Enhancing Analytical Capacity of Energy and Water Regulatory Commission

Project BG05SFOP001-2.012-0001 Enhancing the analytical capacity of the Energy and Water Regulatory Commission The project is implemented with the financial support of the Operational program "Good Governance", co-financed by the European Union through the European Social Fund Dr. George Vlondakis Sofia, 31 January 2020

Project aim and background The aim of the Project is: Enhancing the analytical and technical capacity of the regulator and improving the regulation of prices and the efficiency of the electricity market Key project background elements: Amendments to the Energy Act in May 2018 introduced REMIT related provisions Implementation of certain of these provisions require development / modification of secondary legislation and/or regulations EWRC has requested, as well support, for improving the regulatory framework of electricity distribution networks Further capacity building activities for EWRC staff are needed

Objectives of Project Tasks Legal Tasks Draft / amend necessary legal / regulatory provisions, as required by Energy Act provisions on REMIT Propose internal rules to be followed by EWRC investigative experts when assessing potential REMIT violations Technical Tasks Support the harmonized and uniform regulatory reporting by the different Distribution System Operator (DSOs) to EWRC Enhance capacity of EWRC for assessing DSO financial data for improving regulatory monitoring of distribution systems costs Propose regulatory practices for setting power quality indicators for distribution network and the linking of DSO regulated revenues with the quality of their services Capacity Building / Training Tasks Training Capacity building of EWRC experts on topics related to above issues

Legal Tasks Review of applicable national legislative background and relevant EU practices Amendments to Regulation N0. 3 of 21/3/2103 (Licensing) Draft methodology for calculation of fines / sanctions for REMIT violations (Art. 224d. para. 3 of Energy Act) Rules on collaboration and cooperation between EWRC and CPC, FSC and on joint actions of EWRC with Ministry of Interior Review and analysis of documents adopted by other Bulgarian state authorities related to activities of investigative experts in carrying out investigations EWRC Internal Rules for the investigative expert of the EWRC involved in REMIT investigation

Technical Tasks Practices of EU regulators and Bulgarian distribution network operators with respect to regulatory accounts reporting Draft Rules for uniform regulatory accounts reporting by DSOs Practices of EU regulators for the assessment of capital (CAPEX) and operating (OPEX) expenses of DSOs Draft Methodology for assessing CAPEX and OPEX of DSOs Practices of EU regulators with experience in regulating quality of electricity and quality of service, and concrete approaches for setting quality targets for indicators for specific areas within the territory of a DSO Draft Methodology for linking regulated revenues of network operators with indicators of efficiency and quality of services

Capacity Building / Training Training sessions on topics including new Rules and Regulations developed by the project regarding REMIT, investigative practices in Bulgaria by other agencies, etc. Training with respect to correct application of the draft rules for harmonised regulatory accounts reporting by DSOs Training with respect to correct application of the methodology for assessment of CAPEX and OPEX of DSOs Training on the application of the proposed Methodology for regulation of Power Quality

EXERGIA Energy and Environment Consultants Omirou Str. & Vissarionos 1, 106 72 Athens Tel: +30210 6996185, Fax: +30210 6996186 http://www.exergia.gr