20.04.2011: Regulating Energy – Second ANRE Evaluation

Wednesday, April 20, SAR launched its second independent assessment of Romanian energy regulator ANRE, followed by a debate. Participants in the event included representatives of the ANRE, of state and private companies, of the IMF, the World Bank, audit and consultancy companies and embassies.  You can find the detailed evaluation report and a short Policy Brief with the key messages at the above links.
Some conclusions of the report:

– ANRE is just as important a regulator as the National Bank, so it should have the same statute like the Central Bank, in order to attain similar powers and a similar reputation

– currently, the ANRE is not independent of political interferences; as long as the Government continues to pressure for low energy prices, below economically justified values, or issues Ordinances so that some consumers benefit from cheap energy, the energy market cannot develop.  And there’s little the ANRE can do about it.

– small prices “for the population” also mean zero investments; consumers do not have freedom of choice; and, in reality, those who benefit most from the status quo are the major, favored players, not the population.  Those who benefit most are the ‘smart guys’ at Hidroelectrica or the major gas consumers in the chemicals or fertilizers industry

– if the market became truly liberalized and state owned producers could sell on competitive terms, we might be surprised. That is, prices for the population might not increase substantially, but they would increase for those who have benefited so far from preferential contracts. To see what would likely happen if the market would be liberalized in full tomorrow, see page 32 of the Report.

– in order for the ANRE to do its job, it should be:

1) independent of the Government – that is, it must be subordinated to the Parliament, just like the Central Bank or the CNVM (the Romanian SEC). It must have a regulatory committee comprising specialists from outside the ANRE, selected on competence criteria. It must also have a representative consultative council, which must include representatives of the regulated industry (employers’ associations, trade unions); MEC, consumers, local authorities etc. The consultative council must be consulted in order to establish the direction in which the energy market should go and what regulations are needed for this.

2) accountable to the Parliament and the stakeholders. It must prepare an annual activity report which would include the regulator’s long run objectives, the extent to which it completed its plan, the manner it which it used its available resources. The report  should also include an external audit.

3) predictable. Regulations must be consistent and predictable for investors.

4) Regulations should be good quality, not focused on  the regulation of prices (for which the European Commission has already started infringement procedures against Romania) but regulations that would eliminate the obstacles on free competition among energy producers and among suppliers.A doua evaluare_ANRE_RomanaPolicy Brief 53_ANRE_Nu mai pierdeti inca o sansa

2 Responses to 20.04.2011: Regulating Energy – Second ANRE Evaluation

  1. x says:

    The folowing links are broken – 20.04.2011: REGULATING ENERGY – SECOND ANRE EVALUATION and the accomanying summary. http://sar.org.ro/en/reglementarea-in-energie-a-doua-evaluare-a-anre/

  2. admin says:

    Buna ziua. Multumim. Am rezolvat.

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