The role of regulatory authorities in the promotion of competition in the public utilities sector

Keywords: regulation, competition, regulatory authorities, network industries, public utilities sector

Abstract

Purpose of the paper is to provide the legal analysis of correlation of regulation and competition to determine the role of regulatory authorities in the promotion of competition in the public utilities sector.

Methods. The analysis of notions of the relations between regulation and competition, as
well as form of competition in the public utilities sector is based on the formal logical and deductive methods.

Results. The first part is focused on the analysis of different approaches to the correlation of regulation and competition in network industries. Different notions of the relations between regulation and competition are considered, namely such notions as deregulation, re-regulation, regulation-of-competition, regulation-for-competition and meta-regulation. The second part highlights forms of competition in the public utilities sector, including separation of vertically integrated monopolies and yardstick competition. The author refers to several approaches to restructuring of utilities and their regulation and concludes that yardstick competition facilitated by regulatory authorities has a great potential in the public utilities sector. The third part deals with the role of regulatory authorities in promotion of competitive mechanisms in the public utilities sector of Ukraine. Based on the analysis of the legal framework the author comes to the conclusion that Public Utilities Regulator in Ukraine may promote competition through performing monitoring over competitive segments of the market,
egulation of access to networks and incentive-based regulation that includes different forms of yardstick competition.

Conclusions. First, regulation and competition are not exclusive, but complementary and non-competing mechanisms that can co-exist within one market. Second, introduction of direct and indirect forms of competition in the public utilities sector expands a toolbox of the regulatory authorities by empowering regulators to perform monitoring over potentially competitive markets, access regulation and incentive-based regulation. Third, the Energy
and public utilities regulator in Ukraine is responsible for promotion of competition that expands its functions far beyond core regulation ones; striking a careful balance between core regulatory and monitoring functions gains extraordinary importance.

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Published
2018-12-20
How to Cite
Kazantseva, A. (2018). The role of regulatory authorities in the promotion of competition in the public utilities sector. Administrative Law and Process, (3(22), 18-29. https://doi.org/10.17721/2227-796X.2018.3.02
Section
Special administrative law