Driving Performance at Portugal’s Energy Services Regulatory Authority
As “market referees”, regulators contribute to the delivery of essential public utilities.
Their organisational culture, behaviour and governance are important factors in how
regulators, and the sectors they oversee, perform. The OECD Performance Assessment
Framework for Economic Regulators (PAFER) looks at the institutions, processes and
practices that can create an organisational culture of performance and results. The
report uses PAFER to assess elements linked to both the internal and external governance
of Portugal’s Energy Services Regulatory Authority (ERSE). The review acknowledges
the well-respected status of ERSE within the institutional framework, analyses the
key drivers of its performance, and identifies a number of challenges and opportunities
to help the regulator prepare for the future, including in the context of deep market
transformation and the COVID-19 crisis.
Published on May 05, 2021Also available in: Portuguese
Portugal’s Energy Services Regulatory Authority (Entidade Reguladora dos Serviços Energéticos, ERSE) has provided stability and predictability to the sector since the start of market liberalisation in the 1990s. The regulator has successfully taken on new functions over the years, and has shown flexibility and agility in adapting its governance and regulatory practices to a changing context and new challenges.
ERSE can strengthen its identity as a forward-looking regulatory authority, enlarging its appetite for experimentation, including identifying areas where more risks can be taken and innovations tested. The strategic plan is a testament to the regulator’s technical capabilities, but it can be used further to showcase ERSE’s value to a wider audience.
Building on the trust that ERSE has put in place with its stakeholders at large, ERSE can take steps to build a constructive, ‘no surprises’ relationship with the executive and legislative in order to set expectations on work priorities and create a more predictable and stable framework for resourcing.
The use of consultative councils by ERSE is an effective and mature mechanism for stakeholder engagement. The councils allow energy sector participants to share viewpoints and reach consensus when possible, thus playing a role even beyond an engagement mechanism for the regulator. ERSE should continue the positive practice of using the councils, and preserve their value through proportionate use.