Dear Mr.Jansen:Thank you for your letter, in which you requested our legal advice.
Below, I will provide you an explanation of different possible options on your issue regarding the future design of the regulation of energy market.The choice is yours but, I will also present my recommended option on this matter which could serve the interests of the state and citizens in the future.This letter is divided into three sections. First, analysis of three administrative organs and their roles and the question of who would have the power to regulate the market are clarified. Furthermore, the three systems of regulation are to be found in the second section, associated with legal analysis and recommended option. Finally, I will provide the challenges of accountability.l The proposed administrative organ for delegation:First of all, in order to answer the question on who should have the authority to regulate the energy markets we need to distinguish between three options: 1.
A ministry within the central government 2. Local administrative authorities 3. Or, independent agencies. For the purpose of having a strong regulation of the energy markets, we cannot delegate the local organs for this mission because it may not have the capacity to deal with such regulation as its main role is to regulate and provide general and social services to the citizens.The ministry, on the other hand, is not the best solution because it may benefit the government as part of it at the expense of citizens and perhaps we will face the concentration or abuse of power within a central government.My recommended option, in this case, would be to delegate an independent agency that enjoys a high degree of autonomy and independence from the centralized government of polandia in this sense.
They are able to enforce the laws separately from any external interference. Independent agencies established to execute public tasks including regulation of markets what make them a possible option to have the power to regulate the market. However, their independence can lead to problems of accountability. I will provide more details on accountability in the last part of this letter.l The methods of administrative regulation:Based on the need to ensure the balance and the efficiency of the market we need to apply one of three types of administrative regulation.
Therefore, in order to give you the most applicable options, we need to understand each type of these three very carefully.The first type is, command and control system;In this system, there are specific obligations and mandatory norms imposed on companies and any deviation from these norms leads to fines. In this case, companies either comply with such norms or they will be fined.The advantages of this type of law-making, that, it is very clear to enforce these rules because there are strict obligations and non-complying leads immediately to fines.However, within this system, there is no flexibility meaning that, the industry or the companies will only care about not exceeding the rule of law.Moreover, This system limits the innovation within an economic sector and provides no positive behaviors because investments in innovative sectors will not bring them anything as the threshold of actions (which are allowed and which are prohibited) is super-specified by the law.
Moving to the economic regulation as the second type, rather than dictating conduct through command modes, in this method, the government use prices incentives, such as taxes on each unit of pollution emitted (Pollution is when something is added to the environment that is harmful or poisonous to living things.) This type of regulation maintains a clear distinction between government and the governed and makes it easier to hold someone accountable.The third type of regulation of an administrative authority is the so-called self-regulation.The rules are created by the industry/non-state actors within this system meaning that the companies enjoy a degree of autonomy that allows them to structure their own norms and rules apart from the government. Self-regulation is a super flexible method that gives the companies a wide scope of choices but, there are no obligatory rules therefore, we can not guarantee that everyone is applying his or her duties because it only depends on the behavior of private actors. Despite the disadvantages of command and control system of regulation, it remains the best method we can apply in order to achieve the desired tasks under liberalism that includes establishing tariffs, issuing licenses and imposing fines on companies not complying with the rules.
In this sense, the way I see it, command and control system, meet the requirements needed to regulate the market as its core principle is that non-complying leads to fines.l Accountability: In case the authority to regulate the energy market is delegated to an independent agency we will face some challenges with accountability, in addition, it would be difficult to ensure the effectiveness.In order to ensure accountability and efficiency, the government can ask the delegated power to produce annual reports in which they have to describe what did they do, how many individuals decisions they issued, or how many complaints they handle for instance. The purpose of these reports is to check the effectiveness and efficiency of work and make sure they achieve their goals and objectives. Another way to ensure accountability, as a government you can conduct some hearings to obtain more information.
So, representatives of different agencies are interviewed in order to ensure they do their jobs in an appropriate way. To sum up, in this letter I provide my legal analysis and different applicable options on your legal matter taking into consideration your preferences of solutions and the future desired objectives, hoping this letter provides all information and several options.