Quarterly Report: Enhancing Stability and Technical Expertise in European and Eurasian Energy Markets (ESTEEM)

The program is implemented by the National Association of Regulatory Utility Commissioners (NARUC) with support from the United States Agency for International Development (USAID). The ESTEEM program focuses on four main programmatic categories: Task 1: Competitiveness, Task 2: Energy Security, Task 3: Fostering Investment, and Task 4: Institutional Enhancement. These categories align with the three pillars of USAID's Energy Bridge Initiative: competitive energy markets integrated with Europe, infrastructure investment, and critical infrastructure protection. During the October-December 2020 quarter, ESTEEM achieved several key milestones. In Task 1: Competitiveness, E&E regulators gathered for technical workshops on quality of service benchmarking, enforcement options, and best practices for using quality of service data to promote reasonable infrastructure investment plans from distribution utilities in the region. As a result, energy regulators in the region are now equipped to implement and enforce quality of service standards that ensure consumers and businesses receive more reliable electric service. In Kosovo, the Energy Regulatory Office (ERO) received training on the use of a long-term demand forecasting tool developed through NARUC's bilateral Kosovo Partnership. Prior to NARUC's engagement, ERO did not have reliable forecasts of future electricity demand in the country. With NARUC's assistance, ERO now has a sophisticated and customized tool that it can use to forecast Kosovo's electricity demand for up to 10 years and promote informed investments in Kosovo's electricity grid. In North Macedonia, regulators from the Energy Regulatory Commission (ERC) used the 2020 USAID/NARUC publication Evaluating the Prudency of Cybersecurity Investments: Guidelines for Energy Regulators to define cybersecurity requirements, recommendations, and target objectives for utilities. The ERC has defined 18 recommended steps for utilities to increase their cyber resilience, which will be monitored and verified according to a two-year action plan and annual reviews. The ESTEEM program also focused on enhancing market performance through topical areas such as market coupling, regional market integration, load flow studies, and production simulations. The program aims to build the capacity of partner countries to transform domestic energy markets into competitive and transparent regional exchanges by assisting National Regulatory Authorities (NRAs) in understanding the value of market coupling, promoting transparency platforms, increasing market monitoring capabilities, and conducting efficient dry-run processes to facilitate smooth market openings. In the background, USAID and NARUC launched a new initiative to assist NRAs in better understanding the value proposition of implementing different market coupling scenarios. Reserve sharing and energy market coupling have great potential benefits in the region to improve regional cooperation and increase trade volumes. NARUC conducted one in-country workshop and one webinar series focused on market coupling, reserve sharing, and load flow analyses in FY 20. The ESTEEM program aims to equip participating regulators to recognize and advocate for optimal scenarios to political decision-makers as well as to the public at large. The program's interventions and deliverables are designed to strengthen the capacity of E&E regulators to develop stable, efficient, transparent, and competitive energy sectors.