The Public Utilities Commission (PUC) is Latvia’s multi-sector economic regulator for energy, electronic communications, postal services, water management, waste disposal service and deposit system service. It was established in 2001, following a legislative reform aimed at liberalising the utilities sectors in Latvia.
Following an in-depth peer review of its governance and performance by the OECD in 2016 (OECD, 2016[1]), the PUC invited the OECD to carry out an independent progress review of the implementation of recommendations put forward in 2016.
The progress review finds that the PUC has made substantial advances in implementing the recommendations put forward in the 2016 review, in the interest of increasing the effectiveness of its regulatory activities and final outcomes for consumers and the economy. The PUC has updated its internal processes and procedures, but, importantly, it has also successfully advocated for legislative changes and implemented reforms in several areas. The main changes implemented at the PUC since 2016 relate in particular to the following four areas: a new fee-setting process; the introduction of incentive-based regulation; a new process for the selection of Board of Commissioners; and the establishment of the Advisory Council.
The breadth and scope of the 2016 recommendations required the PUC to co-operate with a number of stakeholders. In particular, for reforms requiring legislative change, the PUC worked closely with the Ministries of Economy and Finance and with the parliament. In this regard, the PUC was able to advocate for change in a positive political context, given the momentum that came with Latvia’s accession to the OECD during 2016. However, it is to be noted that the PAFER review and its recommendations did not form part of Latvia’s official OECD accession process.
