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Driving Performance at Latvia's Public Utilities Commission

image of Driving Performance at Latvia's Public Utilities Commission

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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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).

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