What Energy Law Regulates
The foundation of energy law in Georgia is the Law on Electric Power and Water Supply, which establishes the general legal framework for generation, transmission, distribution, supply and trade in the electricity sector, and for transmission, distribution, supply, storage and trade in the natural gas sector. Its purpose is the creation, opening, development and integration of well-functioning, transparent and competitive electricity and natural gas markets. The law governs the management and organization, regulation, monitoring and supervision of these sectors, free access to the markets and questions connected with cross-border trade. It also creates the legal framework for implementing the requirements of the corresponding legal acts of the European Union and protects supply security — both at the level of policy and at the level of market participants' obligations.
The Boundaries of the Law's Application
It is important to know where the law does not reach. Its application does not extend to the exploration, extraction and processing of natural gas and other hydrocarbons, the sale of natural gas through vehicle gas-filling stations, the sale of electricity through electric-vehicle charging points, and the production of gas products — except where processing within liquefied natural gas devices is concerned. Separately excluded are the relations arising from the intergovernmental agreement between Georgia and Azerbaijan concerning the transit, transportation and sale of natural gas through the South Caucasus pipeline system. Water supply has its own boundary too: the law does not apply to the abstraction or extraction of water from a surface or underground object.
The General Regulatory Principles
The organization, regulation and monitoring of energy activity rest on core principles: the safety and reliability of the operation of the electricity and natural gas systems and of the related services; the safe supply of electricity and natural gas to consumers; unrestricted access to the systems and the effective exercise of the right to change supplier; competition, transparency, non-discrimination and legal certainty in every type of activity; the independence of transmission and distribution from other energy activities and related commercial interests, together with the exclusion of conflicts of interest and cross-subsidization; increased efficiency and sustainable development in line with environmental, economic and social security policy; the promotion of smart and environmentally safe technologies; the encouragement of cross-border flows through clearly defined, transparent and non-discriminatory instruments; the protection of the rights and lawful interests of market participants and final consumers; and the assurance of the physical and financial accessibility of electricity and natural gas.