Institutional framework for public utility regulation: case study of the district heating sector in Ukraine
Abstract
Purpose of the paper is to provide the legal analysis of the institutional framework for public utility regulation based on the case study of the district heating sector.
Methods. The analysis of the new paradigm for district heating sector regulation, as well as the institutional framework for district heating sector regulation in Ukraine, is based on the formal logical and deductive methods. These methods also became the basis for making proposals aimed at improving the national legislation that determines the institutional framework for district heating sector regulation.
Results. The first part is focused on the analysis of traditional and modern approaches to structuring and regulation of utilities in the district heating sector. The traditional approach tends to structure and regulate utilities as vertically integrated monopolies. This modern approach offers to separate natural monopoly from the competitive segment of the market and regulate only the natural monopoly segment. The second part highlights the local character of the district heating sector. The author concludes that there is no unified institutional model of district heating sector regulation. Based on the analysis of the legal framework the author concludes that the lack of a comprehensive administrative law concept of state regulation in public utility sector, as well as inadequate legal framework for district heating sector regulation, affects the effectiveness of state regulation.
Conclusions. While the traditional approach tends to structure and regulate utilities as vertically integrated monopolies, the modern approach offers to separate natural monopoly from the competitive segment of the market and regulate only the natural monopoly segment. The modern approach creates a theoretical background for the new paradigm towards district heating regulation. The independent regulatory authority and local public authorities present the institutional framework for district heating sector regulation in Ukraine.
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