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Ukraine’s Independent National Energy Regulator

In 2016, Ukraine proposed for the re-establishment of an independent national energy and utilities regulatory body. The Draft Law No 2966-d, “On the National Commission for State Regulation of Energy and Public Utilities Sector”, was signed into law by the President of Ukraine on 22 November 2016 following a decade-long campaign. This marks a significant step toward creating a competitive energy market in Ukraine, a reliable regulatory environment, and a meaningful reform of the country’s energy sector. The new law was developed in line with the Energy Community Treaty and Ukraine’s obligations to implement the EU’s Third Energy Package.

Up until this point, the activities of the National Energy and Utilities Regulatory Commission of Ukraine (NEURC) had been governed by a series of legislative acts and could be dissolved on the basis of a presidential decision. Under the new law, the regulator’s functions shall include the issuing of resolutions, orders and regulatory acts, licensing conditions and the granting of licences in the electricity and gas market and public utilities sector, the setting of tariffs, and the supervision, monitoring and control of market players.

The law also introduces extensive transparency obligations, a rotation procedure for commissioners, and seeks to limit political interference by prohibiting governmental officials, municipalities, political parties, and any other legal entities or individuals from giving any instructions, orders or requests to the regulator. In this podcast, Olena Pavlenko, of Ukrainian think tank DiXi Group, traces the backdrop to this development, outlines how the new regulator will function in effect, and discusses the implications of its establishment.