The regulation of the utility sphere under the Law on Energy is built on five interconnected blocks of norms: the general principles, the public-service obligation institution, mandatory authorization (licensing), the licence conditions, and the transition rule for authorization. This page explains all five together — it is in their combination that the legal map of the utility business lies.
General principles
The principles of regulation include: the safety and reliability of the operation of systems; the safe supply of electricity and natural gas to consumers; unrestricted access to systems and the right to change supplier; competition, transparency, non-discrimination and legal certainty; the independence of transmission and distribution from commercial interests; increased efficiency and the promotion of smart, environmentally safe technologies. These principles are the starting point for interpreting every detailed norm.
Public service
Deriving from the general economic interest, for the purposes of supply security, continuity, appropriate quality and price, environmental protection and energy efficiency, an energy undertaking may be charged with a public-service obligation. The obligation is imposed by the government after consultation with the competent authorities, the commission and the Energy Community Secretariat; it is a temporary measure subject to regular review. It must be transparent, non-discriminatory, proportionate and easily verifiable; compensation or an exclusive right is granted in a transparent manner and must not exceed the corresponding costs, taking into account revenue and reasonable profit. The commission is authorized to set the tariff for performing the obligation.
Mandatory authorization
The commission issues licences for generation, transmission, distribution and market operation in the electricity sector, the corresponding activities in the natural gas sector, and water supply. Carrying on these activities without a valid licence is prohibited. Licensing is not required for own-consumption generation not connected to the network, generation during the commissioning period, and small or micro-capacity plants — such activity must be declared.
Licence conditions
A licence is issued to an undertaking satisfying the established conditions. The licence seeker substantiates by documentation: technical, economic, financial and operational capabilities; the capacity to take all measures needed to ensure the quality of the service; and, where relevant, the capacity to perform public-service obligations. If the licence seeker cannot prove these capabilities, the commission will not issue the licence. The licensee must ensure fulfilment of the licence conditions throughout the validity of the licence, and non-compliance with a demand counts as a breach of licence conditions and entails liability.