Governance in Albanian Liberalized Power Market by Dr Lorenc Gordani, 27 February 2016

Albanian Energy Regulator (ERE) is an independent public body responsible
for the regulation of activities in the power and natural gas sector, organized
in accordance with the provisions of the new Law on the Electricity
Sector no. 43 dated 30th April 2015. The new law aim a fully aligned
with Directive 2009/72/EC dated 13 July 2009 “On common rules for the
internal market in electricity”.

In this regard ERE is directed by a Board of Commissioners appointed by the
Albanian Parliament. The Regulatory independence
is a central pre-condition for successful market liberalization and the reforms
of the electricity sector. National regulatory authorities (NRAs) were
established to regulate the monopolistic activities and to promote market
mechanisms in generation and supply activities by controlling the conflict of
interest between the executive and state owned utilities and new enters
(private company).

The rationale behind
the institution of an independent regulatory authority lies in the attempt to
isolate regulators not only from influences of the regulated companies but also
from political interference. If market liberalization is supposed to become
real, it requires a neutral institution that is able to take autonomous
decisions that balance the interest of all market participants and base on
sector specific expertise, not political paradigm.

In this regard one
of the core task of the Energy
Regulator Authority must be that of the determine of
the prices and tariffs. Then for example of RES the Article 15 on “Fixed
tariffs of electricity produced” of the Law No. 138/2013 “On
Renewable Energy Sources” establish that the methodology for the determine
of the fixed electricity tariffs, that will be paid to priority producers who
exploit resources of renewable energy is defined by the ERE. In this case the
role of the Council of Ministers is clearly associated within a second moment (which
came after the proposal of the methodology by ERE) that of the approval of the
proposal came by ERE.

In support of the
above mission Albanian Energy
Regulator (ERE) is financed by regulatory license fees and regulatory tariffs
paid by all the actors of the market such are they licensees in generation,
transmission, distribution, trade of electrical power and licensees in
transmission and distribution of gas etc. In this regard ERE also reports
annually to the Albanian Parliament “On Power Sector Situation and ERE’s Activity”.

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