UA 
An independent and effective energy regulator is a precondition for a well-functioning, transparent Ukrainian energy market and its integration into the European market. Yet the legislation under which Ukraine's regulator — the National Energy and Utilities Regulatory Commission (NEURC) — operates still does not fully comply with the EU acquis, under which the regulator must be independent. This can complicate and delay the coupling of the Ukrainian and EU energy markets.
This paper identifies the risks and sets out the principles and directions of reform against which legislative initiatives on NEURC's status and rules of operation should be assessed before their final adoption. It was prepared by analysts from Green Deal Ukraїna (GDU), the Kyiv Energy and Climate Lab (KECLab), the International Energy Agency (IEA) and the German-Ukrainian Bureau (DUB). The co-authors from the Ukraine Facility Platform are its co-founder Roman Vybranovskyi and Oleksandr Vizir, sectoral leader for Energy & Climate.
What the paper addresses
NEURC is defined in law as a central executive authority with special status, established by the Cabinet of Ministers. This contradicts EU practice and Energy Community requirements, which define the criteria for the independence of an energy regulator. Strengthening the Commission's institutional, operational and financial independence is one of Ukraine's core EU-integration commitments in the energy sector — and a precondition for receiving Ukraine Facility funds.
The key challenge is that changing NEURC's legal status would require constitutional amendment, which is not possible under martial law. The authors insist this is no reason to halt reform; instead, the focus should fall on improving the Law on NEURC in the following areas.
- Appointment, mandate and dismissal of Commissioners
The process for appointing NEURC members is vulnerable to political influence. To minimise this, a permanent Selection Commission should be established, with international participation. Such a commission would select candidates against transparent, merit-based criteria, using a ranked shortlist, a set deadline for the competition and safeguards against appointment blockage. There should also be a safeguard against the political blockage of the highest-ranked candidate's appointment. The law should likewise set out rules for staggered rotation and exhaustive grounds for the dismissal of NEURC members.
- Independence in day-to-day operation
The law should prohibit external influence on NEURC and support independent decision-making. This means the Cabinet of Ministers must have no veto rights and cannot suspend the regulator's acts on tariffs or its other decisions. And although anchoring the principle of independence definitively in law requires constitutional amendment, interim solutions can be adopted at the level of other legislation even under martial law.
- Financial independence
Although NEURC is financed through regulatory fees paid by market participants, its budget, staffing levels and resource management are subject to approval or oversight by state authorities. The solution is to give the regulator autonomous authority over budget execution, internal resource allocation, staffing structure and remuneration policy, without prior approval or external modification. No government body should be allowed to interfere.
- Transparency, accountability and communication
When taking decisions, NEURC should engage industry stakeholders more actively and explain the rationale for its decisions. This calls for clear conflict-of-interest and recusal rules, together with regular independent external assessments of NEURC's governance and effectiveness (for example, by the Council of European Energy Regulators (CEER) or the Energy Community).
