Thursday, November 20, 2014
Suggestions to EMRA From An Employee
After the government decided to withdraw itself from the market as an owner, an investor and an active market participant, energy market of the country has been undergoing a major restructruring, including privitization, liberalisation and regulation. Energy Market Regulatory Authority (EMRA), was established in 2001 in order to perform the regulatory and supervisory functions in the electricity, natural gas, petroleum and Liquid Petroleum Gas (LPG) markets in accordance with the reform package offered by International Monetary Fund and European Union. The fundamental objective of EMRA is set forth in its founding document as follows: “to ensure the development of financially sound and transparent energy markets operating in a competitive environment and the delivery of sufficient, good quality, low cost and environment-friendly energy to consumers and to ensure the autonomous regulation and supervision of these markets.” As an independent regulator, EMRA is endowed with regulatory functions such as licensing to transcribe the entries and exits to the market; regulating the market to assure non-discriminatory third party access to the monopolistic infrastructures such as grids; ratemaking to inhibit monopoly rents; and supervising and penalizing (if necessary) to make sure that the market participants are in compliance with the rules and regulations. And the EU documents confirm that regulations pertinent to energy sector in Turkey are compatible and in compliance with the EU directives which present one of the most advanced stage in terms of market liberalization and competition.
Within this scope EMRA is regulating an area which needs more than $150 billion investment in a 10-year period. Those sectors employ almost 350.000 people directly and near million indirectly. EMRA’s actions and decisions have a huge impact on real people as well as related industry structure and economy generally. That’s why thousands of people are trying to get actual news from EMRA. EMRA has a web site which has saticfactory Alexa traffic rates. But this statistic shows us that there is some room for EMRA to increase its traffic rate also. I’m going to try to make a few suggestion to help to increase that rate and explain the reasons why I believe that this rate is lower than it should be. Also I believe that these proposals address some deep down problems of EMRA and some practical remedies to them.
1) In part of its regulatory duties, EMRA needs to made a lot of secondary legislations until now and because the dynamic structure and complexity of energy business, it’s always needed to make fine tunings. And according to law, before EMRA Board takes decision to make a regulation first time or change an existing one, it must announce it to public and other government bodies through its web page. So every time one visits EMRA web page, he/she can see a regulation announcement. But according to my 10 year-experience most of the market participant prefer to get the news from other sourcesrather than EMRA, mostly from industry association magazines or web sites. After glance at those kind of web sites’ discussion or comment sections it can easily be understood that most of the market people were not aware of the regulation before it was announced by industry or that they did not read explanations made by EMRA. Although, reasons of this approach need to be researched deeply in the field, the reality is clear. In Turkey, mobile devices penetration rate is high and people tend to use them in daily life. Resent political debates in the country showed that people use twitter and facebook as a main news source and communication channel. Even former presedent of EMRA is a fun of Twitter, EMRA doesn’t has a Twitter adress or facebook page and there’s no social media opportunity in its web page. This means EMRA misses a great opportunity to interact with market participants. In my opinion, instead of putting it all those announcements, drafts etc. on a streaming announcement section of the web page, they can reach to their targetted people by using twitter. As mentioned before market people are using effectively and even some of my collegues are following some of market associations’ twits to learn latest news of their institution. So I believe that if EMRA has a twitter address, most of market people would follow EMRA in Twitter and learn every news, updates etc. from first hand. Besides that, people can send their opinions or comments via Twitter if EMRA use Twitter effectively. I always follow their comments from other market web sites, find them useful. Of course some organisational changes might be made to deal with massive information flow from market.
2) On the other hand EMRA tries to get comments for its regulation through an assigned e-mail adress which is not known or used by common people. Only instutional or high level market participants are aware of that e-mail address. So it’s an another weakness that EMRA have to dealt with. My suggestion is that EMRA develop a comment place in its homepage which is easily be seen at first look. People make their comments here, see other people’s comments and maybe in the future which comments were took into considiration in the decision process.
3) Moreover since EMRA decisions directly affects their businesses, people are eager to debate EMRA’s intensions before it became a regulation. EMRA intensions are widely disscussed in online channels other then EMRA’s web page. Even EMRA employees need to some place to express their -mostly opposite or complimentary- views. EMRA Works in organisational structure where there is a lot of isolated groups responsible for subparts of pertinent market. Only a bunch of people knows what is being cooked. That approach leads a huge disconnections, information cumulation and disappointments within experts in the same small deparment or even in the same group. What I see is that many capable EMRA employees who find themselves out of loop try other ways. Market participant publications, articles in Association EMRA Experts’ monthly magazine are some examples those unofficial channels. This is a danger fort he Board also. Under the current structure, they can only hear a narrowed version of the situation.
Besides, regulatory literature maintains that regulators be faced with information assimetry. This means market always knows better and before the regulator. Exploiting market views is one of the most effective ways of avoiding negative effects of this phenomenon. We, all experts in EMRA charged with preparing important regulations, check our contacts in the field first to understands the needs, risks or the action market thinks is needed. Of course we’re doing that with extreme caution, knowing that there is a concept called “regulatory capture”.
It seems to be the best way an “official EMRA blog page” to meet the need of contribution within organisation and hear the voice of market. I already have discussed the issue with my colleagues and people in my market network and sensed a sincere curiosity and enthusiasm. If there is a EMRA blog where people post their opinions based on their experiences it obviously serves EMRA’s main objectives and eliminates existing the defects effectively and met everyone’s needs.
4) Aforemention internal structure necessisate to a huge amount of coordination and information gathering efforts within the personnel. Tradition way of handling this matter is face to face interviews, phone calls or e-mails every one of which is time consuming and has tendency to make errors or to overlook somethings. Fortunately we have wikis now. A wiki seems to be the perfect candidate to relieve above mentiond negative effects. But, current management style should be undergone a deep and comprehensive change, since EMRA personells have a natural inclination to stick their current ways.
5) In addition to regulate the market, EMRA is the sole producer of the most energy statistics in the country. It’s the EMRA web page who needs data to reach. EMRA publishes the data it gather from market participants but mostly in pdf or picture format which is not useful for seekers. Increasing openness by providing all data in a machine readible format, not also increase traffic rate of EMRA web site but also will serve to EMRA to achieve its “transparent energy markets” goal.
When it has the above offered features, EMRA web page could be the common communication channel of the whole industry and EMRA could have effective tools to achieve its goals, to interact with the industry, NGOs, all kind of stakeholders, to exploit opinions and experiences which are extremely important to make seamless regulations. Although there will be many arregement to do before adopting these new features, such as guidelines showing roles, responsibilities, limitations, the human quality and number of EMRA is sufficient to manage to some extra workload which might come from new tools. All needed is some courage to make the first step and considering EMRA’s previous achievements and progressive actions that no other older institutions could do, it has it.