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  Starting page > Annual Reports > 2004


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Advantages of unified regulation

More than three years have passed since the Commission started its operations, and the advantages of unified multi-sector regulator have clearly demonstrated themselves. The first advantage is the use of unified approach unified regulatory strategy, unified requirements for information provision by service providers, unified procedure for organizing public hearings and finding out public opinion, uniform approach to issuance of licenses, tariff setting and dispute settlement. The use of unified approach improves predictability of regulation, clarifies the investment environment for the existing service providers and new entrants in the market, as well as enables more efficient use of regulators funds and expertise. The unified approach is especially significant for companies which simultaneously operate in several regulated sectors. An advantage of multi-sector regulation is also the opportunity to apply the experience accumulated in one sector to other sectors, taking into account the specifics of each sector.

The position of unified regulator provides an insight of the considered issues in a wider context, evaluate the existing situation in each sector and the relative development prospects against other sectors. Mutually complementing information about processes in several sectors ensures more accurate analysis about the mutual impact of energy sub-sectors, the impact of possible changes on the overall price level, competitiveness of the national economy and other macroeconomic indicators. To make certain that regulated services are provided in sufficient quality and their price is justified, the Commission has the right to request all the necessary information from service providers.

One of the main tasks of the Commission is to find balance between the interests of involved parties, protecting consumers and promoting the development of service providers, ensuring safe and continuous availability of services at present, in the medium and long term. Economic regulation of several important sectors for society in one institution provides better opportunities to balance the interests, eliminating the possibility of capture by the interests of a separate sector, creating a better idea about consumer opportunities and needs, as well as the overall situation of the national economy.

The existence of unified independent multi-sector regulator means that the Commission is sufficiently strong to fulfil the delegated functions service providers have to respect the Commissions opinion. After the Commission started operations, a certain time period passed before service providers were convinced about the Commissions independence and impartiality, and currently cooperation is constructive in most cases, the Commission is an equal discussion partner for the largest Latvian enterprises, several of which are incorporated in world scale corporate groups.

Multi-sector regulatory model, especially in case of Latvia as a small country, creates advantages by concentrating human resources and expertise. Existence of separate regulators would mean that regulatory experts and specialists would be divided among several institutions. A small regulatory institution would also be weaker financially, not being able to attract and retain good specialists. The Commission also uses advantages of unified regulation in its structure because sector departments are complemented by Legal and Economic Analysis Departments which participate in the consideration of issues in all sectors. The high professionalism of the Commissions employees is witnessed by the fact that Commissions experts regularly participate in the working groups of ministries developing sector policy documents and drafting legal acts.

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