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 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.   

ERE has completed certification of the national gas and electricity transmission system operators and ranks among those regulators that have transposed the Network Code Regulations. However, ERE fails to enforce unbundling of the electricity distributor OShEE since 2015. On the contrary, the regulator via a formal decision accepted a further delay until the end of 2019. This is not the only decision that gives the impression of alignment with a related position of the Ministry. This is a critical development for the independence of ERE. On the positive side, ERE showed regional commitment by refreshing its involvement in ECRB.