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Electric Restructuring in the U.S.: Lessons for South East Europe?

On June 4th and 5th the American University in Kosovo Center for Energy and Natural Resources (CENR) hosted over 70 participants for the first CENR regional conference titled Electric Restructuring in the United States: Lessons for South East Europe? The CENR conference brought local, regional and international speakers to Prishtina to discuss topics such as: the benefits and challenges of restructuring; lessons learned from the successes and failures in the U.S.; perspectives from the regulated utility; and restructuring activity happening around South East Europe.

Mr. Peter Bradford, former Chair of New York State and Maine Public Utilities Commissions and a member of the U.S. Nuclear Regulatory Commission, was the keynote speaker for the conference. Mr. Bradford’s focus for his keynote speech was lessons learned from the U.S. electric industry. Some highlighted lessons learned include the importance of establishing long term understandings with investors to build confidence and that regulators needs to have authority to carry out their responsibilities. Since the 1980s, regulators have adapted to situations of stress such as growing demand for new power plants and oversight of wholesale competitive markets—which have been a widespread success despite debate over benefits of customer choice.

Peter Bradford's Keynote Slides (pdf)

Mr. Bradford emphasized that “deregulation” is not the same as restructuring and that wise competition and wise regulatory policy are not the same. Some additional general lessons learned from present day activity in the U.S. were also shared. Among others, Mr. Bradford highlighted key links necessary for regulation:

  1. Effective law
  2. Capable and dedicated people
  3. Adequate budget
  4. Open and transparent procedures that involve the public in meaningful ways
  5. Accountability for decision making
  6. Well run utilities

Additional lessons learned were also shared by Mr. Thomas Welch of Pierce Atwood LLP, Ms. Svetla Todorova, former State Energy and Water Commissioner in Bulgaria, and Mr. Kirby Owen of Bearing Point. Mr. Owen brought attention to the importance of transmission constraints on the success of restructuring which is often overlooked by many policy makers and economists. He also spoke to some of the contrasts in Kosovo which differ from the U.S. which include a single transmission grid and that the electric industry is state-owned during the restructuring process.

Ms. Svetla Todorova brought a highly relevant perspective of electric restructuring from her experiences as the former State Energy and Water Commissioner in Bulgaria. She stressed the importance of a clear, detailed regulatory framework, simple rules, a transparent process, and strict execution of the procedures. After two years, Bulgaria is still faced with challenges such as the regulator not following the framework for privatization and applying penalties instead of quality indicators. To this point, Ms. Todorova emphasized: “Restructuring and privatization are not panacea for the energy sector development if the actions of the politicians and the regulator are not systemic, stable and consecutive.

Mr. Tom Welch of Pierce Atwood, LLP contributed to the discussion on regulators and lessons learned and raised some critical issues that the regulatory sector should keep in mind such as: “At what point can the regulator rely on the forces of competition to ensure good service at fair prices?” He also commented on the importance of a commission which is independent of government interference to avoid a public perception that commissions favor certain interests or companies. Additionally, he stated that providing information and outreach to the public is very important to increase public confidence, to set commission benchmarks, to enhance investment and to inform government for effective policy development.

Other speakers included the Honorable Agron Dida, Deputy Minister of the Ministry of Energy and Mining, Mr. Michael Trainor of USAID, Mr. Slave Ivanovski, President of the Energy Regulatory Commission in Macedonia, Mr. Petrit Ahmeti, Commissioner of the Electricity Regulatory Authority in Albania, Mr. Masoud Keyan of PA Consulting, Mr. Fadil Ismaili, Managing Director of KOSTT, Dr. Christopher Hall of the American University in Kosovo and Dr. James Myers of the Rochester Institute of Technology.

The CENR conference was largely successful in its goal of sharing best practices across the region as it relates to energy regulation and the challenges associated with establishing truly independent regulatory frameworks.


Regional Electricity Workshop
Monday and Tuesday, June 4/5, 2007

Monday, June 4

8:30-9:30am

Registration; Coffee; Refreshments

9:30am

Call to order by Chris Hall, Director, Center for Energy and Natural Resources
Welcome by Dr. Michael Farbman, Director, USAID - Kosovo
Introduction by Agron Dida, Deputy Minister of Energy and Mining

9:45am

Peter Bradford - former Chair of New York and Maine Public Utilities Commissions and member, U.S. Nuclear Regulatory Commission. "Why Restructuring?"

10:30am

Panel 1: Electric Restructuring: Why, Who Gains,
Who Loses?

Moderator: Robert Curis, Dean, American
University in Kosovo

12:00pm

Break for lunch
Lunch in "Walker's," the American University in Kosovo cafeteria.

1:15pm

Panel 2: Successes and Failures: Lessons from the U.S.

Moderator: Jim Myers, Rochester Institute of Technology (RIT)

2:30pm

Coffee break

3:00pm

Panel 3: How Regulators and Regulations Work

Moderator: Mike Trainor, US AID

4:30pm

Guest speaker: Pranvera Dobruna-Kryeziu, Managing Director, KEK
"Regulation: the perspective of the Regulated Utility"

5:00pm

Close of day's session

Tuesday, June 5

7:30-8:30am

Coffee and light breakfast provided in the American University in Kosovo cafeteria

8:30am

Panel 4: What’s going on in South-East Europe?

Moderator: Tom Welch, Pierce Atwood

10:00am

Coffee break

10:30am

Panel 5: What’s best for Kosovo?

Moderator: Chris Hall, the American University in Kosovo

12:00pm

Concluding speaker: Tom Welch, Pierce Atwood
Former Chair, Maine Public Utilities Commission; former Vice President, Pennsylvania-New Jersey Maryland Independent System Operator “Lessons learned”

12:30pm

Depart.
Lunch (not included in conference fee) will be available in the the American University in Kosovo cafeteria.


Speaker Biographies


Petrit Ahmeti

has been Deputy Chairman of the Albanian Electrical Regulatory Office (ERE) since 2004. He was previously Managing Director of KESh, Albania’s integrated electric utility, from 2002-2003. A graduate in electrical engineering from Tirana University, he worked in increasingly responsible positions in KESh for twenty years before being tapped to become energy advisor to the Minister of Energy in 2000, and subsequently energy advisor to the Prime Minister. He has worked on many aspects of Albania’s integration into the regional electricity market.

Peter Bradford

is an Associate of The Regulatory Assistance Project. Mr. Bradford is one of the most experienced public utility regulators in the U.S.A.. He was Chairman of the New York State Public Service Commission from June 1987 to January 1995. Mr. Bradford served as president of the National Association of Regulatory Utility Commissioners (NARUC) in 1987. He chaired the Maine Public Utilities Commission from July 1982 until 1987, and had been Maine's Public Advocate in early 1982. He also served as a member of the U.S. Nuclear Regulatory Commission. During his term, the NRC undertook a major overhaul of its regulatory and enforcement processes in the wake of the Three Mile Island accident. Mr. Bradford teaches and consults on regulatory practices and procedures within the United States and internationally. He is a graduate of Yale University and Yale Law School.

Agron Dida

is Deputy Minister of the Ministry of Energy and Mining in the Government of Kosova. His graduate studies in electronics at the University of Zagreb led him into teaching at the University of Pristina’s Faculty of Electrical Engineering, where he has lectured since 1982 through good times and bad. After the war in 1999 he played a major role in re-starting Kosova’s communications infrastructure, first as head of PTK then as Technical Director of RTK. He has served as Deputy Minister since the Ministry was founded in 2004.

Pranvera Dobruna-Kryeziu

has been the General Manager of KEK, the Kosova Electric Corporation, since October 2006, following six months as Deputy Managing Director. Prior to joining KEK, she was a key actor in the establishment of Kosova’s Energy Regulatory Office, as part of UNMIK’s Pillar IV, and was head of the Energy Office in the Prime Minister’s Office. She has served as head of the Kosova Delegation to the first round of the Pristina-Belgrade Technical Dialogue, and a member of the EU Commission negotiation process on the Energy Community of South East Europe.

Chris Hall

is Professor of Public Policy at the American University in Kosovo and Interim Director of the Center for Energy and Natural Resource Development. On July 1st Dr. Hall takes over as President of the American University in Kosovo. Chris is a former Senate Chair of the Committee on Utilities and Energy in the Maine Legislature in the U.S.A., where he authored much legislation including the establishment of ‘Efficiency Maine’, Maine’s major energy conservation and efficiency program. He is a former executive in the steel and mining industries, and teaches courses in Public Policy and Energy & the Environment at the American University in Kosovo.He was educated at Oxford University and Columbia University Graduate School of Business.

Fadil Ismaili

is Managing Director of KOSTT, the Kosovo Transmission System and Market Operator. He entered the electricity industry through the route of information technology: a graduate of Pristina University in system economics, he worked as a computer programmer, IT manager, and software designer before joining KEK as head of information technology and economics in 1999. He served in the positions of Commercial director and Deputy Chairman and then Chairman of KEK before joining KOSTT on its spin-off from KEK in 2005.

Slave Ivanovski

is well known to many participants in this Workshop. He has been President of the Energy Regulatory Commission of the Republic of Macedonia since its founding in 2003. In December 2006, he was additionally appointed head of the South-East Europe Energy Community’s Regulatory Board. In the United States, he has promoted the successful partnership between the Macedonian and Vermont energy regulators, a model for international exchanges of expertise in this field. Before becoming President of ERC, he worked as Senior Legal Expert in Macedonia for the German consulting firm GOPA.

Masoud Keyan

is PA Consulting’s Chief of Party for USAID’s KEK project and is also adviser to KEK’s Managing Director. Mr. Keyan has 28 years of experience in energy sector executive management at the state and international level. He has worked on electricity restructuring and privatization in Argentina, Armenia, Australia, Azerbaijan, Canada, Chile, Indonesia, Kosovo, Moldova, New Zealand, Russia, Spain, the United Kingdom and the United States. Prior to joining PA, Mr. Keyan was the Director of Fossil Generation Services and Asset Management for Central and South West Corporation (CSW) in Dallas, Texas. He has graduate degrees in mechanical engineering from the University of Tulsa, and business from Dardan University of Virginia.

James Myers

is Director of the Center for Multidisciplinary Studies at the Rochester Institute of Technology in Rochester, New York, and Project Director of the US AID-funded Center for Energy and Natural Resources. Dr. Myers has been actively working in the South East Europe region for over ten years with a focus on economic and service sector development. Educated at the University of Michigan and Michigan State Universities, he has advanced degrees in service management and packaging technology.

Kirby Owen

is Advisor to the Ministry of Energy and Mining with Bearing Point. He has been involved in energy sector economics, regulation and public policy for over twenty-five years. His career began in the United States and he moved to the United Kingdom at the beginning of market and regulatory reform of the energy sector there. Since then, he has worked in the UK and in several Western European countries on energy sector market issues. Since 1991, he has also spent about half of his time in the transition economies of Central and Eastern Europe, where he has advised on energy economics, public policy and privatization issues.

Svetla Todorova

worked at Bulgaria’s State Energy and Water Regulatory Commission from 1999 to 2006, first as a tariff expert and then as Commissioner. A prominent contributor to the development of ERRA, the Energy Regulators Regional Association, she served as Chair of its Tarriff/Pricing Committee. Ms Todorova is now consulting for US AID and others on electricity restructuring in the South-East Europe region. She is a graduate of the Technical University of Sofia.

Michael Trainor

serves as Senior Energy Advisor with USAID in Kosovo. His responsibilities include assistance with energy policy development; new generation capacity in Kosovo restructuring of "KEK" in preparation for its privatization; and capacity-building for the Energy Regulatory Office. Mr. Trainor previously managed the utility and infrastructure practice of Emerging Markets Group, Ltd./Deloitte Touche Tohmatsu in Washington, D.C. From 2000 through 2005, Mr. Trainor served as Senior Energy Advisor with USAID in Washington, D.C., Ukraine, Moldova, and Azerbaijan. He has a Master’s degree in International Energy Economics and International Relations from Johns Hopkins University School of Advanced International Studies.

Tom Welch

is a member of the energy practice at Pierce Atwood, a major international law and consulting firm based in Portland, Maine, USA. Prior to joining Pierce Atwood in 2006 he was Vice President for External Affairs of PJM Interconnection, a four-state regional electricity transmission system operator based in Pennsylvania. He served as Chair of Maine’s Public Utilities Commission from 1993 to 2005 – playing a major role in the restructuring of the industry and establishment of a 6-state regional market in New England. Tom knows this region well, having served as the NARUC Consultant to ERRA (the Energy Regulators Regional Association for Eastern Europe) from 2000-2005. He was educated at Stanford University and Harvard Law School.

Thank You
USAID RIT The Center for Multidisciplinary Studies