1. 1 Protection of the rights of consumers in Energy sector Malkhaz Dzidzikashvili 27 June - 3 July, 2008 Georgian National Energy and Water Supply Regulatory Company

2. 2 Decree N 15 of 15 August of 1997 of the National Regulatory Commission approved a Commission regulation establishing the Board of Consumers as a structural unit of the Commission; Decree N 15 of 15 August of 1997 of the National Regulatory Commission approved a Commission regulation establishing the Board of Consumers as a structural unit of the Commission; Decree of the National Regulatory Commission dated 23 September 2003 approved a new Commission regulation under which instead of the Board of Consumers a Department for Protection of Consumer Rights was founded; Decree of the National Regulatory Commission dated 23 September 2003 approved a new Commission regulation under which instead of the Board of Consumers a Department for Protection of Consumer Rights was founded; In accordance with the changes and amendments to the law of Georgia on National Independent Regulatory Bodies, in October 2003, the Commission established within the Office of Public Defender of Georgia held a contest at which a public defender of consumer rights was appointed and his deputees were selected. As a result, the existing Office of Consumer Rights Public Defender was founded independently from the Regulatory Commission; In accordance with the changes and amendments to the law of Georgia on National Independent Regulatory Bodies, in October 2003, the Commission established within the Office of Public Defender of Georgia held a contest at which a public defender of consumer rights was appointed and his deputees were selected. As a result, the existing Office of Consumer Rights Public Defender was founded independently from the Regulatory Commission; After validation by the Parliament of Georgia of the changes and amendments made into the Law of Georgia on National Independent Regulatory Bodies dated 22 June of 2003, the Commission introduced a change into its regulation and the Department for Protection of the Rights of Consumers established within it was abolished. After validation by the Parliament of Georgia of the changes and amendments made into the Law of Georgia on National Independent Regulatory Bodies dated 22 June of 2003, the Commission introduced a change into its regulation and the Department for Protection of the Rights of Consumers established within it was abolished. Background Information

3. 3 Fucntions and powers of the Office of Public Defender The main functions of the Office of Public Defendant of Consumer Interests are: To protect the interests of consumers of the electric power and natural gas; To protect the interests of consumers of the electric power and natural gas; To assess the effect of tariffs and other regulatory changes on consumers, and their outcomes; To assess the effect of tariffs and other regulatory changes on consumers, and their outcomes; To participate in preparation by the legislative and executive powers of those draft normative acts, which migh have an impact on the interests of consumers. To participate in preparation by the legislative and executive powers of those draft normative acts, which migh have an impact on the interests of consumers.

4. 4 The Office of Public Defender, in carrying out its functions, is entitled: The Office of Public Defender, in carrying out its functions, is entitled: To stand out as a party on behalf of the consumers in the Regulatory Body; To stand out as a party on behalf of the consumers in the Regulatory Body; To study all those documents and materials, romelic kanonmdeblobiT nebadarTulia maregulirebeli komisiis mier gasacnobad; To study all those documents and materials, romelic kanonmdeblobiT nebadarTulia maregulirebeli komisiis mier gasacnobad; To represent an individual consumer in dispute with a company. To represent an individual consumer in dispute with a company.

5. 5 Legal framework of the activities of the Office of Public Defender for Protection of Consumer Rights The Office of Public Defender for Protection of Consumer Rights is guided by the following normative acts: Law of Georgia on Independent National Regulatory Bodies, which specifies primary functions of the Office; Law of Georgia on Independent National Regulatory Bodies, which specifies primary functions of the Office; Law of Georgia on Protection of Consumer Rights, which specifies general rights of consumers; Law of Georgia on Protection of Consumer Rights, which specifies general rights of consumers; Law of Georgia on Electric Power and Natural Gas, which specifies obligations of suppliers; Law of Georgia on Electric Power and Natural Gas, which specifies obligations of suppliers; General administrative code of Georgia, which specifies administrative procedure, administrative bodies and their structures. General administrative code of Georgia, which specifies administrative procedure, administrative bodies and their structures.

6. 6 Financial provision of the Office of Public Defender of Consumer Rights Activities of the Office of Public Defender of Consumer Rights, as part of regulation,is financed through regulation fees paid to the Regulatory Commission; Activities of the Office of Public Defender of Consumer Rights, as part of regulation,is financed through regulation fees paid to the Regulatory Commission; Financing of the Office of Public Defender of Consumer Rights is reflected as a separate article in the budget of the Commission. Financing of the Office of Public Defender of Consumer Rights is reflected as a separate article in the budget of the Commission.

7. 7 Legal basis and requirements to the appointment of a Public Defender of Consumer Rights Basis for appointment of a Public Defender of Consumer Rights is the Law of Georgia on National Independent Regulatory Bodies; Basis for appointment of a Public Defender of Consumer Rights is the Law of Georgia on National Independent Regulatory Bodies; A Public Defender of Consumer Rights may be a person: A Public Defender of Consumer Rights may be a person: – Who has higher legal education – Who is competent in natural monopolies – Who is competent in consumer rights – Who has a license of legal practice A Public Defender of Consumer Rights may not be a member of any political party. A Public Defender of Consumer Rights may not be a member of any political party.

8. 8 To appoint a Public Defender of Consumer Rights, within the Office of Public Defender of Georgia a special Competition Commission is formed which takes a decision by majority of votes; To appoint a Public Defender of Consumer Rights, within the Office of Public Defender of Georgia a special Competition Commission is formed which takes a decision by majority of votes; A decision of a Competition Commission is effected within 10 days by order of the Chairman of the Commission; A decision of a Competition Commission is effected within 10 days by order of the Chairman of the Commission; A Public Defender of Consumer Rights is appointed for a two-year term. A Public Defender of Consumer Rights is appointed for a two-year term.

9. 9 Consumer Rights Protection Representation of the interests of consumers to the Regulatory Commission A Public Defender of Consumer Rights participates in discussions of tariffs at the Commission sessions; A Public Defender of Consumer Rights participates in discussions of tariffs at the Commission sessions; A Public Defender of Consumer Rights participates in working out of normative acts by the Commission and their discussion at the Commission sessions. A Public Defender of Consumer Rights participates in working out of normative acts by the Commission and their discussion at the Commission sessions.

10. 10 Defending public interests against company A Public Defender of Consumer Rights will study consumer applications and offer relevant proposals on eradication of violations to companies; A Public Defender of Consumer Rights will study consumer applications and offer relevant proposals on eradication of violations to companies; If proposals offered by a Public Defender of Consumer Rights are ignored by a distribution company, under agreement with the consumers, it will appeal to the Regulatory Commission to settle the dispute, or prepare relevant petitions to the court. If proposals offered by a Public Defender of Consumer Rights are ignored by a distribution company, under agreement with the consumers, it will appeal to the Regulatory Commission to settle the dispute, or prepare relevant petitions to the court.

11. 11 General information on violations of the rights of consumers By data of the Office of Public Defender of Consumer Rights, the statistics of consumer appeals to the Office by years is as follows: In 2004 - 160 applications; In 2004 - 160 applications; In 2005 - 260 applications; In 2005 - 260 applications; In 2006 - 586 applications; In 2006 - 586 applications; In 2007 - 447 applications. In 2007 - 447 applications.

12. 12 Thank you for attention