Foreword

Regulatory agencies are key actors in the delivery of good regulatory outcomes. Their role brings together several powers: rule-making, market monitoring, enforcement and sanctioning. Regulators are at the delivery end of the policy cycle and their job is a complex one, as it requires neutral engagement with actors that may well have inherently competing interests (such as government, current and future actors in the markets, and consumers). At the same time, markets are changing at a significant pace, due to new technologies, shifts in consumer needs and preferences, new policy priorities and the profound changes brought by the coronavirus pandemic. These changes are accompanied by high public expectations that independent economic regulators will be transparent and accountable in their decisions and actions.

Regulators will need robust technical competence and capacity, transparency, autonomy and constructive engagement with stakeholders to navigate this complex landscape. The good governance of regulators helps ensure that regulatory decisions are made on an objective and consistent basis, without conflict of interest, bias or undue influence. The rapid change in markets also requires regulators to balance their role of providing predictability and stability with the objective of facilitating and supporting investment and innovation.

To support regulators as they face these challenges, the OECD has developed a framework to assess and strengthen their organisational performance and governance structures. The framework analyses regulators’ internal and external governance, including their organisational structures, behaviour, accountability, business processes, reporting and performance management, as well as role clarity, relationships, distribution of powers and responsibilities with other government and non-government stakeholders.

This report applies this Performance Assessment Framework (PAFER) to Portugal’s Energy Services Regulatory Authority (ERSE). It finds that the ERSE is a mature and well-respected regulator, which has shown agility in taking on new roles over the past two and a half decades in support of the development of the Portuguese energy sector and outcomes for consumers. ERSE also demonstrated an advanced use of good regulatory practices through its three consultative councils, which act as a forum for creating consensus among key stakeholders.

This report is part of the OECD work programme on the governance of regulators and regulatory policy, led by the OECD Network of Economic Regulators and the OECD Regulatory Policy Committee, with the support of the Regulatory Policy Division of the OECD Directorate of Public Governance. The Directorate’s mission is to help government at all levels design and implement strategic, evidence-based and innovative policies that support sustainable economic and social development. The report was presented to the OECD Network of Economic Regulators (NER) for comments and approval at its 15th meeting in November 2020.