(written by Mihaela Ion)
The Hungarian energy sector has changed radically in the last decades. The market is now liberalised and the regulation is in line with European law. Until last year, it was unambiguous that Hungary is following a sector specific regime in the energy sector but through a recent act, the approach is now can be defined as multi-sectoral. However, as important sectors such as telecommunications or transportation is regulated separately, I would still not consider the Hungarian legislation as one size fits all.
The multi-sectoral Hungarian regulatory agency is called Magyar Energetikai és Közműszabályozási Hivatal (Hungarian Energy and Public Utility Regulatory Authority, MEKH) and was established by the Act No. XXII of 2013 on the Hungarian Energy and Public Utility Regulatory Authority, entered into forced on 4th April 2013.1 The MEKH is an independent regulatory body which is subject only to legislation2. Its functions can be determined only by law or regulations based on law.3 Concerning its supervisory powers, the decisions of the MEKH cannot be amended or annulled, and the authority cannot be ordered to initiate a proceeding.4 The President of MEKH is appointed by the Prime Minister for seven years (can be re-appointed one time).5
The MEKH performs functions concerning the sector of electricity, natural gas, district heating, water public utility and waste management.6 If the law does not provide otherwise, the authority supervise the activities of people and organisations falling within the scope of the act on gas supply7, on strategic stockpiling of natural gas8, on electricity9, on district heating10, on water public utility11 and waste management12 and on regulations based on these acts.13 The MEKH is responsible for regulating fixed transmission line licenses in the energy sector, pricing application, consumer protection and supervision of the competitive market, which – of course - means constant monitoring.
A strong, multi-sectoral regulator has certainly its advantages. It is able to achieve higher efficiency by leveraging information gathering capacities, by sharing knowledge and human resources. In addition, a strong authority might be more credible for investors and for consumers as well. However, it is possible that these efficiencies are not realised because the regulator is not able to specialise, thus it lacks industry-specific expertise. Some also fear that one single authority can be influenced easier by the government or by an industrial actor.
In Hungary, the establishment of the MEKH as a new multi-sectoral authority is far too recent to assess its functioning but the strength of its legal status was widely criticised by opposition parties and industrial actors. While the decisions of the MEH were subjects to judicial review, it is not any more the case, as the new authority has the power to issue decrees which can be challenged only at the Constitutional Court in case of non-compliance with the Constitution or with international treaties.
(written by Anna Székely)
B. Non EU Member states
I. State A