Legal Problems of Implementing the Public Service Obligation to Protect General Social Interests in the Process of Functioning the Electricity Market on Competition

Abstract

The article considers the current issues of the impact of some regulatory measures of the state on competition in the electricity market of Ukraine. The scientific work was prepared within the framework of the fundamental research topic «Theoretical and legal foundations of innovative development of the energy system» (state registration number: 0124U005149). The main aspects of the legal regulation of the imposition of the public service obligation (PSO) to ensure public interests in the functioning of the electricity market in Ukraine are identified. The regulation of the issue of imposing public service obligations in the specified area in the European Union is studied, as well as the reservations regarding the application of such a mechanism. It is established that the most common PSO in the field of the functioning of the electricity market is “PSO for households”. The advantages and positive impact of the mechanism of imposing public service obligations are analyzed, and the main disadvantages of the specified mechanism, including for competition, are substantiated. It is substantiated that the imposition of public service obligations by the state on participants in the electricity market has a significant impact on competition, and the establishment of regulated prices for electricity for the population is a fundamentally distorting measure for competition. The need for the state to determine clear conditions, content, procedure, and terms for imposing public service obligations on participants in the electricity market is stated. Recommendations are provided on replacing the mechanism of imposing public service obligations to ensure public interests in the process of functioning of the electricity market with other instruments that would provide the population with electricity in a balanced manner, taking into account the socio-economic aspect, and, at the same time, have fewer negative consequences for ensuring competition in the electricity market of Ukraine.