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First Annual Meeting of CAREC Members Electricity Regulators Forum (CMERF)

The First Annual Meeting of CAREC Members Electricity Regulators Forum (CMERF) was convened at the request of CAREC member countries to establish a network of electricity regulators to enhance their regulatory capacity and continue their knowledge exchange.

At the Central Asia Electricity Regulators Meeting held at ADB headquarters from 1-5 March 2004, participants expressed their appreciation of the conference and enthusiasm for founding a more permanent regulators’ forum.

In the following 3rd Ministerial Conference of CAREC held in Astana, Kazakhstan from 31 October to 1 November 2004, delegates agreed that the considerable potential for growth and development of the region would be fully achieved if its energy and other infrastructure would be developed. Among others, they underscored the important role of electricity regulation in enhancing regional cooperation and fast-tracking development in Central Asia.

At said conference, ministers also agreed to a timeline proposed by ADB to establish a forum of electricity regulators. The forum is envisioned to provide opportunities for members to jointly investigate common problems and serve as a focal point and knowledge base for regulatory skills and information.

With a grant from the Public-Private Infrastructure Facility (PPIAF)*, a study team composed of Mr. Aashish Mehta, ADB Economist, and Mr. David Butcher, ADB consultant, examined the regulatory approaches and challenges faced by electricity regulators in CAREC member countries. The findings of the study team’s report provided the factual basis for discussions at the CMERF meeting.

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The CMERF meeting aims to discuss and examine approaches, challenges, and successes in electricity regulation to support capacity development for improved regulation and regulatory support of power sector reforms in CAREC member countries.

It also purports to discuss the formal establishment of CMERF and identify potential study topics [ PDF ] in electricity regulation for program year 2005-2006.

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The three-day meeting was divided into five (5) thematic areas, which represent major issues in electricity regulation:

• Role and mandate of the regulator
• Vertical unbundling
• Improving commercial performance of distribution companies
• Wholesale electricity markets
• Tariff setting

The meeting adopted the plenary format to allow varied perspectives and experiences to be heard, and thereby, maximize knowledge exchange among industry participants.

Simultaneous interpretation in English, Chinese, and Russian was provided.

Read the agenda.

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A. Approaches, Challenges, and Success in Electricity Regulation

The findings of the diagnostic review of regulatory approaches and challenges in CAREC member countries, and the international experience shared by distinguished speakers elicited lively discussions among the delegates.

A common understanding that surfaced during the meeting was that each CAREC member country had a lot to learn on how to properly approach electricity regulation, address regulatory challenges, and capitalize on the successes achieved so far by its neighboring countries in the region.

B. Formal Establishment of CMERF

Delegates have unanimously endorsed the draft Memorandum of Understanding (MOU) [ PDF ], which seeks to formalize the establishment of CMERF. The MOU provides that CMERF have a Governing Body composed of principal and alternate members from CAREC member countries and a Secretariat initially held by ADB.

Final signing of the MOU may be held during the next CAREC Senior Officials’ Meeting (SOM) in Kyrgyz Republic from 12-14 October 2005.

C. Potential Study Topics for Program Year 2005-2006

Delegates have endorsed participation of their respective country in the following studies being proposed by ADB for an ADB regional technical assistance project and a PPIAF grant.

• Designing and approving efficient and adequate tariff structures appropriate to different consumer categories, and involving lifelines, reliability premiums, discounts for pre-payment, and/or wattage limitations
  Countries: Mongolia (lead) and Tajikistan
• Appropriate pricing of ancillary services
  Country: People’s Republic of China (PRC)
• Risk sharing under power purchase agreements (PPAs)
  Countries: Kazakhstan (lead), PRC, and Kyrgyz Republic
• Possibilities and pitfalls in the privatization of distribution companies
  Countries: Kyrgyz Republic (lead), Mongolia, and Azerbaijan
• Costs and input requirements of power utilities across member countries
  Countries: All CMERF countries

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Around 40 participants from Azerbaijan, Kazakhstan, Kyrgyz Republic, Mongolia, People’s Republic of China, Tajikistan, Uzbekistan, some ADB professional staff, and speakers from the Electricity Regulators Regional Association (ERRA), The Energy and Resources Institute (TERI), the Philippines’ Energy Regulatory Commission, and Meralco - a private distribution company, attended the meeting.

View the List of Participants. [ PDF ]

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ADB and SERC to Host Beijing Conference on Electricity Regulation (1 July 2005)

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