Our watchdog project in energy in Romania, started in 2010 under SAR and continued in 2012 under Expert Forum, was quite successful in improving some issues of governance in the energy sector, to the extent this is possible in a very corrupt environment. Some of our recommendations were implemented in the laws; issues of public policy in energy got to be transparently discussed with stakeholders; and the international donors benefited more accurate information to design conditionality for structural reforms. Of course, success was only partial and there are many things that can be improved, e.g., when it comes to the implementation of law and the current practices of the public administration. However, the project built up our expertise in monitoring energy sector issues and our experience could be replicated in the region. You can find a brief guide on what to do here: Pol-Brief-14-final
Poll with stakeholders
After the finalization of this second phase, we asked one representative of each key stakeholder for inputs (the regulator itself, the Parliament, energy companies, Competition Council, independent experts, shareholders in the energy companies). The response rate was 70%. These were the questions:
1. Was the watchdog project on the energy regulator worth the trouble?
All respondents said yes; mainly because it brings to the public opinion the major issues on the energy sector. The project was of interest as indicated by the large number of stakeholders attending the launch events. Such monitoring reports are being done in other countries too.
2. What should have been done differently?
The stakeholders considered that: we focused too much on certain aspects of the energy sector or the watchdog while other issues mught have been of higher interest (energy companies and their losses; or other aspects of the sector regulation). Other stakeholders should have been put under scrutiny too – the Ministry of Economy. We should have consulted more with the energy regulator; and we should have used more sources for the information. In a public conference, some stakeholders may not speak freely their minds. The reports should have been shared with 5-6 stakeholders for inputs before the publication in open conference. The translation in Romanian was at times awkward.
Also: we should rely less on “what EU says” and not suggest that EU should take over the regulatory responsibilities if the national regulator fails to do its job. ANRE is not the only responsible institution for the poor public governance in the energy sector.
Our responses: The poor consultation with the energy regulator was a mistake in the first evaluation; we then met the leadership of ANRE for the following two evaluations and explained how the regulator can improve its scores from within. At the last evaluation, we shared the report with ANRE before the conference.
We used interviews and desk research for multiple sources of evaluation; indeed, during the public conferences only one peer reviewer was at the speakers’ table with us. However, all evaluation reports have been peer reviewed by 5 peer reviewers (two Romanians, 3 foreign experts) with various backgrounds and sources of information, for a proper reality check. We also wrote the reports with knowledge acquired after meeting all major stakeholders and following the energy sector for 3 years now; however, we cannot share the report before the launch, otherwise the launch event would be compromised.
The reliance on EU (and IMF) is unfortunately a vulnerability of the energy sector reform itself.
On the focus on only certain parts of the regulation: indeed, on each evaluation report we focused mainly on one-two major regulated aspects (e.g., price regulation in electricity in the first report; cost pass through in the gas sector in the second evaluation; and distribution tariff methodology in the third report.). This is because there is a trade-off between completeness and focus, and the evaluations concerned only on the regulator, we used specific regulations as examples. Even so, the reports were simply too big and we had to issue at the same time a smaller policy brief with a matter that attracts the media and highlights the most immediate issue, the key topic of the conference. We try to compensate by issuing other policy briefs and reports on key events in the energy sector, and in time we extended our watchdog to the whole energy sector.
3. Lessons learned for the region:
From the Romanian regulator to other regulators: not to repeat the same mistakes, politicization and deprofessionalization, plus excessive regulation of end-user prices for consumer protection; but learn the positive experience of the early 2000s, when the regulator was set up and was a good practice model.
From our watchdog project for future projects in the region: ANRE’s scores should be correlated with the investments in the sector, to show the need for monitoring and the importance of the quality of the regulator.
What we can do for you
1) You can read the guide above and our evaluation reports. Please feel free to check out all our energy reports.
2) You can send me an e-mail to ask me more: Otilia Nuțu, otilia.nutu (at) expertforum.ro. Maybe we partner to monitor your energy regulator!
3) We will organize a regional event, probably in the Balkans, in late January 2013, to discuss more about our project and see what we can do to set up a regional network to monitor energy policy and regulation. You can sign up for information about this event by sending me an e-mail, otilia.nutu (at) expertforum.ro.