The Governance of Regulators

English
ISSN: 
2415-1440 (online)
ISSN: 
2415-1432 (print)
http://dx.doi.org/10.1787/24151440
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Good regulatory outcomes depend on more than well-designed rules and regulations. They also require bodies to administer these rules to ensure that the right policy outcomes are realised. Regulators are at the delivery end of the policy cycle, where they oversee sectors and markets that provide essential services to citizens. The governance of regulators helps ensure that regulatory decisions are made on an objective, impartial and consistent basis, without conflict of interest, bias or improper influence. This series of publications brings together research and recommendations on what makes “world class regulators”, drawing on the experiences of more than 80 regulators from network sectors, including energy, communications, transport and water.

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Driving Performance at Latvia's Public Utilities Commission

Driving Performance at Latvia's Public Utilities Commission You do not have access to this content

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    http://oecd.metastore.ingenta.com/content/4216181e.pdf
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Author(s):
OECD
20 Sep 2016
Pages:
84
ISBN:
9789264257962 (PDF) ;9789264257979(print)
http://dx.doi.org/10.1787/9789264257962-en

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Regulators are proactive referees of the sectors they regulate, contributing to the delivery of essential public utilities for citizens. To fulfill this function, they need to be constantly alert, checking sectoral trends as well as assessing the impact of their decisions. However, while measuring regulators’ performance is essential, it is also challenging, from defininig what should be measured to attributing impacts to regulators' decisions. To address these challenges, the OECD has developed an innovative framework that looks at the institutions, processes and practices that help regulators assess their performance. The framework has been applied to Latvia's Public Utilities Commission, which is responsible for regulating energy, communications, water and waste. The review offers unique insights into the work of a multi-sector regulator, identifying the organisational features that allow lessons and experiences to be shared across sectors and contribute to good performance. It  highlights the importance of clarifying the role and functions of the regulator and its relationship with other public institutions, setting long-term strategic objectives for the regulator's activities, and having the right regulatory tools with appropriate incentives for the efficient and effective provision of public utility services.
 

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  • Foreword and acknowledgements

    To successfully regulate markets, regulators need to be constantly alert, informed by live-data, checking sectoral trends and assessing the impact of their decisions. Measuring regulators’ performance is therefore essential, but by no means easy. To help regulators in their quest for better performance assessment, the OECD has developed an innovative framework that looks at the institutions, processes and practices that help regulators assess their performance.

  • Acronyms and abbreviations
  • Executive summary

    Latvia’s Public Utilities Commission (PUC) is a multi-sector regulator, responsible for electronic communications, energy, postal services, water management and waste disposal. In these sectors, apart from the gas sector, where the incumbent is a foreign-owned monopoly, public ownership of operators is significant. Especially in this context, protecting the regulator from undue influence, setting clear roles and objectives for the regulator and assessing and communicating performance can be key success factors.

  • Assessment and recommendations

    Latvia’s Public Utilities Commission (PUC) is a multi-sector regulator, responsible for electronic communications, energy, postal services, water management and waste disposal. Among these sectors, electronic communications and, to a less degree, electricity are relatively open to competition. Gas remains in the hands of an integrated monopoly (with unbundling and opening expected in 2017). Water is very fragmented, with approximately 140 operators (67 of which are sufficiently large to be regulated by the PUC).

  • Methodology and approach

    Measuring regulatory performance is challenging, starting with defining what to measure, dealing with confounding factors, attributing outcomes to interventions and coping with the lack of data and information. This chapter describes the methodology developed by the OECD to help regulators address these challenges through a Performance Assessment Framework for Economic Regulators (PAFER), which informs this review. The chapter first presents some of the work conducted by the OECD on measuring regulatory performance. It then describes the key features of the PAFER and presents a typology of performance indicators to measure input, process, output and outcome. It finally provides an overview of the approach and practical steps undertaken for developing this review.

  • Regulatory context

    This chapter describes the main features of the sectors regulated by Latvia’s Public Utilities Commission. It describes the market structure and the involvement of the state in these sectors. It also provides an overview of price trends for regulated public utilities.

  • From objectives to outcomes at Latvia's Public Utilities Commission

    The Performance Assessment Framework for Economic Regulators (PAFER) was developed by the OECD to help regulators assess their own performance. The PAFER structures the drivers of performance along an input-process-output-outcome framework. This chapter describes some of these key performance drivers for Latvia's Public Utilities Commission and reviews the existing features, the opportunities and challenges faced by the PUC in developing an effective performance assessment framework.

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