Regulatory authority

State of compliance

The National Energy and Utilities Regulatory Commission of Ukraine (NEURC) is the single authority for regulating gas and electricity in Ukraine. Since the adoption of the new Law on the National Commission for the Regulation of Energy and Utilities in 2016, the regulator’s competences and level of independence are theoretically well aligned with the Energy Community acquis. NEURC is headed by six commissioners and a chairman. The term of board members is limited to six years, renewable once.

In practical terms, full implementation of the newly gained powers and autonomy of NEURC still requires adjustment of other legislation. First, introducing the budgetary autonomy stipulated in the 2016 Law requires amendments of the Budget Code. Also, NEURC’s management is not in a position yet to set staff salaries at a level comparable to the regulated industry, and the entry into force of decisions of NEURC is delayed due to financial constraints of the office in charge of publication in the Official Gazette.

Most importantly, NEURC may lose the decision-making quorum required by the Law if a committee for selection of NEURC board members envisaged by Law on the National Commission for the Regulation of Energy and Utilities is not established. As two board members’ mandates expire under the rotation scheme in place in November, their replacement is crucial for the functioning of NEURC. Political intervention in the regulator’s activities was recently proven by suspension of the entry-exit gas tariff methodology adopted by the regulator for national entry/exit points in March 2017 following a request of the president and prime minister. The Secretariat agreed with the regulator to perform an indepth analysis of the adequacy of its legal framework, independence and practical performance in 2017.