Gints Zeltiņš Commissioner of the Public Utilities Commission of Latvia Multi-sectoral regulator: Public Utilities Commission of Latvia

PUBLIC UTILITIES COMMISSION - MULTI-SECTOR REGULATOR Established in July, 2001 Independent authority: - five Commissioners selected by government and appointed by the Parliament for a 5 year period - decisions can be challenged only by the court - funding: duty of 0.2% on the net turnover of regulated services

PUBLIC UTILITIES COMMISSION - MULTI-SECTOR REGULATOR The model of multi-sector regulator was suggested by the World Bank experts The institutional structure is based on U.S. experience in state level regulation Since 2001 integration of regulation has become more popular in Europe, e.g. in 2005 Germany formed Bundesnetzagentur, covering the same sectors as PUC in Latvia

Political, financial and institutional independence Accountability Transparency Regulator is at “arm’s length” distance from government, utilities and consumers – trying to balance interests of all stakeholders REGULATION PRINCIPLES

ADVANTAGES OF MULTI-SECTOR REGULATION Uniform regulatory strategy and similar approaches in all regulated sectors Similar procedures in dealing with customer complaints, supervision of utilities, etc. Ability to apply experience from one sector to other sectors More abilities to deal with multi-sector operators (e.g. power company offering telecommunication services)

ADVANTAGES OF MULTI-SECTOR REGULATION Multi-sector model increases independence – no sector dominates the agenda, no financial dependence on any sector or large utility Better use of scarce expertise, especially important for small country Better focused to deal with specific issues, e.g. litigation, public hearings, public relations Higher efficiency in financial operation of the regulator (economies of scale)

REGULATORS’ FUNCTIONS promotion of the competition protection of the consumers’ interests promotion of the investment-driven development of the utilities’ providers determination of the pricing method approval of tariffs issuing licenses and authorisations for service providers quality control resolution of disputes between market participants

REGULATED PUBLIC UTILITIES – NATIONAL LEVEL ENERGY : - electricity generation, transmission, distribution and sales; - natural gas transmission, storage, distribution, and sales; - liquefied gas storage, filling, distribution, wholesale and retail sales; - cogeneration. ELECTRONIC COMMUNICATIONS - provision of electronic communications services and networks, including voice telephony services, public payphones, public data transmission services, internet access, leased lines, interconnection, radio and TV broadcasting. POST - domestic and international letter-post items (postcards, letters, printed matter and small packets) - postal parcel items RAILWAY - passenger transportation by rail; - public railway infrastructure services to carriers

REGULATORY SYSTEM OF PUBLIC UTILITIES IN LATVIA Ministry of Economy Public Utilities Commission Parliament Municipal Regulators Local governments - Energy - Electronic communications - Post - Railway - Domestic waste management -Water supply and sewage -Heat supply -Public transport

BOARD OF 5 COMMISSIONERS EXECUTIVE INSTITUTION Sectoral departments Support departments and units Energy department Electronic Communications and post department Railway department STRUCTURE OF THE REGULATOR Legal department Economic analysis department General units – external relations, public relations, internal audit, development Technical units – chancellery, human resources, accounting, IT, technical provision

REGULATORY REFORM Government has approved a policy document, envisaging merger of municipal regulators with central regulator. After the reform a unified regulator will have regional offices and a consultation board representing municipalities.

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