General Framework for the Electricity Market Monitoring

This report covers the latter issue, specifically the monitoring of the electricity market as it becomes increasingly competitive with the participation of both public and private market players. GNERC, the Georgian National Energy and Water Supply Regulatory Commission, is authorized to monitor the energy sector licenses under existing legislation. The current Law on Electricity and Natural Gas gives GNERC the authority to regulate in three broad areas: licensing, tariffs, and dispute resolution. GNERC has the authority to issue, modify, enforce, and revoke licenses under appropriate terms and conditions for electricity generation, transmission, dispatch, and distribution, and for natural gas transportation and distribution. GNERC's Charter, approved in early 2008, further details the functions relating to GNERC's regulatory responsibility. The Commission issues resolutions as normative acts on general issues of regulation, while on individual issues, decisions are issued as normative acts. Operation of the Commission is not an economic activity, but its financing does not depend on the state budget; it originates from annual regulation fees paid by license holders. GNERC has undergone significant development since 2000, with an increase in the number of commissioners and employees. The Commission has adopted a large number of legal acts, including resolutions and decisions, and has increased its revenue and expenses. However, GNERC still lacks knowledge of international experience in monitoring activities by energy regulators and needs to develop specific procedures for monitoring purposes that the Staff can follow. The USAID Hydropower Investment Promotion Project (HIPP) was requested by GNERC to assist and support in drafting internal rules for the overall monitoring of the energy companies. Initially, HIPP supported GNERC in the development of the original report, providing the general framework for the electricity market monitoring. GNERC's monitoring activities include reviewing periodic reports from energy companies, conducting regulatory audits, and reviewing tariffs and market structure. The Commission also tracks data and indices related to the market, including the Hirschman-Herfindahl Indices (HHI). GNERC's monitoring framework is essential for ensuring the effective regulation of the electricity market and promoting competition. The G4G Project aims to support GNERC in developing its monitoring framework and procedures. The project will provide technical assistance to GNERC in drafting internal rules for the overall monitoring of the energy companies. This will enable GNERC to effectively monitor the electricity market and ensure that the regulatory framework is in place to promote competition and protect consumers' interests. The monitoring framework for the competitive retail market will be updated to include the necessary procedures and guidelines for GNERC to effectively monitor the market. This will ensure that GNERC has the necessary tools and expertise to regulate the market and promote competition. The project will also provide training and capacity-building programs for GNERC staff to enhance their knowledge and skills in monitoring activities. The development of GNERC's monitoring framework and procedures will be critical in ensuring the effective regulation of the electricity market in Georgia. The project will provide technical assistance to GNERC to support the development of the monitoring framework and procedures, and will help to promote competition and protect consumers' interests in the electricity market.