\ 1 1 taking, ifit is co install irs facilities in a timely and cost effective manner. With respect to public land, a utility is normally granced rights co i nstall apparatus on ehe basis that public land is co be used for ehe public good. The situacion is obviously more diffıcult when access co pr vace land is required. in general however, i a utilitywill need powers (with compulsory bac ing) over privace land to enable it co insta k ll facilicies. It is essenrial thac any due process to secure access (including arbi tration), be well defıned, speedy and cost effective, with powers laid out in rhe induscry legislation. :> 9 .STANDARDS Any developer ofa new gas market, and par- . ricularly one rhat hasa reputarion to protect in ocher escablished markecs, will clearly have every incenrive to meer appropriare rechnical, safety and reliability scandards. In rhe case ofa scartup underraking, adherence co appropriare standards will help to promote confidence in what is a relatively unknown fuel, which o ously benefıts providerand consumer alike.bFvoi r a company such as Bricish Gas, adherence co appropriate srandards is never in quesrion. :>1 0.ENFORCEMENT PROCEDURES Ali ehe above crireria need to be laid our in a Law or an Act. Such laws need to be clear, rransparenr and unambigous, but wirh a b ance srruck berween legal cerrainry an al d operational flexibility (solid foundarions and walls with a flexible inrerior). ünce ehe Laws have been laid down, they have ro be enforced, and there are a few basic pri nciples chat need co be considered when considering rhe srrucrure of ehe regulatory agency. There are rwo generally accepred approaches co enforcemenr. There is ehe Commission approach as adopted by ehe Federal Energy Regulatory Commission (FERC)in ehe USA. The Co sion conrains a range of skili and represmenmrsisa cross seccion of sociecy. Alrernacively, chere is ehe independent regulacor approach, wirh co siderable powers vesced in one individual, as n in rhe UK. Borh have rheir srrenghrs and w nesses. On balance we believe that a Commis e s a iok n approach is probably preferable. It may have adminisrrative drawbacks, but it does provide balance. The enforcement agency should b length from Government and not e s u abr j e acr t m t s o policical conrrol, either nacional or loca!. The franchisee should also have a right co appeal decisions to a Courc, or ocher form of eribunal, ® DOĞAL GAZ DERGİSİ SAYI 38 co ensure ehe overall fairness of ehe process. Regulatory powers should be limited to areas where there is ehe danger of monopoly ab char is, rhe agency should have no general ri u g s h e r co intervene, (unless ofcourse it is in rhe public iWnrheereresrr)h. ere is more rhan one regulared uriliry (e . g . gas and elecrriciry), we believe these should have separare regulacors. Otherwise, there is a risk rhat a single regulator may make trade-offs becween fuels - a matter thac should be left ro rhe market. Similarly, rhere should be no no competirion arrangemenrs with orher fue n ls. This would also clearly limit cusromer choice. :>1 1 .FINANCING ISSUES Before I begin ro sum up, I will jusr couch briefly on rhe relarionship berween regularion and projecr financing. Financing pipeline projecrs suc Europe trans h mi a s s sioe hne!inTeu drk e m pe e n ndis s c ca r n u -cT ia ulr l k y e oy n long rerm conrracrual relarionships wirh cred i tworrhy enriries. In ehe greenfıeld developmenr ofa gas induscry rhe credirworchy enriry which will underpin rhe project is going co be ehe distribution company. Withour rhegeo cal exclusivity and rhe orher factors men g r r i aop n h e i d ehe distribution company is highly unlikely to generate sufficienr revenueseither ro service irs own debc or co pay ehe transporration fees ro enable rhe rransporcacion company to service irs debt. Without fınancing chere will be no projecr and wirhouc exclusiviry rhere will be no financing. :, 12.CONCLUSIONS To sum up, regularion ofa scarr-up/greenfield gas indusrry should heed ehe lessons of hisrory and acknowledge economic realiries. in short chese are: D geographical exclusiviry for ehe distribucion and sale of gas allowing for invescmenr recovery and a reasonable !eve! of return (wichour which ehe raising of finance for any projecc would be impossible) Oprice conrrol for captive cusromers only, it is nor required for larger cusromers with alrernative fuels Dprice control rather rhan profit conrrol, which is administratively less cosrly and provides incenrives for urilities ro be efficienr Dcimely and cosr effeccive access to install new fac Dailirteigesulatory agency not subject to poli rical co crol, which allows ehe utilities ro operare efficienrl n y, wirh appeal rhrough rhe legal sysrem. in essence, greenfield gas industries must have a regulacory syscem consisrent wirh rheir level of maturity. They musr be allowed co walk before they can run.
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