State of compliance
The Energy Regulatory Commission (ERC) is the single regulatory authority with nation-wide competences in electricity and gas. The legal basis for its operation, competences and set-up has been adjusted to the Third Energy Package only in May 2018. ERC is headed by seven commissioners, one of whom acts as president. The term of the commissioners is limited to a period of five years, renewable once.
The management has autonomy in defining the authority’s internal organisation even though its statutes formally require Parliament’s approval. This procedure could potentially put regulatory independence at risk, even though this has not been observed in practical terms so far. The legal reforms adopted in May 2018 did not introduce a selection committee of neutral experts for short-listing commissioner candidates but foresee appointment by Parliament based on a proposal of a governmental commission. The previously existing vague selection criteria, including an “integrity test”, have been eliminated and replaced by clear eligibility requirements. ERC ensures accountability of its activities by presenting its annual report to the Parliament, Ministry and Government.
ERC has already in the past proven its commitment to actively execute its duties within the legal limits in place. The rules introduced by the regulator for the liberalised market segment prove its expertise and commitment for regulatory decision-making. It also has to be acknowledged that ERC showed readiness to stand up against politics by explicitly requesting participation of the electricity transmission system operator MEPSO in regionally coordinated capacity allocation by SEE CAO. It remains to be seen whether the new management will be ready to fully explore the regulator’s competences and actively design the energy market in order to live up to the expectations of the newly reformed energy market legislation.