Decision No. 1/3 of the Board of
the Public Utilities Commission
Regulations Regarding Requirements of Independence of a Natural Gas Distribution System Operator
1. This Regulation prescribes:
1.1. what documents and information shall be submitted by a natural gas distribution system operator (hereinafter - the system operator) to the Public Utilities Commission (hereinafter - the Regulator) in order to demonstrate the compliance of the independence of the system operator with the requirements laid down in Section 45, Paragraph three of the Energy Law;
1.2. the procedures for submitting, publishing and evaluating the report of the system operator regarding the measures taken for ensuring independence.
2. In order to confirm the independence of the system operator, the system operator shall submit to the Regulator the following documents and information:
2.1. the articles of association of the system operator;
2.2. job descriptions and employment contracts or other civil agreements of the persons responsible for the management of the system operator (members of the council, members of the board of directors, managers of administrative units and proctors) on the basis of which the abovementioned persons are operating in the system operator and which confirm that one and the same person may not be concurrently involved in units of the vertically integrated natural gas merchant which are responsible, directly or indirectly, for the production of natural gas, provision of liquefied natural gas services and trade thereof;
2.3. information regarding the measures taken in order to ensure that persons responsible for the management of the system operator (members of the council, members of the board of directors and proctors) may act independently, and the documents attesting to it, including the information regarding human resources, technical, physical and financial resources at the disposal of the system operator;
2.4. the confirmation that the members of the council, members of the board of directors and proctors of the system operator are ensured with the rights to take decisions independently of the vertically integrated natural gas merchant in respect of the assets necessary for use, maintenance or development of the natural gas distribution network. Substantiating documents (for example, remuneration policy of the system operator) shall be attached to the confirmation;
2.5. the conformity programme where the duties of certain employees, and also the measures to be taken are determined in order to prevent discriminating action, and the information regarding a person or unit which is responsible for the control of implementation of the conformity programme;
2.6. the confirmation that a vertically integrated natural gas merchant has no possibilities to influence the operation of the system operator, if the system operator uses services (personnel, information technology systems, premises etc.) jointly with the vertically integrated natural gas merchant. The confirmation shall be appended by a description where the measures taken in order to prevent influence of the vertically integrated natural gas merchant on the independence of the system operator, and the documents attesting for non-existence of any conflicts of interests (for example, the documents which attest that services are received from the vertically integrated natural gas merchant on the basis of market conditions) are included;
2.7. the confirmation that the system operator ensures the confidentiality of the commercial information which it has acquired while performing its duties. The confirmation shall be appended by a description of activities carried out for ensuring confidentiality of commercial information, a document (for example, instruction) where the rights and obligations of the responsible employees for action with commercial information are included, and an opinion of certified auditor of information technologies (systems) that the information technologies (systems) ensure confidentiality of the commercial information which the system operator has acquired while performing its duties.
3. The system operator shall, not later than within 30 days after approval of the relevant documents, inform the Regulator regarding amendments to the articles of association, decisions and agreements in the result of which the distribution of competence changes:
3.1. among administrative bodies of the system operator;
3.2. among administrative bodies of the vertically integrated natural gas merchant and system operator contained therein;
3.3. between the leading undertaking and administrative bodies of the dependent company if the system operator is within the composition of the group of companies.
4. The system operator shall, each year by April 1, submit a written report to the Regulator on the compliance of the system operator with the independence requirements and fulfilment of the conformity programme in the previous calendar year. Documents and information shall be attached to the report in accordance with Paragraph 2 of this Regulation. The system operator shall submit the first report to the Regulator within the time period indicated in Paragraph 31 of Transitional Provisions of the Energy Law.
5. Within five days from submitting the report laid down in Paragraph 4 of this Regulation to the Regulator, the system operator shall publish it on the website thereof.
6. If the documents and information submitted by the system operator are insufficient or inaccurate, the Regulator may request additional information.
7. The Regulator shall, within a time period and in accordance with the procedures laid down in the Administrative Procedure Law, evaluate the report submitted by the system operator and provide an opinion regarding sufficiency of the measures taken for ensuring independence.
8. When submitting the first report referred to in Paragraph 4 of this Regulation, the system operator shall submit the description of legal separation process of the system operator in addition to the information laid down in Sub-paragraph 2.7 of this Regulation. The description shall be appended with information on how it was ensured that the commercial information which the system operator has obtained while operating as a vertically integrated natural gas merchant had not been transferred in the result of separation to such natural gas supply merchant which is engaged in production of natural gas, provision of liquefied natural gas services and trade thereof.
9. This Regulation shall come into force on 1 January 2018.
Acting Chair, Board Member of the Public Utilities Commission G. Ābele
Translation © 2017 Valsts valodas centrs (State Language Centre)