufficient human resources.