Ukrainian parliament passed a long-awaited law intended to set up an independent energy market regulator on Sept. 22.
But the bill, which oversees the functioning of the National Commission for the State
Regulation of Energy and Public Utilities (NCER), still contains flaws that could
allow the president to influence the agency.
However, it’s better than
nothing, experts say.
According to Dennis Sakva, an
energy analyst at Dragon Capital, the wording of the bill that was passed was
not the best of the various options.
“But as far as I understand,
the most favorable (wording) was impossible to pass,” Sakva told the Kyiv Post.
The commission that is
responsible for setting the energy tariffs was established by presidential
decree, and it has been up to the president to appoint its administrators – effectively
putting the commission under the president’s full control.
Lawmakers have failed to pass a
law that would allow the transparent hiring of commission members several
times, with the last attempt being on July 14.
After a heated discussion that
lasted for almost two hours, the Verkhovna Rada passed the bill with 250 votes.
“This law had to be passed,” Savka said. “This is a
very important law, and it lays the foundations for the effective functioning
of the entire sector – it’s a strategic law. We have been pushed to do this by
the state’s (financial aid) donors.”
According to an NCER statement published on its
website shortly after the vote, the new legislation “will help create
transparent market conditions and an open market of gas, electrical energy and
utilities in Ukraine.”
“The commission has taken an active part in designing
of the bill and supports the decision passed,” Dmytro Vovk, the head of the
NCER, was quoted as saying.
The law stipulates that the salaries of NCER employees
have to meet market standards,
which would increase the body’s independence, Vadym Miskyi, the head of the advocacy
department at Reanimation Package of Reforms, a civil activism group, told the
Kyiv Post.
The bill also regulates how
the hiring commission that would recruit board members for the energy regulating body
will be formed.
According to the law, two
members of the commission will be nominated by Ukraine’s president, two by
parliament, and one by the Cabinet of Ministers.
This is where the biggest risk
lies, Miskyi said.
“…The president will still
have a determining influence on the formation of the energy regulator,” he
said. “I think that this point may be criticized, and has to be criticized.
However, we have taken a big step forward: lawmakers managed to agree on a
formula that satisfies all of the major players in Ukrainian politics.”
Another thing that troubled
the bill’s critics was that the NCER staff would not be changed right away.
Three members of the seven-member board will be replaced in six months, two in
a year, and another two in a year-and-a-half.
Many lawmakers voiced concern
that the one member that will stay the longest will be Vovk, the head of the
NCER and a former employee of Roshen, the confectionary giant owned by
Ukrainian President Petro Poroshenko.
Kyiv Post staff writer Alyona
Zhuk can be reached at [email protected]
