The USAID Energy Security Project (ESP), in cooperation with the team of the international audit and consulting company Ernst & Young, conducted a four-day training for employees of the regional offices and the central office of the National Energy and Utilities Regulatory Commission (NEURC) to gain in-depth knowledge and skills in applying the new Procedure (Methodology) for Calculating Fines Imposed by NEURC (starting now referred to as the “Methodology”).
Introducing this Methodology will contribute to greater transparency and compliance with the license terms of all market participants in Ukraine.
NEURC noted that the development and adoption of the Methodology, which USAID ESP supported, is an essential step in bringing Ukraine’s energy sector closer to European principles of energy market regulation. The Methodology was drafted based on an open and transparent discussion with representatives of the energy and utility stakeholders as well as consultations with the Energy Community Secretariat.
During the training, the NEURC staff discussed the following important issues:
- Key practical steps of applying the Methodology with a focus on determining the violations in detail.
- The phases of calculating the amount of the fine under the Methodology, as well as the calculation of damage/additional benefit.
- Testing of the Methodology based on the analysis of the NEURC inspection reports of licensees.
- Application of other sanctions.
- Analysis of violations not caused by the licensee or related to (un)adopted regulatory decisions.
- Creation of a violation matrix for typical violations of license requirements.
- Control procedures for applying the Methodology at the NEURC’s regional and central levels.
During the training, NEURC employees also had the opportunity to apply their knowledge and skills during practical tasks that will be used during inspections of licensees.
With the adopted Methodology, the National Energy Regulator will be able to calculate fines for violations transparently and efficiently and improve compliance with NEURC licenses preventatively.