Electric Power Sector Governance in Kazakhstan

ELECTRIC POWER GOVERNANCE INITIATIVE ELECTRIC POWER SECTOR GOVERNANCE IN THE REPUBLIC OF KAZAKHSTAN: INSTITUTIONAL AND CASE STUDY

Results of EGI Methods’ Application in the Republic of Kazakhstan TABLE OF CONTENT AUTHORS:

Section 1. HISTORY AND CURRENT STATUS OF Petr SVOIK Director of the establishment “Democratical Expert Evaluation. Petr Svoik Analytical ELECTRIC POWER INDUSTRY Service”, Almaty; ҚАЗАҚША 1.1 Restructuring 1.2 Generating Capacities Eduard NAZAROV Director of the Non-governmental Foundation “Central-Asian Development Institute”, 1.3 Electric Grids Nazarov Eduard Yurievich, Almaty; 1.4 Electric Power Generation and Consumption 1.5 Tariff Policy Sergey BELOV Youth Public Organization “Active Youth of NKO”, Petropavlovsk;

1.6 Sale of Electricity РУССКИЙ 1.7 Electricity Market Sara ESPENOVA Non-governmental Foundation “KAMEDA”, Astana;

Section 2. DEVELOPMENT OBJECTIVES Aziya Kurmanbayeva NGO “Committee on Non-Governmental Monitoring the Execution of Government 2.1 General Development Parameters, Goals and Programs at the Local Level”, Semey; Objectives 2.2 The balance between demand and supply with the Vadim Litvinov Non-governmental Foundation “Ecology-Youth-Initiative-Development”, Ust- growing energy consumption Kamenogorsk; ENGLISH 2.3 Development of Renewable Energy Sources and Their Integration into the National Grid Ulugbek Tnaliev Non-governmental Foundation “Center of Budget Analysis and Economic Monitoring”, 2.4 The Need to Attract the Large-Scale Investment for the Industry Atyrau. 2.5 Energy Saving and Energy Efficiency Improvement Principal Editor: Eduard Nazarov, NGF “Central-Asian Development Institute” Section 3. MAIN PRINCIPLES AND STRATEGIES FOR ELECTRIC POWER INDUSTRY DEVELOPMENT IN THE REPUBLIC OF KAZAKHSTAN 3.1 Target Model The document is prepared by a team of experts from Kazakhstan’s non-gevernmental organizations in association 3.2 Power Generation (Wholesale Market) 3.3 System Operator with the World Resources Institute (USA) and Prayas Energy Group (India), with financial support from Soros – 3.4 Transmission and Distribution of Electricity Kazakhstan Foundation. 3.5 Power Supply 3.6 Creation of Power Market The contents of this publication reflect the views of the authors and not necessarily those of the Soros Foundation-Kazakhstan. Section 4. “TRANSPARENT TARIFF” CIVIL INITIATIVE: CONTENT AND WAYS OF IMPLEMENTATION 4.1 Critical Analysis of Bureaucratic Tariff Policy 4.2 Tariff Process Transparency: Laws and Practice 4.3 Monitoring of Natural Monopolies: Regulatory Framework and Practice 4.4 General Critical Conclusion on Effective Procedure for Tariff Regulation 4.5 Offers for a Transparent and Effective Tariff Process 4.6 Principles of Organization of Annual Professional and Independent Financial and Technical Audits 4.7 Transparent Tariff Initiative: Promotion of Common Ideology and Civil Partnership Mechanisms into National Laws and Practice 4.8. Organizational Sequence of Including the Consumer into the Tariff Process

BASIC QUESTIONNAIRE ON INDICATORS

2 TABLE OF CONTENT The pilot project “Advancement of Power Supply Governance Initiative in the Republic of Kazakhstan” is the first stage of extension in Kazakhstan of international initiative of power supply governance, which is executed Section 1. HISTORY AND CURRENT STATUS OF

ELECTRIC POWER INDUSTRY according to the joint program of World Resources Institute and Prayas Energy Group (India). The Power Supply ҚАЗАҚША 1.1 Restructuring Governance Program (PSGP) is a sustainable development partnership project registered at the UN Commission 1.2 Generating Capacities on Sustainable Development. National Institute of Public Finances and Politics (India) was also involved in the 1.3 Electric Grids 1.4 Electric Power Generation and Consumption development of instruments for the Power Supply Management Project (PSGP) and pilot assessment of the program 1.5 Tariff Policy in Asian countries. Prior to execution in Kazakhstan, this Program has been executed for a number of years in the

1.6 Sale of Electricity Kyrgyz Republic, as well as in the Republic of Tajikistan. РУССКИЙ 1.7 Electricity Market The Power Supply Governance Program (PSGP) is considered as an overall initiative of the civil society, politicians, Section 2. DEVELOPMENT OBJECTIVES legislative power and other members of the power supply sector on the development of an open, accountable 2.1 General Development Parameters, Goals and Objectives decision making procedure as an integral part of social and environmental stability of power industry in the future. 2.2 The balance between demand and supply with the growing energy consumption The mission of the program consists in providing transparency, accountability and openness in the public finance ENGLISH 2.3 Development of Renewable Energy Sources and governance for the benefit of the current and future Kazakh generations. Their Integration into the National Grid 2.4 The Need to Attract the Large-Scale Investment for the Industry 2.5 Energy Saving and Energy Efficiency Improvement ANALYTICAL RESEARCH Section 3. MAIN PRINCIPLES AND STRATEGIES FOR ELECTRIC POWER INDUSTRY for the electric power industry sector of Kazakhstan as per the methods of DEVELOPMENT IN THE REPUBLIC OF KAZAKHSTAN international “Electricity Governance Initiative” and development of certain 3.1 Target Model recommendations and plans of action to increase the efficiency and openness 3.2 Power Generation (Wholesale Market) 3.3 System Operator of the sector 3.4 Transmission and Distribution of Electricity 3.5 Power Supply 3.6 Creation of Power Market

BASIC QUESTIONNAIRE ON INDICATORS

3 TABLE OF CONTENT Section 1. Section 1. HISTORY AND CURRENT STATUS OF

ELECTRIC POWER INDUSTRY ҚАЗАҚША 1.1 Restructuring HISTORY AND CURRENT STATUS OF ELECTRIC POWER INDUSTRY 1.2 Generating Capacities 1.3 Electric Grids 1.4 Electric Power Generation and Consumption 1.5 Tariff Policy Electric power industry includes generation, transmission, supply and consumption of electric

1.6 Sale of Electricity РУССКИЙ 1.7 Electricity Market and thermal power, and is the basis of the economical function and the livelihood of the country. Concerning the economy of the Republic of Kazakhstan, the electric power industry is Section 2. DEVELOPMENT OBJECTIVES of particular importance, since the key industries of the country, such as metallurgy and oil and 2.1 General Development Parameters, Goals and Objectives gas production are characterized by high energy consumption. Therefore, the competitiveness 2.2 The balance between demand and supply with the of the heavy industry of Kazakhstan and the living standards largely depend on reliable and growing energy consumption qualitative power supply to consumers at affordable prices. ENGLISH 2.3 Development of Renewable Energy Sources and Their Integration into the National Grid 2.4 The Need to Attract the Large-Scale Investment for the Industry 2.5 Energy Saving and Energy Efficiency Improvement 1.1 Restructuring

Section 3. MAIN PRINCIPLES AND STRATEGIES Historically, the formation of the current electric power industry structure of the Republic of Kazakhstan and FOR ELECTRIC POWER INDUSTRY DEVELOPMENT IN THE REPUBLIC OF appropriate economic relations were determined by conserving the capacity of the industry and its further KAZAKHSTAN development. As part of the economy’s transition to market-oriented relations, in 1995 the privatization of power 3.1 Target Model generation facilities and major industry restructuring was launched. As a result, large power plants have been 3.2 Power Generation (Wholesale Market) 3.3 System Operator allocated to the legally separated enterprises, privatized or transferred to concession. CHP with the heating 3.4 Transmission and Distribution of Electricity networks were privatized or transferred to municipal ownership. National Power Grid, which provides interregional 3.5 Power Supply and interstate electric power network, remained in state ownership. National Company JSC “KEGOC”, comprising 3.6 Creation of Power Market the national dispatch center systems’ operator (NDC SO), has been established in order to manage this grid. Section 4. “TRANSPARENT TARIFF” CIVIL On the basis of electric distribution networks of 0.4 – 110 kV, the regional grid companies (RGC’s) have been INITIATIVE: CONTENT AND WAYS OF IMPLEMENTATION established distributing the electric power at the regional level. Part of the RGC’s are privately owned, some of 4.1 Critical Analysis of Bureaucratic Tariff Policy them are in the communally owned, and the remaining is part of «Samruk-Energo» group of companies. 4.2 Tariff Process Transparency: Laws and Practice 4.3 Monitoring of Natural Monopolies: Regulatory In 2004, energy sale divisions of RGC were allocated to legally separate organizations, which become a basis for Framework and Practice establishing the energy supplying organizations (ESO) in each region. 4.4 General Critical Conclusion on Effective Procedure for Tariff Regulation In 2009, maximum tariffs were introduced for power plants, which, on the one hand, leveraged investments in the 4.5 Offers for a Transparent and Effective Tariff Process 4.6 Principles of Organization of Annual Professional modernization of existing plants, and on the other hand, have reduced the incentives for competition between and Independent Financial and Technical Audits ESO’s, as individual plants began to dictate the terms of purchase and sale of electricity to ESO depending on the 4.7 Transparent Tariff Initiative: Promotion of Common affiliation between energy-generating organization and ESO. Ideology and Civil Partnership Mechanisms into National Laws and Practice Reforming the electric power sector has led to a change in the public sector management’s form. Currently, the 4.8. Organizational Sequence of Including the Consumer into the Tariff Process state controls the electric power industry through such levers as licensing, setting maximum tariffs, regulation of natural monopolies, etc. BASIC QUESTIONNAIRE ON INDICATORS

4 TABLE OF CONTENT 1.2 Generating Capacities

Section 1. HISTORY AND CURRENT STATUS OF

ELECTRIC POWER INDUSTRY According to data from early 2013, there are 70 plants generating electric power in the UES of the Republic of ҚАЗАҚША 1.1 Restructuring Kazakhstan. Available capacity of power plants in 2012 amounted to 16,425 MW in winter and 14,851 MW in 1.2 Generating Capacities summer. Annual maximum electric load in 2012 was 14,153 MW. 1.3 Electric Grids 1.4 Electric Power Generation and Consumption 1.5 Tariff Policy Including:

1.6 Sale of Electricity РУССКИЙ 1.7 Electricity Market

Section 2. DEVELOPMENT OBJECTIVES • steam turbinepower plants – 16 448 МВт; 2.1 General Development Parameters, Goals and Objectives 2.2 The balance between demand and supply with the growing energy consumption • gas turbine power plants – 1 425 МВт; ENGLISH 2.3 Development of Renewable Energy Sources and Their Integration into the National Grid 2.4 The Need to Attract the Large-Scale Investment for the Industry • hydroelectric plants – 2 569 МВт. 2.5 Energy Saving and Energy Efficiency Improvement Share of generation sources by fuel is distributed as follows: Section 3. MAIN PRINCIPLES AND STRATEGIES FOR ELECTRIC POWER INDUSTRY DEVELOPMENT IN THE REPUBLIC OF KAZAKHSTAN • coal– 74%; 3.1 Target Model 3.2 Power Generation (Wholesale Market) 3.3 System Operator • natural gas – 3.4 Transmission and Distribution of Electricity 11%; 3.5 Power Supply 3.6 Creation of Power Market • liquid fuel– > 4%; Section 4. “TRANSPARENT TARIFF” CIVIL INITIATIVE: CONTENT AND WAYS OF IMPLEMENTATION 4.1 Critical Analysis of Bureaucratic Tariff Policy • hydroelectric plants – 10%; 4.2 Tariff Process Transparency: Laws and Practice 4.3 Monitoring of Natural Monopolies: Regulatory Framework and Practice 4.4 General Critical Conclusion on Effective Procedure • renewable energy sources (RES)– < 1%. for Tariff Regulation 4.5 Offers for a Transparent and Effective Tariff Process 4.6 Principles of Organization of Annual Professional and Independent Financial and Technical Audits 4.7 Transparent Tariff Initiative: Promotion of Common Ideology and Civil Partnership Mechanisms into National Laws and Practice 4.8. Organizational Sequence of Including the Consumer into the Tariff Process

BASIC QUESTIONNAIRE ON INDICATORS

5 1.3 Electric Grids

The power system of the Republic of Kazakhstan is conveniently divided into three zones – ҚАЗАҚША Northern, Southern and Western. РУССКИЙ ENGLISH TABLE OF CONTENT System operator – the organization responsible for centralized operational and dispatching control, parallel operation with the energy systems of other countries, maintaining the balance in the power system, provision of Section 1. HISTORY AND CURRENT STATUS OF

ELECTRIC POWER INDUSTRY ancillary services and purchase of auxiliary services in the wholesale electricity market. ҚАЗАҚША 1.1 Restructuring 1.2 Generating Capacities Currently, the JSC “KEGOC” functions as the UPS Kazakhstan system operator. 1.3 Electric Grids 1.4 Electric Power Generation and Consumption Electric power is transmitted via the national electricity network managed by the same state-owned JSC “KEGOC”. 1.5 Tariff Policy National Power Grid consists of a set of substations, switchgears, interregional and interstate transmission lines

1.6 Sale of Electricity РУССКИЙ 1.7 Electricity Market of 35 kV and above.

Section 2. DEVELOPMENT OBJECTIVES JSC “KEGOC” has in its inventory 293 power lines of 35 – 1,150 kW with a total length of 31 2.1 General Development Parameters, Goals and thousand km (by circuits). 74 electrical substations with a voltage of 35 – 1,150 kW are also in the Objectives 2.2 The balance between demand and supply with the inventory. growing energy consumption ENGLISH 2.3 Development of Renewable Energy Sources and Distribution of electricity in Kazakhstan is performed by 18 regional power companies (REC’s) and about 150 Their Integration into the National Grid small transmission companies that control electrical networks at the regional level with a voltage of 0.4 – 220 kV. 2.4 The Need to Attract the Large-Scale Investment for the Industry In Kazakhstan, there is a dependence on neighboring countries due to the lack of own main power lines, connecting: 2.5 Energy Saving and Energy Efficiency Improvement EKR and Atyrau region with the Kazakhstan UPS (linked through RF) Section 3. MAIN PRINCIPLES AND STRATEGIES FOR ELECTRIC POWER INDUSTRY SKR and Zhambyl region with the Kazakhstan UPS (link through Uzbekistan and Kyrgyzstan). DEVELOPMENT IN THE REPUBLIC OF KAZAKHSTAN Main grids are partly owned by REC’s (as non-core business) that do not allow using the potential of intersystem 3.1 Target Model transmission lines in full. Potential of electricity transition is almost never used. 3.2 Power Generation (Wholesale Market) 3.3 System Operator Electric power losses in the NPG of the Republic of Kazakshtan are slightly higher compared with the developed 3.4 Transmission and Distribution of Electricity 3.5 Power Supply countries: 3.6 Creation of Power Market • Western countries are characterized by short-distance power transmission, while Kazakhstan is characterized Section 4. “TRANSPARENT TARIFF” CIVIL by extensive (500 – 1,500 km) networks between the main centers of consumption and generation; INITIATIVE: CONTENT AND WAYS OF IMPLEMENTATION • Kazakhstan is characterized by a continental climate, which adversely affects the corona losses in electric 4.1 Critical Analysis of Bureaucratic Tariff Policy grids of 220 kV and above (share of corona loss is 20-30% of the total losses). 4.2 Tariff Process Transparency: Laws and Practice 4.3 Monitoring of Natural Monopolies: Regulatory Specified technical losses in the NPG of the Republic of Kazakhstan are within 6-7%, which is optimal for this grid Framework and Practice class. Further reduction will require large capital expenditures and will be ineffective. 4.4 General Critical Conclusion on Effective Procedure for Tariff Regulation 4.5 Offers for a Transparent and Effective Tariff Process 4.6 Principles of Organization of Annual Professional and Independent Financial and Technical Audits 4.7 Transparent Tariff Initiative: Promotion of Common Ideology and Civil Partnership Mechanisms into National Laws and Practice 4.8. Organizational Sequence of Including the Consumer into the Tariff Process

BASIC QUESTIONNAIRE ON INDICATORS

7 TABLE OF CONTENT Electric power losses in the main power lines, %

Section 1. HISTORY AND CURRENT STATUS OF

ELECTRIC POWER INDUSTRY ҚАЗАҚША 1.1 Restructuring 1.2 Generating Capacities 1.3 Electric Grids 1.4 Electric Power Generation and Consumption 1.5 Tariff Policy

1.6 Sale of Electricity РУССКИЙ 1.7 Electricity Market

Section 3. MAIN PRINCIPLES AND STRATEGIES FOR ELECTRIC POWER INDUSTRY DEVELOPMENT IN THE REPUBLIC OF KAZAKHSTAN 3.1 Target Model 3.2 Power Generation (Wholesale Market) 3.3 System Operator Total electric power losses in the transmission grids,% 3.4 Transmission and Distribution of Electricity 3.5 Power Supply 3.6 Creation of Power Market

BASIC QUESTIONNAIRE ON INDICATORS

8 TABLE OF CONTENT High wear of grid assets and incomplete adequacy of electrical grids’ topology to developmental needs of the Kazakhstan UPS require updating, modernization of existing and construction of new electrical grids. Section 1. HISTORY AND CURRENT STATUS OF

ELECTRIC POWER INDUSTRY ҚАЗАҚША 1.1 Restructuring At the beginning of 2013, the level of wear in electrical networks in Kazakhstan amounted to 1.2 Generating Capacities about 60%, decreasing by 5 percentage points compared to the same period at the beginning of 1.3 Electric Grids 1.4 Electric Power Generation and Consumption 2009. Loss rate in electric grids is an average of 13%, which is significantly higher than the grid 1.5 Tariff Policy losses in the developed European countries, which are in the range of 2.3% to 6%.

1.6 Sale of Electricity РУССКИЙ 1.7 Electricity Market High losses in electric grids in Kazakhstan are explained both by significant wear and outdated equipment and electrical grids’ topology caused by the vast territory of Kazakhstan and the associated need to transmit electricity Section 2. DEVELOPMENT OBJECTIVES over long distances (e.g. high-voltage lines «North-South»). 2.1 General Development Parameters, Goals and Objectives It should be noted that the current ownership structure in the segment of the electric power distribution and 2.2 The balance between demand and supply with the growing energy consumption transmission imposes restrictions on its development. ENGLISH 2.3 Development of Renewable Energy Sources and Their Integration into the National Grid Under the existing structure, most of the networks with voltage class above 220kV are in inventory of the JSC 2.4 The Need to Attract the Large-Scale Investment for “KEGOC”, however, a small part of the 220kV networks belongs to the REC’s, which complicates the optimization the Industry of the Kazakhstan’s UES and its development. 2.5 Energy Saving and Energy Efficiency Improvement The large number of distribution grid organizations leads to additional burden on the Agency for Regulation Section 3. MAIN PRINCIPLES AND STRATEGIES FOR ELECTRIC POWER INDUSTRY of Natural Monopolies (NMRA) – the governmental body responsible for approving tariffs for the subjects of DEVELOPMENT IN THE REPUBLIC OF natural monopolies’. This leads to limitation of the possibility to meter the individual singularities of electric grid KAZAKHSTAN 3.1 Target Model companies and the state of their assets by the NMRA. Also, the large number of distribution grid companies leads 3.2 Power Generation (Wholesale Market) to high unit costs for transmission of electricity due un-used benefits’ scale effect on distribution of maintenance 3.3 System Operator costs of electric grids and overheads. 3.4 Transmission and Distribution of Electricity 3.5 Power Supply 3.6 Creation of Power Market

BASIC QUESTIONNAIRE ON INDICATORS

9 TABLE OF CONTENT 1.4 Electric Power Generation and Consumption

Section 1. HISTORY AND CURRENT STATUS OF

ELECTRIC POWER INDUSTRY Electric power generation in 2011: ҚАЗАҚША 1.1 Restructuring 1.2 Generating Capacities 1.3 Electric Grids • Total amount – 86 203 mln. kW·h, including: 1.4 Electric Power Generation and Consumption 1.5 Tariff Policy

1.6 Sale of Electricity РУССКИЙ 1.7 Electricity Market • thermal electric power plants 73,031.3 mln. kW·h Section 2. DEVELOPMENT OBJECTIVES 2.1 General Development Parameters, Goals and Objectives • hydroelectric power plants 7,849.0 mln. kW·h 2.2 The balance between demand and supply with the growing energy consumption ENGLISH 2.3 Development of Renewable Energy Sources and Their Integration into the National Grid • gas turbine power plants 5,322.7 mln. kW·h. 2.4 The Need to Attract the Large-Scale Investment for the Industry 2.5 Energy Saving and Energy Efficiency Improvement Associated thermal energy generation in 2010:

Section 3. MAIN PRINCIPLES AND STRATEGIES FOR ELECTRIC POWER INDUSTRY DEVELOPMENT IN THE REPUBLIC OF Total amount – 172.4 mln. Gcal, including: KAZAKHSTAN 3.1 Target Model 3.2 Power Generation (Wholesale Market) 3.3 System Operator • TPP 56.5 mln. Gcal 3.4 Transmission and Distribution of Electricity 3.5 Power Supply 3.6 Creation of Power Market Other heat sources 115.9 mln. Gcal Section 4. “TRANSPARENT TARIFF” CIVIL INITIATIVE: CONTENT AND WAYS OF Electric power generation in Kazakhstan in 2012 has increased by 4.7% compared to 2011 and IMPLEMENTATION 4.1 Critical Analysis of Bureaucratic Tariff Policy 4.2 Tariff Process Transparency: Laws and Practice amounted to 90,248 mln. kW·h, including: 4.3 Monitoring of Natural Monopolies: Regulatory Framework and Practice 4.4 General Critical Conclusion on Effective Procedure for Tariff Regulation • steam turbine power plants – ; 4.5 Offers for a Transparent and Effective Tariff Process 76,664 mln. kW·h 4.6 Principles of Organization of Annual Professional and Independent Financial and Technical Audits 4.7 Transparent Tariff Initiative: Promotion of Common • Ideology and Civil Partnership Mechanisms into gas turbine power plants – 5,976 mln. kW·h; National Laws and Practice 4.8. Organizational Sequence of Including the Consumer into the Tariff Process • hydroelectric power plants – 7,608 mln. kW·h. BASIC QUESTIONNAIRE ON INDICATORS

10 TABLE OF CONTENT In 2012 electric power consumption in Kazakhstan has increased by compared to Section 1. HISTORY AND CURRENT STATUS OF 3.8%

ELECTRIC POWER INDUSTRY ҚАЗАҚША 1.1 Restructuring 1.2 Generating Capacities 2011, up to 91,444 mln. kW·h. 1.3 Electric Grids 1.4 Electric Power Generation and Consumption Electric power generation in RK 1.5 Tariff Policy

1.6 Sale of Electricity РУССКИЙ 1.7 Electricity Market

Section 3. MAIN PRINCIPLES AND STRATEGIES FOR ELECTRIC POWER INDUSTRY DEVELOPMENT IN THE REPUBLIC OF KAZAKHSTAN 3.1 Target Model 3.2 Power Generation (Wholesale Market) 3.3 System Operator 3.4 Transmission and Distribution of Electricity Electric power consumption in 2012 has amounted to a total of 91.44bln kW-hincluding by areas: 3.5 Power Supply 3.6 Creation of Power Market

Section 4. “TRANSPARENT TARIFF” CIVIL • Northern area 62.6 bln. kWh or 68,5% INITIATIVE: CONTENT AND WAYS OF IMPLEMENTATION 4.1 Critical Analysis of Bureaucratic Tariff Policy 4.2 Tariff Process Transparency: Laws and Practice • Western area – 9.9 bln. kWh or 10,8% 4.3 Monitoring of Natural Monopolies: Regulatory Framework and Practice 4.4 General Critical Conclusion on Effective Procedure for Tariff Regulation • Southern area – or 4.5 Offers for a Transparent and Effective Tariff Process 19.0 bln. kWh 20,7% 4.6 Principles of Organization of Annual Professional and Independent Financial and Technical Audits 4.7 Transparent Tariff Initiative: Promotion of Common Ideology and Civil Partnership Mechanisms into National Laws and Practice 4.8. Organizational Sequence of Including the Consumer into the Tariff Process

BASIC QUESTIONNAIRE ON INDICATORS

11 TABLE OF CONTENT Electric power consumption by industries:

Section 1. HISTORY AND CURRENT STATUS OF

ELECTRIC POWER INDUSTRY ҚАЗАҚША 1.1 Restructuring 1.2 Generating Capacities 1.3 Electric Grids 1.4 Electric Power Generation and Consumption 1.5 Tariff Policy

1.6 Sale of Electricity РУССКИЙ 1.7 Electricity Market

Section 3. MAIN PRINCIPLES AND STRATEGIES FOR ELECTRIC POWER INDUSTRY DEVELOPMENT IN THE REPUBLIC OF KAZAKHSTAN 3.1 Target Model Industrial enterprises are the main power consumers. 3.2 Power Generation (Wholesale Market) 3.3 System Operator The main consumers of electricity and heat concentrated are located in the north of Kazakhstan. 3.4 Transmission and Distribution of Electricity 3.5 Power Supply As of 2013 in Kazakhstan there was a shortage of electric power of about 2,000 MW (including 1,000 MW – 3.6 Creation of Power Market maneuvering capacity).

Section 4. “TRANSPARENT TARIFF” CIVIL INITIATIVE: CONTENT AND WAYS OF IMPLEMENTATION 4.1 Critical Analysis of Bureaucratic Tariff Policy 1.5 Tariff Policy 4.2 Tariff Process Transparency: Laws and Practice 4.3 Monitoring of Natural Monopolies: Regulatory Electric power transmission and distribution services in Kazakhstan belong to the sphere of natural monopolies Framework and Practice and regulated by the Natural Monopolies Regulation Agency (NMRA). 4.4 General Critical Conclusion on Effective Procedure Under the current legislation, tariffs for Tariff Regulation of the grid companies should provide compensation of costs necessary for provision of regulated 4.5 Offers for a Transparent and Effective Tariff Process 4.6 Principles of Organization of Annual Professional services, as well as the implementation of the investment program. and Independent Financial and Technical Audits 4.7 Transparent Tariff Initiative: Promotion of Common For the purpose of tariff regulation for JSC “KEGOC” and small distribution companies the so-called regulatory Ideology and Civil Partnership Mechanisms into method is used, under which the tariff is approved at a level sufficient to compensate the operating and capital National Laws and Practice costs of the grid organization. In a general manner upwards tariff revision is performed no more than once a year. 4.8. Organizational Sequence of Including the Consumer into the Tariff Process Regulatory method has several drawbacks: 1. Lack of incentives for cost optimization because the cost reduction leads to a reduction of the tariff in the next BASIC QUESTIONNAIRE ON INDICATORS regulatory period.

12 TABLE OF CONTENT 2. Annual approval of capital investments of the grid organization creates additional risks in implementing long-term investment projects. Section 1. HISTORY AND CURRENT STATUS OF ELECTRIC POWER INDUSTRY 3. The complexity of the annual tariff revision process for the grid organization and NMRA. ҚАЗАҚША 1.1 Restructuring 1.2 Generating Capacities Since January 1, 2013 the REC tariffs are regulated under the comparative analysis method, according to which 1.3 Electric Grids the tariffs are approved for three years with the possibility of annual adjustment. One of the main reasons of this 1.4 Electric Power Generation and Consumption 1.5 Tariff Policy method is to increase the REC’s efficiency, but its use has revealed a number of problems:

1.6 Sale of Electricity РУССКИЙ 1.7 Electricity Market 1. Opacity of the tariff calculation method (in particular, the values of the X-factor) and, as a consequence, reduction in the sector’s investment attractiveness. Section 2. DEVELOPMENT OBJECTIVES 2.1 General Development Parameters, Goals and 2. Limitation in the applicability of this technique due to REC’s incompatibility. Objectives 2.2 The balance between demand and supply with the It should also be noted that in practice, while approving tariffs of the grid organizations, reflection of the fair growing energy consumption value cost in the tariff often occurs not in full due to restrictions on the tariffs growth rate for end-users and the ENGLISH 2.3 Development of Renewable Energy Sources and fact that the tariffs of grid organizations are approved on leftovers after the approval of tariffs for electric power Their Integration into the National Grid 2.4 The Need to Attract the Large-Scale Investment for generating organizations. the Industry 2.5 Energy Saving and Energy Efficiency Improvement In general, the regulatory tariff setting framework is as follows: Section 3. MAIN PRINCIPLES AND STRATEGIES Applicable procedure for approval of conventional (operational) tariffs: FOR ELECTRIC POWER INDUSTRY DEVELOPMENT IN THE REPUBLIC OF Tariffs for transportation of electric power and all tariffs for heat, water and gas supply are approved by the KAZAKHSTAN 3.1 Target Model Natural Monopolies Regulation Agency (NMRA) in the form of a tariff budget. «Rules for the special procedure 3.2 Power Generation (Wholesale Market) of cost efficiency with approval of tariffs for the regulated services of natural monopoly entities» serve as a 3.3 System Operator basic document. 3.4 Transmission and Distribution of Electricity 3.5 Power Supply The special procedure includes following provisions: 3.6 Creation of Power Market 1) regulation of costs included in the tariff (price, charge rate); Section 4. “TRANSPARENT TARIFF” CIVIL INITIATIVE: CONTENT AND WAYS OF 2) limitation of expenditure items of the natural monopoly entity within technical and technological standards IMPLEMENTATION for consumption of raw materials, fuel, energy, as well as standard technical losses; 4.1 Critical Analysis of Bureaucratic Tariff Policy 4.2 Tariff Process Transparency: Laws and Practice 3) establishing a list of expenses that are not accounted for in the tariff formation; 4.3 Monitoring of Natural Monopolies: Regulatory Framework and Practice 4) limitation of profit included in the tariff (price, charge rate); 4.4 General Critical Conclusion on Effective Procedure for Tariff Regulation 5) coordination of applied methods of fixed asset depreciation; 4.5 Offers for a Transparent and Effective Tariff Process 4.6 Principles of Organization of Annual Professional 6) coordination of the fixed asset revaluation and the use of depreciation funds provided by the tariff estimates and Independent Financial and Technical Audits of the natural monopoly entity. 4.7 Transparent Tariff Initiative: Promotion of Common Ideology and Civil Partnership Mechanisms into Depending on the significance, the tariffs are approved (agreed) by the central bodies of the NMRA orlocal National Laws and Practice 4.8. Organizational Sequence of Including the Consumer Departments. into the Tariff Process Application for tariff increase can be submitted no more than once a year. BASIC QUESTIONNAIRE ON INDICATORS The tariff is defined as the quotient of all costs included in the tariff budget cost estimate for net electricity supply.

13 TABLE OF CONTENT Tariff estimate is prepared and approved for a future period i.e. a year or several years (three years for «medium» and seven years for «maximum» tariffs) in advance. Accordingly, the cost items, generation amounts and production Section 1. HISTORY AND CURRENT STATUS OF

ELECTRIC POWER INDUSTRY losses included in tariff estimates are tentative. ҚАЗАҚША 1.1 Restructuring 1.2 Generating Capacities Prior to approval of tariff estimate, the Authorized Body shall conduct a public hearing. 1.3 Electric Grids Applicable procedure for approval of maximum, estimated and individual tariffs for power plants: 1.4 Electric Power Generation and Consumption 1.5 Tariff Policy According to the “Electricity Act”:

1.6 Sale of Electricity РУССКИЙ 1.7 Electricity Market • Maximum tariffs shall be approved by the Government as advised by the Authorized Body on groups of energy generating organizations for at least seven years, broken down by year, and shall be adjusted Section 2. DEVELOPMENT OBJECTIVES 2.1 General Development Parameters, Goals and annually considering the need for provision of investment attractiveness of the industry; Objectives 2.2 The balance between demand and supply with the • Maximum tariff shall be determined based on the maximum actual price prevailing in the respective group growing energy consumption of energy generating organizations for the previous year, considering the increase in the cost of maintaining ENGLISH 2.3 Development of Renewable Energy Sources and operable and a technically sound state for existing assets, their extension, renewal, reconstruction and Their Integration into the National Grid 2.4 The Need to Attract the Large-Scale Investment for technical upgrading, creation of new assets, the projected growth of the prices for energy fuels, including the Industry inflation processes; 2.5 Energy Saving and Energy Efficiency Improvement • The energy generating organization shall independently set the selling price for electricity, which shall Section 3. MAIN PRINCIPLES AND STRATEGIES not exceed the limiting tariff of its corresponding group; FOR ELECTRIC POWER INDUSTRY DEVELOPMENT IN THE REPUBLIC OF KAZAKHSTAN • Should the Organization’s investment obligations cannot be implemented using the funds received under 3.1 Target Model maximum tariffs, it shall apply the estimated or individual tariff for implementation of the Investment 3.2 Power Generation (Wholesale Market) Program, provided that the Investment Agreement will be approved by the Authorized Body and the 3.3 System Operator Government Authority; 3.4 Transmission and Distribution of Electricity 3.5 Power Supply • In order to apply the estimated tariff, the Terms of Reference will be approved by the Authorized Body 3.6 Creation of Power Market under the application of the Organization and the Investment Program Feasibility Study approved by the Section 4. “TRANSPARENT TARIFF” CIVIL Organization itself; INITIATIVE: CONTENT AND WAYS OF IMPLEMENTATION • In order to apply the individual tariff, it will, in additional be required to calculate the costs of fuel, raw 4.1 Critical Analysis of Bureaucratic Tariff Policy materials, wages, repairs, taxes and environmental charges, depreciation and other costs related directly 4.2 Tariff Process Transparency: Laws and Practice to generation, as well as to calculate the profit and compensation expense on financing. 4.3 Monitoring of Natural Monopolies: Regulatory Framework and Practice In fact, the maximum tariffs for electricity generation are approved by the Government for the period between the 4.4 General Critical Conclusion on Effective Procedure for Tariff Regulation years 2009 and 2015, with an annual total growth rate exceeding the planned inflation. 4.5 Offers for a Transparent and Effective Tariff Process 4.6 Principles of Organization of Annual Professional Applicable procedure for the approval of investment tariffs for NATURAL MONOPOLY ENTITIES: and Independent Financial and Technical Audits 4.7 Transparent Tariff Initiative: Promotion of Common Investment tariff or its limit level is approved by the Authorized Body within one investment project for regulated Ideology and Civil Partnership Mechanisms into services, rendered on the newly created objects and acting until complete payback of nested investments. National Laws and Practice 4.8. Organizational Sequence of Including the Consumer National and local investment programs shall be submitted for consideration and approval to the Authorized into the Tariff Process Body together with the application for the medium term tariff approval.

BASIC QUESTIONNAIRE ON INDICATORS Investment programs shall be appended with following: 1) conclusions of technical and financial expertise;

14 TABLE OF CONTENT 2) Applicant’s evaluation of the investment program impact to the development of the demand for regulated services provided by the Applicant; Section 1. HISTORY AND CURRENT STATUS OF ELECTRIC POWER INDUSTRY 3) information on the implementation costs of the investment program, confirmed by market research on the ҚАЗАҚША 1.1 Restructuring 1.2 Generating Capacities cost of fixed assets and other property required for the project implementation; 1.3 Electric Grids 4) Applicant’s assessment of the economic efficiency of investments, including calculations of reducing the costs 1.4 Electric Power Generation and Consumption 1.5 Tariff Policy of provision of regulated services, reducing regulatory and excessive losses, improving service quality and

1.6 Sale of Electricity increasing system’s reliability; РУССКИЙ 1.7 Electricity Market 5) possible terms of financing and repayment of the same, including such through the issuance of securities and Section 2. DEVELOPMENT OBJECTIVES raising loans; 2.1 General Development Parameters, Goals and Objectives 6) results of the revaluation of fixed assets by groups; 2.2 The balance between demand and supply with the growing energy consumption 7) if the funds are allocated from the budget for implementation of investment program or loans are involved ENGLISH 2.3 Development of Renewable Energy Sources and (investments) under the Governmental guarantee, then the documents shall be submitted confirming the Their Integration into the National Grid 2.4 The Need to Attract the Large-Scale Investment for amount and terms of financing. the Industry 2.5 Energy Saving and Energy Efficiency Improvement Authorized Body conducts the economic and financial evaluation of the investment programs’ effectiveness.

Section 3. MAIN PRINCIPLES AND STRATEGIES The reasons for refusal to accept the investment programs for consideration by the Authorized Body are as follows: FOR ELECTRIC POWER INDUSTRY DEVELOPMENT IN THE REPUBLIC OF 1) Applicant’s violation of the deadlines for the investment program submission; KAZAKHSTAN 3.1 Target Model 2) Applicant’s failure to provide abovementioned documents. 3.2 Power Generation (Wholesale Market) 3.3 System Operator 3.4 Transmission and Distribution of Electricity The Authorized Body shall, within 7 working days verify the completeness of submitted materials and notify in 3.5 Power Supply written the Applicant on the investment program’s acceptance for consideration or on its refusal, clarifying the 3.6 Creation of Power Market reasons for this refusal.

Section 4. “TRANSPARENT TARIFF” CIVIL Applicable procedure for approval of maximum, differential and compensating tariffs for the СЕМ: INITIATIVE: CONTENT AND WAYS OF IMPLEMENTATION • The maximum tariff level is the maximum value of tariff for regulated service of the CEM approved for the 4.1 Critical Analysis of Bureaucratic Tariff Policy medium or long term. 4.2 Tariff Process Transparency: Laws and Practice 4.3 Monitoring of Natural Monopolies: Regulatory • Tariffs or their limits approved by the authorized body shall not be less than the cost of the expenditure Framework and Practice 4.4 General Critical Conclusion on Effective Procedure required to provide regulated services, and shall consider the possibility of making a profit, ensuring the for Tariff Regulation natural monopoly entities’ effective functioning; 4.5 Offers for a Transparent and Effective Tariff Process 4.6 Principles of Organization of Annual Professional • Differentiated tariff is a tariff for regulated services approved by the Authorized Body differentiated by and Independent Financial and Technical Audits consumer groups and (or) the amounts of consumption; 4.7 Transparent Tariff Initiative: Promotion of Common Ideology and Civil Partnership Mechanisms into • National Laws and Practice Temporary compensating tariff is a tariff set by the Authorized Body to compensate for damages caused 4.8. Organizational Sequence of Including the Consumer to consumers; into the Tariff Process • Tariff using the comparative analysis method is a tariff approved in accordance with the method of tariff

BASIC QUESTIONNAIRE ON INDICATORS calculation using the comparative analysis method, approved by the Authorized Body in coordination with the state authority controlling the area of electric energy industry for each regional electric grid company for three years, broken down by year and adjusted annually considering its operational effectiveness.

15 TABLE OF CONTENT Basically until 2009, the tariff policy has only been carried out taking into account the contribution of regulated services in inflation. Accordingly, the existing tariffs level was insufficient for reliable operation and development Section 1. HISTORY AND CURRENT STATUS OF

ELECTRIC POWER INDUSTRY of the regional distribution companies. The investment level in regional electric grids remained unacceptably low. ҚАЗАҚША 1.1 Restructuring This led to high risks for the large-scale investments with long payback periods. 1.2 Generating Capacities 1.3 Electric Grids Tariff policy had an invalid and unconfirmed nature and a transparent and open approach was not provided while 1.4 Electric Power Generation and Consumption considering the applications for tariff increases. 1.5 Tariff Policy

1.6 Sale of Electricity • In order to solve the investment problems in 2009 a system of maximum tariffs set by the Government РУССКИЙ 1.7 Electricity Market was introduced for power plants for a period of at least 7 years;

Section 2. DEVELOPMENT OBJECTIVES • Tariffs consider investments necessary for the reconstruction and modernization; 2.1 General Development Parameters, Goals and Objectives • Investment commitments adopted «in exchange» for the maximum tariffs are subject to control by the 2.2 The balance between demand and supply with the Authorized body. growing energy consumption ENGLISH 2.3 Development of Renewable Energy Sources and Their Integration into the National Grid Maximum tariffs by years 2.4 The Need to Attract the Large-Scale Investment for № Group the Industry 2011 2015 2.5 Energy Saving and Energy Efficiency Improvement 1 EGRES-1, 2, ECE 5,6 8,8 Section 3. MAIN PRINCIPLES AND STRATEGIES FOR ELECTRIC POWER INDUSTRY 2 ZhGRES 6,9 8,7 DEVELOPMENT IN THE REPUBLIC OF KAZAKHSTAN 3 KarTPP-1-3,Pavl TPP-1,3, UKTPP, Astana-Energy TPP 1,2 5,4 7,5 3.1 Target Model 3.2 Power Generation (Wholesale Market) 4 KarGRES-2, Pav. TPP-2, Balkhash, Zhezkaz. TPP 4,1 6,0 3.3 System Operator 3.4 Transmission and Distribution of Electricity 5 Petropavl. TPP, Ridder. TPP, Rudnens. TPP 4,8 8,05 3.5 Power Supply 3.6 Creation of Power Market 6 Sogr. TPP, KarGRES-1, Stepn. TPP 7,7 8,3

Section 4. “TRANSPARENT TARIFF” CIVIL 7 Shymk. TPP-3, Atyrau, Aktobe, Zhamb. TPP-4, Kzyord. TPP 5,9 7,3 INITIATIVE: CONTENT AND WAYS OF IMPLEMENTATION 8 Kentau TPP, Tekel. TPP, Shakht TPP, Ekib. TPP) 5,4 7,5 4.1 Critical Analysis of Bureaucratic Tariff Policy 4.2 Tariff Process Transparency: Laws and Practice 9 Arkalyk TPP, Kostanay TPP, Uralskaya TPP) 5,88 7,6 4.3 Monitoring of Natural Monopolies: Regulatory Framework and Practice 10 «AlES» 7,1 8,6 4.4 General Critical Conclusion on Effective Procedure for Tariff Regulation 11 «MAEK» 7,23 7,83 4.5 Offers for a Transparent and Effective Tariff Process 4.6 Principles of Organization of Annual Professional 12 GTPP (Akturbo, Zhanazholskaya) 6,4 8,8 and Independent Financial and Technical Audits 4.7 Transparent Tariff Initiative: Promotion of Common 13 HPP (Bukhtarma, Ust-Kamenogorsk., Shulbinskaya, Shardarinskaya) 3,3 4,5 Ideology and Civil Partnership Mechanisms into National Laws and Practice 4.8. Organizational Sequence of Including the Consumer However, in the same token, the maximum tariff mechanism introduced: into the Tariff Process • does not provide motivation for providing new electricity generation;

BASIC QUESTIONNAIRE ON INDICATORS • prevents formation of a single wholesale electricity market and reduces the transparency of market transactions;

16 TABLE OF CONTENT • does not provide proper efficiency control over accumulated funds for the development of generation during the investment program’s approval and implementation stage. Section 1. HISTORY AND CURRENT STATUS OF

ELECTRIC POWER INDUSTRY ҚАЗАҚША 1.1 Restructuring 1.2 Generating Capacities 1.3 Electric Grids 1.6 Sale of Electricity 1.4 Electric Power Generation and Consumption 1.5 Tariff Policy Today in the Republic of Kazakhstan 179 power supply organizations (ESO’s) are registered, 40 of which are subject

1.6 Sale of Electricity to regulation under the law «On natural monopolies and regulated markets.» РУССКИЙ 1.7 Electricity Market In the energy supply sector the following problem can be highlighted, solution to which will enable development Section 2. DEVELOPMENT OBJECTIVES of a marketing segment: system inefficiency for tariff formation and administration. 2.1 General Development Parameters, Goals and Objectives Currently, tariffs forpower plants and power grid organizations are approved at different times during the year, 2.2 The balance between demand and supply with the which leads to a need to harmonize the ESO tariff with NMRA several times a year. growing energy consumption ENGLISH 2.3 Development of Renewable Energy Sources and In addition, the mechanism for determining the sales mark-up value is not transparent. Thus, the value of sales Their Integration into the National Grid mark-up for various ESO’s presents a wide range, which is explained by the distribution of overhead costs for 2.4 The Need to Attract the Large-Scale Investment for the Industry different electricity sales costs. 2.5 Energy Saving and Energy Efficiency Improvement Inconsistency between differentiated ESO tariffs and wholesale electricity market is also one of the sector problems. ESO’s purchase electricity from power plants under uniform tariffs throughout the day and sell it according to the Section 3. MAIN PRINCIPLES AND STRATEGIES FOR ELECTRIC POWER INDUSTRY tariff differentiation (based on the time of day), which leads to losses incurred by the ESO. DEVELOPMENT IN THE REPUBLIC OF KAZAKHSTAN Also the rejection of cross-subsidization is required in the generation of thermal and electric power on the TPP’s. 3.1 Target Model The practice of cross-subsidization reduces the investment attractiveness of the TPP construction projects due 3.2 Power Generation (Wholesale Market) to overvaluation of electric energy generated by the TPP, thereby electric energy becomes uncompetitive on the 3.3 System Operator 3.4 Transmission and Distribution of Electricity wholesale market. In this case, co-generation of thermal and electric energy is by far the most energy efficient 3.5 Power Supply technology. 3.6 Creation of Power Market

BASIC QUESTIONNAIRE ON INDICATORS

17 TABLE OF CONTENT 1.7 Electricity Market

Section 1. HISTORY AND CURRENT STATUS OF

ELECTRIC POWER INDUSTRY Simplified electric enegrgy market model (existing) ҚАЗАҚША 1.1 Restructuring 1.2 Generating Capacities 1.3 Electric Grids 1.4 Electric Power Generation and Consumption 1.5 Tariff Policy

1.6 Sale of Electricity РУССКИЙ 1.7 Electricity Market

BASIC QUESTIONNAIRE ON INDICATORS

18 TABLE OF CONTENT

Section 1. HISTORY AND CURRENT STATUS OF

ELECTRIC POWER INDUSTRY ҚАЗАҚША 1.1 Restructuring 1.2 Generating Capacities 1.3 Electric Grids 1.4 Electric Power Generation and Consumption 1.5 Tariff Policy

1.6 Sale of Electricity РУССКИЙ 1.7 Electricity Market

Section 4. “TRANSPARENT TARIFF” CIVIL INITIATIVE: CONTENT AND WAYS OF IMPLEMENTATION 4.1 Critical Analysis of Bureaucratic Tariff Policy 4.2 Tariff Process Transparency: Laws and Practice 4.3 Monitoring of Natural Monopolies: Regulatory Framework and Practice Electricity market of the Republic of Kazakhstan consists of two levels: the wholesale and retail electricity markets. 4.4 General Critical Conclusion on Effective Procedure for Tariff Regulation Subjects of the wholesale electricity market are: 4.5 Offers for a Transparent and Effective Tariff Process • energy generating organizations that supply electricity to the wholesale market in the amount of at least 4.6 Principles of Organization of Annual Professional and Independent Financial and Technical Audits 1 MW average daily (base) capacity; 4.7 Transparent Tariff Initiative: Promotion of Common Ideology and Civil Partnership Mechanisms into • electricity consumers purchasing electricity on the wholesale market in the amount of at least 1 MW National Laws and Practice average daily (base) capacity; 4.8. Organizational Sequence of Including the Consumer into the Tariff Process • Kazakhstan Electricity Grid Operating Company JSC «KEGOC», also serving as the System Operator;

BASIC QUESTIONNAIRE ON INDICATORS • regional electricity companies (REC’s); • energy supplying organizations without their own grids and purchasing electricity on the wholesale market in order to resell it in the amount of at least 1 MW of average daily (base) capacity; 19 TABLE OF CONTENT • centralized electricity trading operator (JSC «KOREM»).

Section 1. HISTORY AND CURRENT STATUS OF Wholesale electricity market of the Republic of Kazakhstan consists of following submarkets:

ELECTRIC POWER INDUSTRY ҚАЗАҚША 1.1 Restructuring • bilateral trading market with contracts directly between wholesale electricity buyers and sellers; 1.2 Generating Capacities 1.3 Electric Grids • centralized trading market – exchange trading conducting auctions in order to enter new contracts: spot 1.4 Electric Power Generation and Consumption (for each hour of the upcoming day) and forward (for the year, month and week in advance); 1.5 Tariff Policy

1.6 Sale of Electricity • balancing market for sales and purchase of variations between contractual electricity delivery and РУССКИЙ 1.7 Electricity Market consumption rates, operating in real time mode. Today, the balancing market operates in simulation mode;

Section 2. DEVELOPMENT OBJECTIVES • system and auxiliary services market, where services, which are required to ensure the operational reliability 2.1 General Development Parameters, Goals and of the UES of Republic of Kazakhstan and compliance with electric power quality standards are sold,. Objectives 2.2 The balance between demand and supply with the

In 2009, after the introduction of maximum tariffs for electricity generation services, the bulk electricity on the ENGLISH growing energy consumption 2.3 Development of Renewable Energy Sources and wholesale market is supplied on the basis of medium- or long-term bilateral contracts entered between the Their Integration into the National Grid electricity wholesalers and wholesale buyers. The remaining submarkets of the electricity wholesale market 2.4 The Need to Attract the Large-Scale Investment for model practically do not operate. the Industry 2.5 Energy Saving and Energy Efficiency Improvement The balancing electricity market operates since 2008 in a simulation mode for the following reasons: Section 3. MAIN PRINCIPLES AND STRATEGIES • Lack of reserve capacities; FOR ELECTRIC POWER INDUSTRY DEVELOPMENT IN THE REPUBLIC OF • NMRA’s fears concerning the uncontrolled growth of tariffs; KAZAKHSTAN 3.1 Target Model • Lack of automatic system for commercial measurement of power consumption for most of the wholesale 3.2 Power Generation (Wholesale Market) 3.3 System Operator market subjects; 3.4 Transmission and Distribution of Electricity • The presence of «market sharing» between power generations; 3.5 Power Supply 3.6 Creation of Power Market • Lack of cold reserve power input mechanisms.

Section 4. “TRANSPARENT TARIFF” CIVIL The retail market subjects are regional power plants, regional energy companies, energy supplying organizations INITIATIVE: CONTENT AND WAYS OF IMPLEMENTATION and consumers, do not have a right to buy electricity on the wholesale market. 4.1 Critical Analysis of Bureaucratic Tariff Policy The following problems in the electricity market model constrain the development of electric power industry of 4.2 Tariff Process Transparency: Laws and Practice 4.3 Monitoring of Natural Monopolies: Regulatory the Republic of Kazakhstan: Framework and Practice 4.4 General Critical Conclusion on Effective Procedure 1) Electricity exchange market, which aims to provide the market participants with price signals, is illiquid and for Tariff Regulation does not fulfill its function. 4.5 Offers for a Transparent and Effective Tariff Process 4.6 Principles of Organization of Annual Professional 2) Balancing market, stimulating the participants to plan their consumption qualitatively and encouraging and Independent Financial and Technical Audits producers to execute commands of the System Operator, does not work. 4.7 Transparent Tariff Initiative: Promotion of Common Ideology and Civil Partnership Mechanisms into National Laws and Practice 3) Lack of hourly automatic system for commercial measurement of power consumption does not allow correct 4.8. Organizational Sequence of Including the Consumer distribution of intra-day volume of consumption between wholesale market participants and, consequently, into the Tariff Process the intra-day price fluctuations.

BASIC QUESTIONNAIRE ON INDICATORS 4) The current mechanism of maximum tariffs does not provide sufficient incentives for the construction of new generating facilities. 5) Lack of mechanism to guarantee investments in power generation. 20 TABLE OF CONTENT 6) Tariff regulation does not create incentives to increase the efficiency of electricity generators.

Section 1. HISTORY AND CURRENT STATUS OF 7) Lack of a clear vision of wholesale electricity market model after 2015.

ELECTRIC POWER INDUSTRY ҚАЗАҚША 1.1 Restructuring 8) Legislative ban on the payment of dividends restricts the possibility to obtain the necessary income. 1.2 Generating Capacities 1.3 Electric Grids In general, the electricity market in Kazakhstan is «mixed»: elements of state regulation are 1.4 Electric Power Generation and Consumption imposed on the market mechanisms introduced into the energy industry. 1.5 Tariff Policy

1.6 Sale of Electricity Ways to further improve and develop shall be identified. РУССКИЙ 1.7 Electricity Market Market model is a competitive market with free pricing. Section 2. DEVELOPMENT OBJECTIVES 2.1 General Development Parameters, Goals and Model of state regulation – state is responsible for profitability of private companies and technical condition of Objectives facilities. 2.2 The balance between demand and supply with the growing energy consumption ENGLISH 2.3 Development of Renewable Energy Sources and Their Integration into the National Grid 2.4 The Need to Attract the Large-Scale Investment for the Industry 2.5 Energy Saving and Energy Efficiency Improvement

BASIC QUESTIONNAIRE ON INDICATORS

21 TABLE OF CONTENT Section 2. Section 1. HISTORY AND CURRENT STATUS OF

ELECTRIC POWER INDUSTRY ҚАЗАҚША 1.1 Restructuring DEVELOPMENT OBJECTIVES 1.2 Generating Capacities 1.3 Electric Grids 1.4 Electric Power Generation and Consumption 1.5 Tariff Policy

1.6 Sale of Electricity 2.1 General Development Parameters, Goals and Objectives РУССКИЙ 1.7 Electricity Market Upon the request of «Samruk- Energo» and the Terms of Reference agreed by MINT, the Russian consulting company Section 2. DEVELOPMENT OBJECTIVES 2.1 General Development Parameters, Goals and “Strategy Partners Group” has elaborated a draft «Concept of electricity development in the Republic of Kazakhstan Objectives until 2030». Information described herein and the following two sections are mainly based on this document. 2.2 The balance between demand and supply with the growing energy consumption A key purpose is to ensure a balanced and sustainable development of the electric power industry of Kazakhstan, ENGLISH 2.3 Development of Renewable Energy Sources and considering strategic interests of the state, which shall take into account the need to ensure continued economic Their Integration into the National Grid 2.4 The Need to Attract the Large-Scale Investment for growth, improved quality of life and strengthen the energy security of the country. the Industry 2.5 Energy Saving and Energy Efficiency Improvement Balanced and sustainable development of the electric power industry is complicated by the formation of weak incentives for the industry participants to increase efficiency. Best organic way to improve efficiency is the use of Section 3. MAIN PRINCIPLES AND STRATEGIES best management practices and modern technologies considering economic and cultural realities of the Republic FOR ELECTRIC POWER INDUSTRY DEVELOPMENT IN THE REPUBLIC OF of Kazakhstan. This will require the involvement of world’s leading energy companies and financial institutions KAZAKHSTAN as investors, as well as creating and maintaining incentives for competition in the electric power industry. 3.1 Target Model 3.2 Power Generation (Wholesale Market) 3.3 System Operator 3.4 Transmission and Distribution of Electricity 3.5 Power Supply 3.6 Creation of Power Market

BASIC QUESTIONNAIRE ON INDICATORS

22 TABLE OF CONTENT THE NEED FOR REHABILITATION AND CONSTRUCTION

Section 1. HISTORY AND CURRENT STATUS OF

ELECTRIC POWER INDUSTRY Due to the high projected energy consumption growth rates on the one hand, and the high degree of wear ҚАЗАҚША 1.1 Restructuring of existing generating assets on the other hand, sustainable economic development for the period until 2025 1.2 Generating Capacities requires: 1.3 Electric Grids 1.4 Electric Power Generation and Consumption Annual construction of new capacities up to 600 MW, or 9,000 MW over 15 years; 1.5 Tariff Policy

1.6 Sale of Electricity Replacement of the most of CHP plants as they are time-expired > 50 years, and annual rehabilitation of other РУССКИЙ 1.7 Electricity Market capacities on an average of 500 MW. Section 2. DEVELOPMENT OBJECTIVES In order to meet the electric power requirements of the national economy with 7% annual growth, including all 2.1 General Development Parameters, Goals and the projects implemented under the State Program of Accelerated Industrial and Innovative Development of the Objectives 2.2 The balance between demand and supply with the Republic of Kazakhstan for the period of 2010 to 2014, in the years to come, it is necessary to produce large-scale growing energy consumption rehabilitation (redeveloping and capital improvement) of existing and construction of new generating capacities ENGLISH 2.3 Development of Renewable Energy Sources and Their Integration into the National Grid Energy forecast until 2025 2.4 The Need to Attract the Large-Scale Investment for the Industry 2.5 Energy Saving and Energy Efficiency Improvement

BASIC QUESTIONNAIRE ON INDICATORS

23 TABLE OF CONTENT Amount of investments necessary in generation from 2010 – 2025

Section 1. HISTORY AND CURRENT STATUS OF

ELECTRIC POWER INDUSTRY ҚАЗАҚША 1.1 Restructuring 1.2 Generating Capacities 1.3 Electric Grids 1.4 Electric Power Generation and Consumption 1.5 Tariff Policy

1.6 Sale of Electricity РУССКИЙ 1.7 Electricity Market

Section 3. MAIN PRINCIPLES AND STRATEGIES • 75% of the investments for the CHP plants replacement and rehabilitation of other power plant units. FOR ELECTRIC POWER INDUSTRY DEVELOPMENT IN THE REPUBLIC OF KAZAKHSTAN 3.1 Target Model OBJECTIVES AND CHALLENGES OF ATTRACTING INVESTMENTS: 3.2 Power Generation (Wholesale Market) 3.3 System Operator Every year it is necessary to attract significant investments (200 – 300 bln. KZT per a year), what will inevitably 3.4 Transmission and Distribution of Electricity result in substantial rise in electricity price and tariff. 3.5 Power Supply 3.6 Creation of Power Market In this circumstances the following problems sould be solved:

Section 4. “TRANSPARENT TARIFF” CIVIL • creation of favourable investment environment in the electric power industry; INITIATIVE: CONTENT AND WAYS OF IMPLEMENTATION • attracting to the industry of an investment volume adequate for the demand in the electric power industry 4.1 Critical Analysis of Bureaucratic Tariff Policy development; 4.2 Tariff Process Transparency: Laws and Practice 4.3 Monitoring of Natural Monopolies: Regulatory • prevention of unreasonable rise in price and tariff for electricity – rise in price should be optimal and Framework and Practice regulated by the government; 4.4 General Critical Conclusion on Effective Procedure for Tariff Regulation • social protection of the disadvantaged population against jump in costs for electricity, which is an essential 4.5 Offers for a Transparent and Effective Tariff Process 4.6 Principles of Organization of Annual Professional commodity; and Independent Financial and Technical Audits 4.7 Transparent Tariff Initiative: Promotion of Common • involving of renewable energy sources taking into account the greenhouse gas emissions reduction Ideology and Civil Partnership Mechanisms into commitments National Laws and Practice 4.8. Organizational Sequence of Including the Consumer • (new version of the law of the RK “On the Government support of renewable energy sources”). into the Tariff Process

BASIC QUESTIONNAIRE ON INDICATORS

24 TABLE OF CONTENT General parameters for the development of electric power industry of Kazakhstan shall consider following:

Section 1. HISTORY AND CURRENT STATUS OF 1. Continuing trend of growth in electricity consumption.

ELECTRIC POWER INDUSTRY ҚАЗАҚША 1.1 Restructuring 2. Moderate growth of tariff (prices) for electricity. 1.2 Generating Capacities 3. Increasing in the share of electricity generation from alternative and renewable energy sources of up to 30% 1.3 Electric Grids 1.4 Electric Power Generation and Consumption by 2030 and up to 50 % by 2050, as part of Kazakhstan’s transition to a «green economy». 1.5 Tariff Policy 4. Reaching the targets to reduce energy intensity of Kazakhstan’s GDP for at least 10% by 2015 compared with

1.6 Sale of Electricity РУССКИЙ 1.7 Electricity Market 2008 and at least 25% by 2020 under the Strategic Development Plan of the Republic of Kazakhstan by 2020. 5. Saving the significant share of electricity generation from coal-fired power plants in the aggregate electricity Section 2. DEVELOPMENT OBJECTIVES generation. 2.1 General Development Parameters, Goals and Objectives 6. Reducing the negative impact from the electric power industry on the environment. 2.2 The balance between demand and supply with the growing energy consumption 7. Introducing advanced technologies to electric power industry. ENGLISH 2.3 Development of Renewable Energy Sources and Their Integration into the National Grid As a part of implementation of the Concept, four main targets should be reached: 2.4 The Need to Attract the Large-Scale Investment for the Industry 1. Significant decrease in the average deterioration of electric energy equipment in Kazakhstan by 2030. 2.5 Energy Saving and Energy Efficiency Improvement 2. Attracting investments to the electric power industry in the amount of 10.5 trillion tenge by 2030. Section 3. MAIN PRINCIPLES AND STRATEGIES FOR ELECTRIC POWER INDUSTRY 3. Providing a moderate growth in electricity tariffs for end-users until 2030. DEVELOPMENT IN THE REPUBLIC OF KAZAKHSTAN 4. Ensuring the independence and self-sufficiency of the UES of Kazakhstan by 2030. 3.1 Target Model In order to implement these objectives, following issues shall be resolved: 3.2 Power Generation (Wholesale Market) 3.3 System Operator 1. Implementation of a wholesale electricity market model and capacities creating incentives to improve the 3.4 Transmission and Distribution of Electricity efficiency of the generating equipment, providing an opportunity to obtain the desired return on investment 3.5 Power Supply and contributing to the qualitative and reliable energy supply (considering the requirements of environmental 3.6 Creation of Power Market improvement). Section 4. “TRANSPARENT TARIFF” CIVIL INITIATIVE: CONTENT AND WAYS OF 2. Introduction of a tariff setting method into the segments of transmission and distribution of electricity with IMPLEMENTATION the approval of long term tariff creating incentives for owners of power grid companies to improve the 4.1 Critical Analysis of Bureaucratic Tariff Policy efficiency that ensures obtaining the desired return on investment. 4.2 Tariff Process Transparency: Laws and Practice 4.3 Monitoring of Natural Monopolies: Regulatory 3. Implementation of long-term tariff setting system in the thermal energy production and transmission segment. Framework and Practice 4.4 General Critical Conclusion on Effective Procedure 4. Implementation of the sales allowance setting based on benchmarking in the electricity supply segment. for Tariff Regulation 4.5 Offers for a Transparent and Effective Tariff Process 5. Increasing the requirements for ESO data disclosure and the publication of this information on a single 4.6 Principles of Organization of Annual Professional information portal accessible to all users. and Independent Financial and Technical Audits 4.7 Transparent Tariff Initiative: Promotion of Common 6. Amendments to suboptimal governmental industry control procedures. Ideology and Civil Partnership Mechanisms into National Laws and Practice 7. Optimizing the structure of organizations in the segments of electricity distribution and supply by creating 4.8. Organizational Sequence of Including the Consumer incentives for consolidating the players. into the Tariff Process 8. Creating a new system of economic and legal relations between subjects of thermal energy production and

BASIC QUESTIONNAIRE ON INDICATORS transmission segment, contributing to the segment development. Achieving these goals and abovementioned objectives shall contribute to the implementation itsof the electric power industry’s mission to ensure energy safety and reliability of power supply. 25 TABLE OF CONTENT 2.2 The balance between demand and supply with the growing energy consumption.

Section 1. HISTORY AND CURRENT STATUS OF

ELECTRIC POWER INDUSTRY Electricity consumption forecast ҚАЗАҚША 1.1 Restructuring 1.2 Generating Capacities 1.3 Electric Grids 1.4 Electric Power Generation and Consumption 1.5 Tariff Policy

1.6 Sale of Electricity РУССКИЙ 1.7 Electricity Market

Section 3. MAIN PRINCIPLES AND STRATEGIES FOR ELECTRIC POWER INDUSTRY DEVELOPMENT IN THE REPUBLIC OF KAZAKHSTAN Forecasts of electricity consumption in Kazakhstan suppose maintaining the growth in electricity consumption 3.1 Target Model 3.2 Power Generation (Wholesale Market) due to the dynamic development of the economy. Thus, even considering the target indicators for reducing energy 3.3 System Operator intensity of GDP in Kazakhstan embedded in the Strategic Development Plan of Kazakhstan until 2020, the 3.4 Transmission and Distribution of Electricity electricity consumption by 2030 will be between 136 bln. kWh and 175 bln. kWh, depending on the forecast 3.5 Power Supply scenario. 3.6 Creation of Power Market Construction of new generating capacities partially solves the problem of growing electricity demand. Within Section 4. “TRANSPARENT TARIFF” CIVIL INITIATIVE: CONTENT AND WAYS OF the framework of the State Program for Forced Industrial and Innovative Development, a number of important IMPLEMENTATION projects have been completed concerning the construction and rehabilitation of power plants with an aggregate 4.1 Critical Analysis of Bureaucratic Tariff Policy capacity of 1,341 MW: 4.2 Tariff Process Transparency: Laws and Practice 4.3 Monitoring of Natural Monopolies: Regulatory Framework and Practice 4.4 General Critical Conclusion on Effective Procedure • Construction of Uralsk GTPP with a capacity of ; for Tariff Regulation 54 MW 4.5 Offers for a Transparent and Effective Tariff Process 4.6 Principles of Organization of Annual Professional and Independent Financial and Technical Audits • Extension of Atyrau TPP by ; 4.7 Transparent Tariff Initiative: Promotion of Common 75 MW Ideology and Civil Partnership Mechanisms into National Laws and Practice 4.8. Organizational Sequence of Including the Consumer into the Tariff Process • Construction of GTPP on the Akshabulak field with a capacity of 87 MW;

BASIC QUESTIONNAIRE ON INDICATORS • Construction of Moynaksk HPP with a capacity of 300 MW;

26 TABLE OF CONTENT • Reconstruction of generating unit No. 2 on the Aksus GRES with a capacity of ; Section 1. HISTORY AND CURRENT STATUS OF 325 MW

ELECTRIC POWER INDUSTRY ҚАЗАҚША 1.1 Restructuring 1.2 Generating Capacities • Reconstruction of generating unit No. 8 on the Ekibastuz GRES-1 with a capacity of 500 MW. 1.3 Electric Grids 1.4 Electric Power Generation and Consumption Also, within the framework of the State Program for Forced Industrial and Innovative Development, it is 1.5 Tariff Policy planned to introduce an additional 1,845 MW generating capacity by:

1.6 Sale of Electricity РУССКИЙ 1.7 Electricity Market

Section 2. DEVELOPMENT OBJECTIVES • Construction of Balkhash CHP with installed an capacity of 1,320 MW; 2.1 General Development Parameters, Goals and Objectives 2.2 The balance between demand and supply with the ENGLISH growing energy consumption • Construction of generating unit No.3 on the Ekibastuz GRES-2 with a capacity of . 2.3 Development of Renewable Energy Sources and 525 MW Their Integration into the National Grid In order to increase the available capacity of the existing HPP counter-regulators shall be constructed in Kazakhstan. 2.4 The Need to Attract the Large-Scale Investment for the Industry Considering the risk of lowering the water level in the trans-boundary Rivers between Kazakhstan and China, 2.5 Energy Saving and Energy Efficiency Improvement HPP’s should be considered as possible reservoirs too (to address the issue of water supply).

Section 3. MAIN PRINCIPLES AND STRATEGIES Strengthening the links between Northern, Southern and Western energy areas is required. FOR ELECTRIC POWER INDUSTRY DEVELOPMENT IN THE REPUBLIC OF To ensure the security of the national electric energy we need to strengthen the links between electricity generation KAZAKHSTAN 3.1 Target Model and consumption. In particular, the existing throughput capacity of two 500 kV «North-South»transmission lines 3.2 Power Generation (Wholesale Market) is not enough to cover peak loads in the Southern energy area due to the transfer of electricity from the Northern 3.3 System Operator area. It is necessary to increase the throughput capacity between Northern and Southern energy areas, as well as 3.4 Transmission and Distribution of Electricity to build a transmission line connecting the Western area of the unified national grid of the Republic of Kazakshtan. 3.5 Power Supply 3.6 Creation of Power Market It is extremely important to reduce the wear degree of generating equipment and increase the electric power reserve. Section 4. “TRANSPARENT TARIFF” CIVIL INITIATIVE: CONTENT AND WAYS OF IMPLEMENTATION Current level of power plant deterioration is about 70%. At the beginning of 2013, the average age of equipment 4.1 Critical Analysis of Bureaucratic Tariff Policy for thermal power plants was 28.8 years, hydroelectric power stations – 35.7 years. At the same time, 57% of the 4.2 Tariff Process Transparency: Laws and Practice power plant capacity has worked for over 30 years. 4.3 Monitoring of Natural Monopolies: Regulatory Framework and Practice Planned modernization of existing and construction of new power plants will improve the situation with the wear 4.4 General Critical Conclusion on Effective Procedure and non-optimal generating equipment load, resulting in their premature wear. for Tariff Regulation 4.5 Offers for a Transparent and Effective Tariff Process 4.6 Principles of Organization of Annual Professional and Independent Financial and Technical Audits 4.7 Transparent Tariff Initiative: Promotion of Common 2.3 Development of Renewable Energy Sources and Their Integration into the National Grid Ideology and Civil Partnership Mechanisms into National Laws and Practice Plans for the construction of generating capacities using alternative and renewable energy sources have an 4.8. Organizational Sequence of Including the Consumer into the Tariff Process impact on the development of thermal power plants’ capacities. Active development of renewable energy sources in the Republic of Kazakhstan has a number of prerequisites. BASIC QUESTIONNAIRE ON INDICATORS

27 TABLE OF CONTENT First is the need to improve the environmental situation and reduce the emissions of pollutants. Thus, the Republic of Kazakhstan is among the top three countries in terms of greenhouse gas emissions per unit of GDP. Following Section 1. HISTORY AND CURRENT STATUS OF

ELECTRIC POWER INDUSTRY are included in the share of electric power facilities: ҚАЗАҚША 1.1 Restructuring 1.2 Generating Capacities 1.3 Electric Grids • 1.4 Electric Power Generation and Consumption 43-45 % of the total emissions of air pollutants from stationary sources, a third of which are 1.5 Tariff Policy ash emissions. Emissions from TPP prevail:

1.6 Sale of Electricity РУССКИЙ 1.7 Electricity Market

Section 2. DEVELOPMENT OBJECTIVES • Up to 70 % (68-73 %) of the total greenhouse gas emissions; 2.1 General Development Parameters, Goals and Objectives 2.2 The balance between demand and supply with the growing energy consumption • 10 % of the annual volume of waste generation; ENGLISH 2.3 Development of Renewable Energy Sources and Their Integration into the National Grid 300 million tons of accumulated ash wastes (ASW), warehousing of which employs about 8.5 thousand hectares. 2.4 The Need to Attract the Large-Scale Investment for Industrial scale ASW processing is virtually absent. the Industry 2.5 Energy Saving and Energy Efficiency Improvement Compared with foreign countries, the efficiency of power plants is quite low. As an example we can cite the efficiency of coal condensing power plants in Kazakhstan is 32% on average, while in some foreign countries this Section 3. MAIN PRINCIPLES AND STRATEGIES FOR ELECTRIC POWER INDUSTRY value reaches 42%. DEVELOPMENT IN THE REPUBLIC OF KAZAKHSTAN Secondly, the adopted Concept of Kazakhstan’s transition to a «green economy» assumes 30% of electricity 3.1 Target Model generation by renewable and alternative energy sources by 2030 and 50% by 2050. 3.2 Power Generation (Wholesale Market) 3.3 System Operator Natural conditions in the Republic of Kazakhstan provide opportunities for the development of energy generation 3.4 Transmission and Distribution of Electricity using wind, solar, water and nuclear power. Hydropotential of medium and large rivers of Kazakhstan is 55 bln. 3.5 Power Supply 3.6 Creation of Power Market kWh, small rivers – 7.6 bln. kWh per year. Estimated solar energy potential is about 2.5 bln. kWh per year while estimated amount of sunny hours per year Section 4. “TRANSPARENT TARIFF” CIVIL INITIATIVE: CONTENT AND WAYS OF is 2,200 – 3,000 out of 8,760. Wind capacity reaches 1,820 bln. kWh per year. Thermal potential of geothermal IMPLEMENTATION waters is 4.3 GW, but their use is more appropriate for heating purposes only. 4.1 Critical Analysis of Bureaucratic Tariff Policy 4.2 Tariff Process Transparency: Laws and Practice Thus, the total potential of renewable energy for electric power generation is 1,885 bln. kWh, while thermal 4.3 Monitoring of Natural Monopolies: Regulatory Framework and Practice capacity is 4.3 GW. Wind based energy generation has the greatest potential. 4.4 General Critical Conclusion on Effective Procedure for Tariff Regulation Also the Republic of Kazakhstan has a significant potential for nuclear energy generation development. This is 4.5 Offers for a Transparent and Effective Tariff Process facilitated by the fact that Kazakhstan is the world’s leader in uranium production, which is about 20 thousand 4.6 Principles of Organization of Annual Professional tons per year. At the moment, there are also plans present to develop the production of nuclear fuel in Kazakhstan. and Independent Financial and Technical Audits 4.7 Transparent Tariff Initiative: Promotion of Common Construction of nuclear power plants in the Republic of Kazakhstan was planned long time ago, but the first active Ideology and Civil Partnership Mechanisms into National Laws and Practice steps in this direction were taken in 2012. Construction of nuclear power plants with total capacity of 900 MW is 4.8. Organizational Sequence of Including the Consumer included in the industry development plans by 2030. However, at the moment the Republic of Kazkahstan do not into the Tariff Process have the necessary technologies for construction, which will require the involvement of a foreign partner.

BASIC QUESTIONNAIRE ON INDICATORS As a result, the installed capacity of electricity generation plants using alternative and renewable energy sources will increase from 2.7 GW in 2012 up to 8 GW by 2030. In this case, the share of electricity generation from alternative and renewable energy sources will increase from 9% in 2012 up to 17% in 2030.

28 TABLE OF CONTENT At the moment, measures are taken to promote power generation by RES, including the formation of the legislative framework and adoption of an action plan for this segment’s development. Thus, in 2013, the Law «On amendments Section 1. HISTORY AND CURRENT STATUS OF

ELECTRIC POWER INDUSTRY and additions to some legislative acts of Kazakhstan in respect of supporting the renewable energy sources ҚАЗАҚША 1.1 Restructuring usage» and «Action Plan for the development of alternative and renewable energy in the Republic of Kazakhstan 1.2 Generating Capacities for 2013-2020» have been adopted. These documents will accelerate the development of renewable energy 1.3 Electric Grids 1.4 Electric Power Generation and Consumption segment by creating clear institutional and legal baselines of its function using best global practices. 1.5 Tariff Policy

1.6 Sale of Electricity РУССКИЙ 1.7 Electricity Market 2.4 The Need to Attract the Large-Scale Investment for the Industry Section 2. DEVELOPMENT OBJECTIVES 2.1 General Development Parameters, Goals and In order to achieve the key objectives of electric power industry, i.e. to provide reliable and qualitative power Objectives supply in accordance with international standards in a growing demand situation, plus the degree of high wear 2.2 The balance between demand and supply with the growing energy consumption of equipment and limited reserve capacities, significant amounts of capital investment is required, to exceed 10.1 ENGLISH 2.3 Development of Renewable Energy Sources and trillion KZT by 2030 (in 2011 prices). Their Integration into the National Grid 2.4 The Need to Attract the Large-Scale Investment for In particular, the construction and rehabilitation of power plants will require investments of 5.2 trillion KZT by the Industry 2.5 Energy Saving and Energy Efficiency Improvement 2030, including:

Section 3. MAIN PRINCIPLES AND STRATEGIES FOR ELECTRIC POWER INDUSTRY DEVELOPMENT IN THE REPUBLIC OF • coal-fired generation –3.4 trillion KZT; KAZAKHSTAN 3.1 Target Model • generation of electricity using alternative and renewable energy sources (excluding hydroelectric plants) 3.2 Power Generation (Wholesale Market) 3.3 System Operator 3.4 Transmission and Distribution of Electricity 1.3 trillion KZT; 3.5 Power Supply 3.6 Creation of Power Market

Section 4. “TRANSPARENT TARIFF” CIVIL • gas generation – 0.4 trillion KZT; INITIATIVE: CONTENT AND WAYS OF IMPLEMENTATION 4.1 Critical Analysis of Bureaucratic Tariff Policy 4.2 Tariff Process Transparency: Laws and Practice • hydroelectric generation – 0.2 trillion KZT. 4.3 Monitoring of Natural Monopolies: Regulatory Framework and Practice Attracting such an amount of investment requires organization of an effective electric power market, as well as 4.4 General Critical Conclusion on Effective Procedure improving the applicable methods of pricing and tariff regulation. for Tariff Regulation 4.5 Offers for a Transparent and Effective Tariff Process Given the constraints imposed on the tariff growth rate for end-users, the necessary amount of investment cannot 4.6 Principles of Organization of Annual Professional and Independent Financial and Technical Audits be fully financed from the funds existing in the tariff 4.7 Transparent Tariff Initiative: Promotion of Common Ideology and Civil Partnership Mechanisms into Considering the above restrictions imposed on the tariff growth rate, one of ways expected to finance the National Laws and Practice capital investment is attraction of private investments. At the moment, their amount is insufficient due to the 4.8. Organizational Sequence of Including the Consumer existence of four major problems in the industry: into the Tariff Process a) competitive pricing mechanisms and tariff setting methods to ensure a fair rate of return on capital, are BASIC QUESTIONNAIRE ON INDICATORS insufficient; b) legal framework does not provide a clear understanding the functioning of future industrial mechanisms;

29 TABLE OF CONTENT c) state administration is characterized by the moderate efficiency in stimulating the development of electric power industry , with opaque and cumbersome administrative procedures; Section 1. HISTORY AND CURRENT STATUS OF ELECTRIC POWER INDUSTRY d) lack of competition in the power generation market due to the high share of state ownership and the ҚАЗАҚША 1.1 Restructuring 1.2 Generating Capacities development initiatives of financial and industrial holdings having their own generating facilities. 1.3 Electric Grids 1.4 Electric Power Generation and Consumption 1.5 Tariff Policy

1.6 Sale of Electricity 2.5 Energy Saving and Energy Efficiency Improvement РУССКИЙ 1.7 Electricity Market Meeting the growing demand for electricity is possible not only from increased energy generation, but also by Section 2. DEVELOPMENT OBJECTIVES curbing the growth in electricity consumption. Surplus generating capacities, occurred in the early 90’s, reduced 2.1 General Development Parameters, Goals and Objectives the importance of energy efficiency and energy saving measures. However, increased energy consumption and 2.2 The balance between demand and supply with the rising prices caused the energy efficiency and saving measures to become relevant. Extremely low indicators ENGLISH growing energy consumption characterizing energy efficiency and energy savings make many projects and programs in this area economically 2.3 Development of Renewable Energy Sources and Their Integration into the National Grid justifiable. 2.4 The Need to Attract the Large-Scale Investment for the Industry One of the alternatives to meet the growing electricity demand in Kazakhstan is curbing the growth of its 2.5 Energy Saving and Energy Efficiency Improvement consumption. Extremely low indicators characterizing energy efficiency and savings confirm the economic feasibility of projects and programs in this area. Section 3. MAIN PRINCIPLES AND STRATEGIES FOR ELECTRIC POWER INDUSTRY DEVELOPMENT IN THE REPUBLIC OF High energy intensity of Kazakhstan’s GDP is caused by a number of objective reasons: KAZAKHSTAN • 3.1 Target Model Sharp cold of the continental climate, due to which Kazakhstan consumes 2.5 times more thermal energy 3.2 Power Generation (Wholesale Market) than the European average; 3.3 System Operator 3.4 Transmission and Distribution of Electricity • Territory – Kazakhstan has the 9th largest area in the world, with a population density 19 times less than 3.5 Power Supply in the EU. As a result, we lose 2 times more energy through the main transmission lines than in Europe; 3.6 Creation of Power Market • Significant share of energy-intensive sectors in the economy. Thus, 25% of Kazakhstan’s GDP is formed by Section 4. “TRANSPARENT TARIFF” CIVIL energy-intensive industries such as oil and gas, mining and metallurgy. 54% of electricity consumption in INITIATIVE: CONTENT AND WAYS OF IMPLEMENTATION Kazakhstan accounts for the industrial sector. 4.1 Critical Analysis of Bureaucratic Tariff Policy Nevertheless, the prospects of energy efficiency and energy saving in Kazakhstan are evidenced by the fact that 4.2 Tariff Process Transparency: Laws and Practice 4.3 Monitoring of Natural Monopolies: Regulatory the energy intensity of GDP is two times higher than in most developed countries, if compared with the cold Framework and Practice climate and/or wide area parameters of the Republic of Kazakhstan. 4.4 General Critical Conclusion on Effective Procedure for Tariff Regulation Thus, the cold climate and large area of the Republic of Kazakhstan are not insurmountable obstacles for significant 4.5 Offers for a Transparent and Effective Tariff Process reduction of the GDP’s energy intensity. Aggregate estimated potential of energy saving in Kazakhstan is 30 4.6 Principles of Organization of Annual Professional and Independent Financial and Technical Audits million tons of oil equivalent by 2030, with an energy consumption of 60 million tons of oil equivalent based on 4.7 Transparent Tariff Initiative: Promotion of Common the results of 2010. Ideology and Civil Partnership Mechanisms into National Laws and Practice Energy supply area has the greatest potential for energy saving, which accounts for about 50 % of the total energy 4.8. Organizational Sequence of Including the Consumer into the Tariff Process saving potential. Buildings account for 40%, industry – 7%, transport – 3%.

BASIC QUESTIONNAIRE ON INDICATORS

30 TABLE OF CONTENT Energy saving potential:

Section 1. HISTORY AND CURRENT STATUS OF

ELECTRIC POWER INDUSTRY ҚАЗАҚША 1.1 Restructuring 1.2 Generating Capacities 1.3 Electric Grids 1.4 Electric Power Generation and Consumption 1.5 Tariff Policy

1.6 Sale of Electricity РУССКИЙ 1.7 Electricity Market

Section 2. DEVELOPMENT OBJECTIVES 2.1 General Development Parameters, Goals and Objectives 2.2 The balance between demand and supply with the growing energy consumption ENGLISH 2.3 Development of Renewable Energy Sources and Their Integration into the National Grid 2.4 The Need to Attract the Large-Scale Investment for Capital investments for the full implementation of technical energy efficiency increase potential are about $3.3 the Industry billion. Estimated capital investments in generation of saved thermal and electric power are above $21 billion. 2.5 Energy Saving and Energy Efficiency Improvement Unit of energy obtained through the construction of new facilities requires 6-8 times more capital investments Section 3. MAIN PRINCIPLES AND STRATEGIES than if obtained through improving the energy efficiency. In many cases, increasing of energy efficiency does not FOR ELECTRIC POWER INDUSTRY DEVELOPMENT IN THE REPUBLIC OF require additional expenditures. KAZAKHSTAN 3.1 Target Model Purchase of electric power from inefficient consumers (using this power at peak load hours for lighting or electric 3.2 Power Generation (Wholesale Market) heating needs) costs only 20-60 USD/kW and the construction of new electric capacity in the best case will cost 3.3 System Operator of 1,000 – 2,500 USD/kW. 3.4 Transmission and Distribution of Electricity 3.5 Power Supply In fact, it could potentially be much more beneficial in the medium term for Kazakhstan to provide economic 3.6 Creation of Power Market growth almost without any increase in the power consumption. Section 4. “TRANSPARENT TARIFF” CIVIL In this case, the increase in energy efficiency depends on following: INITIATIVE: CONTENT AND WAYS OF IMPLEMENTATION • 80% – effectiveness of tariff policy, economic management and regulation. 4.1 Critical Analysis of Bureaucratic Tariff Policy 4.2 Tariff Process Transparency: Laws and Practice • 20% – technical solutions 4.3 Monitoring of Natural Monopolies: Regulatory Framework and Practice It is necessary to develop a Program for the implementation of Integrated Energy Supply Control System monitoring 4.4 General Critical Conclusion on Effective Procedure (IESCS-monitoring) contemplating the revision of existing standards and building codes regarding effective control for Tariff Regulation 4.5 Offers for a Transparent and Effective Tariff Process over energy savings and energy efficiency, economic incentives for energy and thermal savings. 4.6 Principles of Organization of Annual Professional and Independent Financial and Technical Audits Thus, saving of 1 ton of oil equivalent through increasing the energy efficiency in the industry requires 6-9 times 4.7 Transparent Tariff Initiative: Promotion of Common less investment than the fuel production build-up. Saving of 1 ton of oil equivalent in the industry saves another Ideology and Civil Partnership Mechanisms into National Laws and Practice 1 ton of oil equivalent throughout the economy and releases the oil and gas resources for export. 4.8. Organizational Sequence of Including the Consumer into the Tariff Process Approximately 20% of the energy saving potential can be achieved at costs of up to $20/ton of oil equivalent. Full implementation of energy-saving potential will require significant capital expenditure (up to 250 $/ton of oil BASIC QUESTIONNAIRE ON INDICATORS equivalent).

31 TABLE OF CONTENT Specific electricity consumption for the production of iron and steel Section 1. HISTORY AND CURRENT STATUS OF PRODUCT products (kWh/ton) ELECTRIC POWER INDUSTRY ҚАЗАҚША 1.1 Restructuring Kazakhstan Germany USA Great Britain 1.2 Generating Capacities Crude copper 1442 300 330 350 1.3 Electric Grids 1.4 Electric Power Generation and Consumption Rolled ferrous metal products 190 149 123 138 1.5 Tariff Policy Steel 650 152 1.6 Sale of Electricity РУССКИЙ 1.7 Electricity Market Aluminium 670 250 240 250 Section 2. DEVELOPMENT OBJECTIVES FER consumption, ton of oil equivalent/ton 2.1 General Development Parameters, Goals and PRODUCTION Objectives USA Kazakhstan 2.2 The balance between demand and supply with the growing energy consumption Copper ore mining 0,87 1,62 ENGLISH 2.3 Development of Renewable Energy Sources and Their Integration into the National Grid Lead and zinc ore mining 0,13 0,64 2.4 The Need to Attract the Large-Scale Investment for Open-pit coal mining 0,007 0,014 the Industry 2.5 Energy Saving and Energy Efficiency Improvement Standartized heat energy consumption, kWH/m2 a year Section 3. MAIN PRINCIPLES AND STRATEGIES FOR ELECTRIC POWER INDUSTRY Sweden – 82 kWh/m² DEVELOPMENT IN THE REPUBLIC OF KAZAKHSTAN 3.1 Target Model Germany – 120 kWh/m² 3.2 Power Generation (Wholesale Market) 3.3 System Operator France – 126 kWh/m² 3.4 Transmission and Distribution of Electricity 3.5 Power Supply Finland – 140 kWh/m² 3.6 Creation of Power Market England – 130 kWh/m² Section 4. “TRANSPARENT TARIFF” CIVIL INITIATIVE: CONTENT AND WAYS OF IMPLEMENTATION Russia – 210 kWh/m² 4.1 Critical Analysis of Bureaucratic Tariff Policy 4.2 Tariff Process Transparency: Laws and Practice Belarus – 220 kWh/m² 4.3 Monitoring of Natural Monopolies: Regulatory Framework and Practice Kazakhstan – 270 kWh/m² 4.4 General Critical Conclusion on Effective Procedure for Tariff Regulation Thus, the public policy in the area of energy savings, energy efficiency and reducing the environmental load must 4.5 Offers for a Transparent and Effective Tariff Process not only include prohibitive measures and penalties. First of all, sustainable economy development requires 4.6 Principles of Organization of Annual Professional and Independent Financial and Technical Audits application of incentive mechanisms. The main condition for the effective implementation of policy in the energy 4.7 Transparent Tariff Initiative: Promotion of Common sector is legislative support in the following matters: Ideology and Civil Partnership Mechanisms into National Laws and Practice • Formation of an adequate tariff setting system aimed at the energy efficiency improvement; 4.8. Organizational Sequence of Including the Consumer into the Tariff Process • Providing «long and cheap» funds to finance the activities related to the energy efficiency improvement (creating energy saving funds); BASIC QUESTIONNAIRE ON INDICATORS • Provision of organization and coordination of the subjects of energy efficiency improvement; • Establishing the transition periods, sufficient to adapt innovations by the energy sector subjects; 32 TABLE OF CONTENT • Development of the “Green Kazakhstan” ideology;

Section 1. HISTORY AND CURRENT STATUS OF • Promote and enhance the level of knowledge among the population;

ELECTRIC POWER INDUSTRY ҚАЗАҚША 1.1 Restructuring • Consulting. 1.2 Generating Capacities 1.3 Electric Grids Differences in climate – important reason of the GDP energy-intensity 1.4 Electric Power Generation and Consumption 1.5 Tariff Policy

1.6 Sale of Electricity РУССКИЙ 1.7 Electricity Market

BASIC QUESTIONNAIRE ON INDICATORS

33 TABLE OF CONTENT USA GDP Structure

Section 1. HISTORY AND CURRENT STATUS OF

ELECTRIC POWER INDUSTRY ҚАЗАҚША 1.1 Restructuring 1.2 Generating Capacities 1.3 Electric Grids 1.4 Electric Power Generation and Consumption 1.5 Tariff Policy

1.6 Sale of Electricity РУССКИЙ 1.7 Electricity Market

BASIC QUESTIONNAIRE ON INDICATORS

34 TABLE OF CONTENT And yet, despite the considerable energy savings potential, Kazakhstan economy cannot be competitive at energy prices when comparaed to prices in Western countries. Section 1. HISTORY AND CURRENT STATUS OF ELECTRIC POWER INDUSTRY In this regard, Kazakhstan needs to determine the maximum level of pricing for primary and derived energy ҚАЗАҚША 1.1 Restructuring 1.2 Generating Capacities resources, allowing the economy to remain competitive and avoid exceeding this level. 1.3 Electric Grids Currently, Kazakhstan began forming the State Energy Register (SER), which allows identification of main consumers 1.4 Electric Power Generation and Consumption 1.5 Tariff Policy of energy resources. According to the plans of MINT, the implementation of such monitoring would allow the state

1.6 Sale of Electricity to control the energy consumption and ultimately lead to a significant reduction in energy consumption. РУССКИЙ 1.7 Electricity Market Under the project, all SER subjects shall conduct energy audits, upon the results of which, action plans shall be Section 2. DEVELOPMENT OBJECTIVES developed and implemented to reduce energy consumption. SER subjects are individual entrepreneurs and legal 2.1 General Development Parameters, Goals and entities that consume energy resources in the range of 1,500 or more tons of oil equivalents per year, as well as Objectives 2.2 The balance between demand and supply with the government agencies and quasi-public sector entities. growing energy consumption ENGLISH 2.3 Development of Renewable Energy Sources and In the near future the Register will be available on the website of the SER operator JSC «Kazakhenergoekspertiza» Their Integration into the National Grid 2.4 The Need to Attract the Large-Scale Investment for and appear as www.kazee.kz the Industry 2.5 Energy Saving and Energy Efficiency Improvement

BASIC QUESTIONNAIRE ON INDICATORS

35 TABLE OF CONTENT Section 3. Section 1. HISTORY AND CURRENT STATUS OF

ELECTRIC POWER INDUSTRY ҚАЗАҚША 1.1 Restructuring MAIN PRINCIPLES AND STRATEGIES FOR ELECTRIC POWER INDUSTRY 1.2 Generating Capacities 1.3 Electric Grids DEVELOPMENT IN THE REPUBLIC OF KAZAKHSTAN 1.4 Electric Power Generation and Consumption 1.5 Tariff Policy

1.6 Sale of Electricity РУССКИЙ 1.7 Electricity Market 3.1 Target Model Section 2. DEVELOPMENT OBJECTIVES 2.1 General Development Parameters, Goals and Objectives Model of Electrical Power Market 2.2 The balance between demand and supply with the growing energy consumption ENGLISH 2.3 Development of Renewable Energy Sources and Their Integration into the National Grid 2.4 The Need to Attract the Large-Scale Investment for the Industry 2.5 Energy Saving and Energy Efficiency Improvement

BASIC QUESTIONNAIRE ON INDICATORS

36 TABLE OF CONTENT It is expected that enactment of a new law on the electrical power market will enable a transfer to the following model (by 2015): Section 1. HISTORY AND CURRENT STATUS OF

ELECTRIC POWER INDUSTRY ҚАЗАҚША 1.1 Restructuring 1.2 Generating Capacities 1.3 Electric Grids 1.4 Electric Power Generation and Consumption 1.5 Tariff Policy

1.6 Sale of Electricity РУССКИЙ 1.7 Electricity Market

Section 3. MAIN PRINCIPLES AND STRATEGIES FOR ELECTRIC POWER INDUSTRY DEVELOPMENT IN THE REPUBLIC OF KAZAKHSTAN 3.1 Target Model 3.2 Power Generation (Wholesale Market) 3.3 System Operator 3.4 Transmission and Distribution of Electricity 3.5 Power Supply 3.6 Creation of Power Market 3.2 Power Generation (Wholesale Market) Section 4. “TRANSPARENT TARIFF” CIVIL INITIATIVE: CONTENT AND WAYS OF In order to solve the problems of the power generation segment, a model of wholesale markets of power and IMPLEMENTATION capacity (target model) is supposed to be developed and implemented that will substitute the current mechanism 4.1 Critical Analysis of Bureaucratic Tariff Policy 4.2 Tariff Process Transparency: Laws and Practice of marginal rates. Functioning of electricity and power markets with competitive pricing is being considered 4.3 Monitoring of Natural Monopolies: Regulatory within the framework of the target model. Framework and Practice 4.4 General Critical Conclusion on Effective Procedure It is supposed that the transition to the target model will be carried out during a ten-year period starting on for Tariff Regulation January 1, 2016 and finish, approximately, on December 31, 2025. The transitional phase is supposed to render 4.5 Offers for a Transparent and Effective Tariff Process 4.6 Principles of Organization of Annual Professional operational the following submarkets: and Independent Financial and Technical Audits 4.7 Transparent Tariff Initiative: Promotion of Common • the market of centralized power trading: the yearly competitive selection of suppliers that provide consumers Ideology and Civil Partnership Mechanisms into with maintenance services on power capacity readiness; National Laws and Practice 4.8. Organizational Sequence of Including the Consumer • the market of centralized power trading is an exchange trading with execution of auctions in order to into the Tariff Process conclude short-term contracts (for each hour of the forthcoming twenty-four hours) and forward-looking contracts (for the next year, month and week); BASIC QUESTIONNAIRE ON INDICATORS • the balancing market: the real time exchange trading of differentials of power supply and actual volumes of power consumption from planned volumes (formed as a centralized trading market); 37 TABLE OF CONTENT • the decentralized trading market: conclusion of bilateral contracts on power purchase and sale between the generators and consumers. Section 1. HISTORY AND CURRENT STATUS OF ELECTRIC POWER INDUSTRY The following organizations are subjects of the wholesale market: ҚАЗАҚША 1.1 Restructuring 1.2 Generating Capacities • power producers – legal entities, whose power generation plants’ aggregate installed capacity is not less 1.3 Electric Grids than 1 MW; 1.4 Electric Power Generation and Consumption 1.5 Tariff Policy • the National Operator – a power generator responsible for export and import of electric power within the

1.6 Sale of Electricity РУССКИЙ 1.7 Electricity Market Republic of Kazakhstan’s power system; • wholesale purchasers – large industrial consumers and ESO’s; Section 2. DEVELOPMENT OBJECTIVES 2.1 General Development Parameters, Goals and • the system operator; Objectives 2.2 The balance between demand and supply with the • power grid companies; ENGLISH growing energy consumption 2.3 Development of Renewable Energy Sources and • the trading site and the Corporate Financial Centre. Their Integration into the National Grid 2.4 The Need to Attract the Large-Scale Investment for Trading in the centralized power market is carried out in accordance with the following rules: the Industry 2.5 Energy Saving and Energy Efficiency Improvement 1) Subjects of the wholesale market shall file prognostic applications for generation and consumption of power and electricity for the coming year divided into months and shall forward them to the system operator. Section 3. MAIN PRINCIPLES AND STRATEGIES FOR ELECTRIC POWER INDUSTRY DEVELOPMENT IN THE REPUBLIC OF 2) The system operator shall develop the anticipated balance of electric power and capacity for the coming year KAZAKHSTAN on the basis of the prognostic applications. 3.1 Target Model 3.2 Power Generation (Wholesale Market) 3) The market operator shall carry out the centralized competitive selection of suppliers’ price applications for 3.3 System Operator provision of a maintenance service for power capacity readiness. 3.4 Transmission and Distribution of Electricity 3.5 Power Supply 4) The system operator shall purchase maintenance services for power capacity readiness: 3.6 Creation of Power Market • on the basis of a contract on provision of the maintenance service of new power station’s capacity readiness; Section 4. “TRANSPARENT TARIFF” CIVIL INITIATIVE: CONTENT AND WAYS OF • on the basis of a contract on provision of the maintenance service for power capacity readiness, concluded IMPLEMENTATION in accordance with results of the centralized tender on power capacity. 4.1 Critical Analysis of Bureaucratic Tariff Policy 4.2 Tariff Process Transparency: Laws and Practice 5) The system operator shall provide services on assuring power capacity readiness to provide load for power 4.3 Monitoring of Natural Monopolies: Regulatory supply organizations, for power transmission organizations and for consumers that are subjects of the wholesale Framework and Practice 4.4 General Critical Conclusion on Effective Procedure market (except for their own electric power source consumers). for Tariff Regulation 4.5 Offers for a Transparent and Effective Tariff Process 6) The financial settlements are performed through the Corporate Financial Centre. 4.6 Principles of Organization of Annual Professional and Independent Financial and Technical Audits Energy-producing organizations independently set the price for the maintenance service for power capacity 4.7 Transparent Tariff Initiative: Promotion of Common readiness, but the price should be not higher than the marginal rate for the energy-producing organizations’ Ideology and Civil Partnership Mechanisms into National Laws and Practice corresponding group. 4.8. Organizational Sequence of Including the Consumer Stations receiving payment for provision of the maintenance service for power capacity readiness must sell non- into the Tariff Process contracted volumes in the centralized market of power. BASIC QUESTIONNAIRE ON INDICATORS The Corporate Financial Centre determines financial requirements and obligations of wholesale market participants in the markets of the centralized trading.

38 TABLE OF CONTENT In case of need, the State may smooth out the increase of wholesale prices for power and electricity by means of a subsidy. Section 1. HISTORY AND CURRENT STATUS OF ELECTRIC POWER INDUSTRY Availability of an hourly system of the Energy Resources Control and Recording Automated System (ERCRAC) ҚАЗАҚША 1.1 Restructuring 1.2 Generating Capacities should be a mandatory condition for power wholesale market participants’ operation in the market. At that, both 1.3 Electric Grids the normative requirements and economic incentives to implement the ERCRAC hourly system may be employed. 1.4 Electric Power Generation and Consumption For example, participants that create quality plans for the consumption and do not deviate from the planned 1.5 Tariff Policy schedule should not be subject to payment for balancing of the system.

1.6 Sale of Electricity РУССКИЙ 1.7 Electricity Market In order to ensure the balance of electric power that is necessary for the united energy system of the Republic of Kazakhstan, the system operator shall prepare a yearly long-term forecast for the power supply and demand and Section 2. DEVELOPMENT OBJECTIVES 2.1 General Development Parameters, Goals and shall determine the need for modernization and construction of power stations. In case of discovery of a necessity Objectives for additional capacity, the Government of the Republic of Kazakhstan shall conduct a tender for the construction 2.2 The balance between demand and supply with the growing energy consumption or modernization. ENGLISH 2.3 Development of Renewable Energy Sources and Their Integration into the National Grid In accordance with results of the tender, an authorized state institution and the winner of the tender shall conclude 2.4 The Need to Attract the Large-Scale Investment for a long-term contract on construction of the power station, and provisions of the contract shall specify the terms the Industry of commissioning and responsibility for failure to fulfil obligations as assumed by the winner of the tender. At 2.5 Energy Saving and Energy Efficiency Improvement the same time, the System Operator and the winner of the tender shall conclude a contract on the purchase of Section 3. MAIN PRINCIPLES AND STRATEGIES maintenance services for readiness of power capacity of the station in question at a price and time period set by FOR ELECTRIC POWER INDUSTRY the authorized state institution. DEVELOPMENT IN THE REPUBLIC OF KAZAKHSTAN In order to determine facilities, which are subject to the modernization, the authorized governmental institution 3.1 Target Model 3.2 Power Generation (Wholesale Market) and the system operator shall develop a program on the modernization of generating facilities in the Republic 3.3 System Operator of Kazakhstan. A long-term marginal rate for capacity and a marginal rate for power shall be determined for the 3.4 Transmission and Distribution of Electricity facilities that are subject to the modernization. 3.5 Power Supply 3.6 Creation of Power Market It is assumed a non-commercial organization called Market Council will be created, attached to the industry regulator, which shall be a site for consultations for subjects of the wholesale market and shall be responsible for Section 4. “TRANSPARENT TARIFF” CIVIL INITIATIVE: CONTENT AND WAYS OF development of the operating procedure of the power wholesale market. IMPLEMENTATION 4.1 Critical Analysis of Bureaucratic Tariff Policy Establishment of a National Operator for the power generation industry for the Republic of Kazakhstan under 4.2 Tariff Process Transparency: Laws and Practice the aegis of “Samruk-Energo” JSC during the transitional phase is done in order to implement the state policy 4.3 Monitoring of Natural Monopolies: Regulatory for the electricity sector; the National Operator will be carrying out the following functions: Framework and Practice 4.4 General Critical Conclusion on Effective Procedure • execution of construction of socially significant power facilities; for Tariff Regulation 4.5 Offers for a Transparent and Effective Tariff Process • execution of centralized activities on purchase and sale of exported and imported power; 4.6 Principles of Organization of Annual Professional and Independent Financial and Technical Audits • participation in construction of power facilities outside the Republic of Kazakhstan on the instructions of 4.7 Transparent Tariff Initiative: Promotion of Common Ideology and Civil Partnership Mechanisms into the Government of the Republic of Kazakhstan. National Laws and Practice 4.8. Organizational Sequence of Including the Consumer The submarket of bi-lateral contracts should stimulate development, escalation and competition of ESO. into the Tariff Process In the target model of market pricing, investments for the modernization and construction of the generating

BASIC QUESTIONNAIRE ON INDICATORS facilities should be attracted, owing to occurrence of price signals in the centralized market.

39 TABLE OF CONTENT 3.3 System Operator

Section 1. HISTORY AND CURRENT STATUS OF

ELECTRIC POWER INDUSTRY Efficient work of the system operator may be achieved by the provision of control to an authorized institution. ҚАЗАҚША 1.1 Restructuring Besides, separate accounting of activities of the system operator and activities of an operators of the main grids 1.2 Generating Capacities will prevent potential conflict of interests. 1.3 Electric Grids 1.4 Electric Power Generation and Consumption At that, availability of an independent process for approval of investment programs of all the power industry 1.5 Tariff Policy participants is required. These measures are needed for provision of optimal development of the power system in 1.6 Sale of Electricity the Republic of Kazakhstan. РУССКИЙ 1.7 Electricity Market

Section 2. DEVELOPMENT OBJECTIVES 2.1 General Development Parameters, Goals and Objectives 3.4 Transmission and Distribution of Electricity 2.2 The balance between demand and supply with the growing energy consumption In the segment of transmission and distribution of electric power, it is appropriate to implement a system of long- ENGLISH 2.3 Development of Renewable Energy Sources and Their Integration into the National Grid term rate regulation that will solve the main problems of the segment: lack of funds for the modernization and 2.4 The Need to Attract the Large-Scale Investment for construction of electric grid assets, absence of an acceptable profit on the invested capital and low management the Industry efficiency of electric grid companies. 2.5 Energy Saving and Energy Efficiency Improvement Solution to the problem for the lack of funds for modernization and construction of electric grid assets will be Section 3. MAIN PRINCIPLES AND STRATEGIES FOR ELECTRIC POWER INDUSTRY ensured by the rate including a fair value of amortization calculated on the basis of the fair value of fixed assets DEVELOPMENT IN THE REPUBLIC OF used for the provision of services on transmission and distribution of power. KAZAKHSTAN 3.1 Target Model The problem of the absence of an acceptable profit for electric grid companies’ invested capital will be solved by 3.2 Power Generation (Wholesale Market) the rate including a profit on the invested capital. At that, a higher rate of return used more for the new assets 3.3 System Operator 3.4 Transmission and Distribution of Electricity rather than for the old ones, will contribute to attraction of investments to the industry. 3.5 Power Supply In order to increase efficiency of activity of electric grid companies, it is appropriate to use a ratio of efficiency of 3.6 Creation of Power Market operating cost; the rate of which will characterise the yearly decrease in companies’ controlled cost. Section 4. “TRANSPARENT TARIFF” CIVIL INITIATIVE: CONTENT AND WAYS OF At the same time, if a company fails to reduce controlled cost at a faster rate than the value index, this effect IMPLEMENTATION should be retained in the company only for one business period. Therefore, cost savings achieved by the company 4.1 Critical Analysis of Bureaucratic Tariff Policy will influence the rate only for the next business period. 4.2 Tariff Process Transparency: Laws and Practice 4.3 Monitoring of Natural Monopolies: Regulatory A merger of REC’s will also promote the increase in efficiency of activity of REC’s. Resulting from the merger, Framework and Practice 4.4 General Critical Conclusion on Effective Procedure 3–5 comparable companies should be founded. These measures will allow decreasing unit costs of companies for Tariff Regulation in the electricity industry and, in consequence of it, decrease the rates for the services being rendered. The 4.5 Offers for a Transparent and Effective Tariff Process merger of REC’s may take place under the impact of different mechanisms, such as: 4.6 Principles of Organization of Annual Professional and Independent Financial and Technical Audits • introduction of tax incentives for the merged companies; 4.7 Transparent Tariff Initiative: Promotion of Common Ideology and Civil Partnership Mechanisms into • validation of a minimal number of consumers of the REC’s when licensing. National Laws and Practice 4.8. Organizational Sequence of Including the Consumer Besides, it is appropriate for the authorized institution to act for increasing control over the activity of REC into the Tariff Process through implementation of indexes of REC efficiency evaluation and realization of the investment program:

BASIC QUESTIONNAIRE ON INDICATORS • level of power losses in the grids; • value of depreciation of the electric grid assets;

40 TABLE OF CONTENT • value of operating cost per 100 km of the electric grids;

Section 1. HISTORY AND CURRENT STATUS OF • quantity of emergencies per 100 km of the electric grids;

ELECTRIC POWER INDUSTRY ҚАЗАҚША 1.1 Restructuring • Average System Interruption Duration Index (ASIDI); 1.2 Generating Capacities 1.3 Electric Grids • Average System Interruption Frequency Index (ASIFI). 1.4 Electric Power Generation and Consumption 1.5 Tariff Policy

1.6 Sale of Electricity РУССКИЙ 1.7 Electricity Market 3.5 Power Supply

Section 2. DEVELOPMENT OBJECTIVES In order to solve the structural problem of the power supply segment, related to the affiliation of ESO to REC and 2.1 General Development Parameters, Goals and Objectives to power generating organizations, three main mechanisms should be used: 2.2 The balance between demand and supply with the growing energy consumption 1. Calculate and approve a sales premium to ESO on the basis of a benchmarking principle representing ENGLISH 2.3 Development of Renewable Energy Sources and standardization of components of the sales premium based on the best industrial indexes. Their Integration into the National Grid 2.4 The Need to Attract the Large-Scale Investment for 2. Implement an obligation for ESO to disclose and publish detailed data on the formulation of electricity rates. the Industry 2.5 Energy Saving and Energy Efficiency Improvement 3. Toughen up sanctions against distribution companies for the establishment of unequal access to power grids.

Section 3. MAIN PRINCIPLES AND STRATEGIES In order to solve the problem of protracted consultation on ESO rates with ARNM, the notification principle of FOR ELECTRIC POWER INDUSTRY approval of ESO rates should be implemented; it will achieve the following results: DEVELOPMENT IN THE REPUBLIC OF KAZAKHSTAN 1. Simplification of the process of interaction between ESO and ARNM. 3.1 Target Model 3.2 Power Generation (Wholesale Market) 2. Decrease in ESO cost for raising borrowed funds that are necessary to cover cash gaps related to an incorrect 3.3 System Operator value in the rate. 3.4 Transmission and Distribution of Electricity 3.5 Power Supply In the long-term, strengthening ESO competition and consolidation of the industry players via toughened up 3.6 Creation of Power Market requirements from components of sales premiums formed using the benchmarking method should be achieved. Section 4. “TRANSPARENT TARIFF” CIVIL This measure will result in an exit from the market or in the purchase of inefficient ESO’s by stronger industry INITIATIVE: CONTENT AND WAYS OF players and in decrease the rates for the end-users. IMPLEMENTATION 4.1 Critical Analysis of Bureaucratic Tariff Policy 4.2 Tariff Process Transparency: Laws and Practice 4.3 Monitoring of Natural Monopolies: Regulatory Framework and Practice 3.6 Creation of Power Market 4.4 General Critical Conclusion on Effective Procedure for Tariff Regulation In accordance with plans of the Ministry of Industry and New Technologies and in order to provide additional 4.5 Offers for a Transparent and Effective Tariff Process power generation with new investments, a capacity market will be introduced as of 2016. In this market, 4.6 Principles of Organization of Annual Professional and Independent Financial and Technical Audits KEGOC will: 4.7 Transparent Tariff Initiative: Promotion of Common Ideology and Civil Partnership Mechanisms into • ensure readiness of power capacity to carry the load; National Laws and Practice 4.8. Organizational Sequence of Including the Consumer • carry out validation of capacity of the generating units; into the Tariff Process • purchase capacity from the validated power generators at published prices;

BASIC QUESTIONNAIRE ON INDICATORS • deliver power at the weighted average price to ESO and to large consumers.

41 TABLE OF CONTENT At that, the developers admit the following shortcomings of the power market:

Section 1. HISTORY AND CURRENT STATUS OF • It is advantageous for the investor to over-value false or actual cost, approved by the authorized institution, ELECTRIC POWER INDUSTRY for a guaranteed return. ҚАЗАҚША 1.1 Restructuring 1.2 Generating Capacities • All financial burden is imposed on the ultimate consumers. 1.3 Electric Grids 1.4 Electric Power Generation and Consumption • Volume of investments with guarantee of return is based only on the evaluation carried out by the state 1.5 Tariff Policy institutions and is not based on their actual economic efficiency.

1.6 Sale of Electricity РУССКИЙ 1.7 Electricity Market • The investments recoupment time (approved for 1 year) is not taken into account.

BASIC QUESTIONNAIRE ON INDICATORS

42 TABLE OF CONTENT Section 4. Section 1. HISTORY AND CURRENT STATUS OF

ELECTRIC POWER INDUSTRY ҚАЗАҚША 1.1 Restructuring “TRANSPARENT TARIFF” CIVIL INITIATIVE: 1.2 Generating Capacities 1.3 Electric Grids CONTENT AND WAYS OF IMPLEMENTATION 1.4 Electric Power Generation and Consumption 1.5 Tariff Policy

1.6 Sale of Electricity РУССКИЙ 1.7 Electricity Market 4.1 Critical Analysis of Bureaucratic Tariff Policy Section 2. DEVELOPMENT OBJECTIVES The increase in load along with the depreciation and loss of power put on the agenda a need for renovation costs, 2.1 General Development Parameters, Goals and Objectives modernization and production. The tariff structure as such has “swollen” and became more complicated. 2.2 The balance between demand and supply with the growing energy consumption Nevertheless, the tactics and strategy of tariff regulation are based on the attempts to reserve all regulatory ENGLISH 2.3 Development of Renewable Energy Sources and and control functions exclusively within the sector and the authorized government agencies, without the full Their Integration into the National Grid inclusion of the Consumers and independent Experts in the tariff process. Accordingly, the objective limitations 2.4 The Need to Attract the Large-Scale Investment for the Industry of state regulation by staff size and professionalism of the employees dictates more diverse, but less efficient 2.5 Energy Saving and Energy Efficiency Improvement ways of “office” tariff setting:

Section 3. MAIN PRINCIPLES AND STRATEGIES • Benchmarking is an attempt to group different SNM’s (Subjects of Natural Monopolies) fixing for them a FOR ELECTRIC POWER INDUSTRY general tariff determined by, roughly, best practices (REC’s (Regional Energy Commission), water pipelines); DEVELOPMENT IN THE REPUBLIC OF KAZAKHSTAN • Group tariffs are almost the same, in the way they appliance, roughly as a “universal” tariff to different 3.1 Target Model 3.2 Power Generation (Wholesale Market) SNM’s (power plants, city water and wastewater treatment plants); 3.3 System Operator • 3.4 Transmission and Distribution of Electricity “Notification” tariffs mean the transfer of small power SNM’s from a submission tariff to notification 3.5 Power Supply conditions of tariff increases; 3.6 Creation of Power Market • Marginal, calculated and individual tariffs mean tariff settings for seven and three years in advance, with Section 4. “TRANSPARENT TARIFF” CIVIL the deliberate inclusion into them of “investment” component exceeding operating costs (electrical power INITIATIVE: CONTENT AND WAYS OF engineering, with an attempt to spread to the other SNM’s); IMPLEMENTATION 4.1 Critical Analysis of Bureaucratic Tariff Policy • Differentiated tariffs mean increasing of tariffs for certain groups of consumers under the pretext of 4.2 Tariff Process Transparency: Laws and Practice 4.3 Monitoring of Natural Monopolies: Regulatory simulating consumer saving, but in fact – for raising the total tariff collection; Framework and Practice 4.4 General Critical Conclusion on Effective Procedure • Limitation of consumption using a higher tariffs in case of over-the-limit is also a way to collect more; for Tariff Regulation • 4.5 Offers for a Transparent and Effective Tariff Process Two- and three-rate tariffs are down with a view to smooth consumption, but they also allow increasing 4.6 Principles of Organization of Annual Professional actual payments; and Independent Financial and Technical Audits 4.7 Transparent Tariff Initiative: Promotion of Common • Recalculated” tariff is a tariff increasing exceptionally due to the change of depreciation rates rooted in Ideology and Civil Partnership Mechanisms into the methodology, profits and wage standards (the program of increases of the tariffs of water supply and National Laws and Practice 4.8. Organizational Sequence of Including the Consumer sewage enterprises from 50 to 400 % by 2015); into the Tariff Process

BASIC QUESTIONNAIRE ON INDICATORS

43 TABLE OF CONTENT 4.2 Tariff Process Transparency: Laws and Practice

Section 1. HISTORY AND CURRENT STATUS OF

ELECTRIC POWER INDUSTRY Under the Law, a subject of natural monopoly is obliged to: ҚАЗАҚША 1.1 Restructuring • Provide a mandatory annual audit by an audit organization. Audit report and annual financial statements 1.2 Generating Capacities 1.3 Electric Grids shall be published in periodic printed publications; 1.4 Electric Power Generation and Consumption • Report annually to consumers and other stakeholders; 1.5 Tariff Policy

1.6 Sale of Electricity • Report annually on the implementation of the estimated rates. It also needs to be mentioned that it is РУССКИЙ 1.7 Electricity Market prohibited to acknowledge the information contained in the estimated rates and the information on the Section 2. DEVELOPMENT OBJECTIVES provided regulated utility services as commercially secret information; 2.1 General Development Parameters, Goals and Objectives • Following the publication of information on the date of the public hearing, submit at the request of the 2.2 The balance between demand and supply with the participants of the public hearings the drafts of the tariff estimates, information on the causes of increased ENGLISH growing energy consumption rates with economically justified calculations. 2.3 Development of Renewable Energy Sources and Their Integration into the National Grid Authorized agency is obliged to: 2.4 The Need to Attract the Large-Scale Investment for the Industry • Familiarize consumers with decisions adopted on the issues of regulating the activities of subjects of 2.5 Energy Saving and Energy Efficiency Improvement natural monopolies; Section 3. MAIN PRINCIPLES AND STRATEGIES FOR ELECTRIC POWER INDUSTRY • In case of acceptance for consideration the applications on the change of existing tariffs, inspect the drafts DEVELOPMENT IN THE REPUBLIC OF of tariffs and tariff estimates. During the inspection performance by independent experts, government KAZAKHSTAN 3.1 Target Model agencies, consumers and their public associations, subjects of natural monopolies, presented a project, are 3.2 Power Generation (Wholesale Market) involved; 3.3 System Operator 3.4 Transmission and Distribution of Electricity • Conduct public hearings when considering applications for approval of tariffs, post the information about 3.5 Power Supply the date and place of the public hearing performance on its Internet site and publish it in periodic printed 3.6 Creation of Power Market publications: Section 4. “TRANSPARENT TARIFF” CIVIL Subjects of the regulated market are obliged to submit to the authorized agency the information about the INITIATIVE: CONTENT AND WAYS OF IMPLEMENTATION transfer prices, enclosing the supporting materials, the quarterly financial statements and monthly information 4.1 Critical Analysis of Bureaucratic Tariff Policy on the production output, profitability level and transfer prices. 4.2 Tariff Process Transparency: Laws and Practice 4.3 Monitoring of Natural Monopolies: Regulatory Consumers have the right to submit their applications to the authorized agency and the courts, to participate in Framework and Practice public hearings and opening of tenders on the procurements of services by a subject of natural monopoly. 4.4 General Critical Conclusion on Effective Procedure for Tariff Regulation The situation in reality is as follows: 4.5 Offers for a Transparent and Effective Tariff Process 4.6 Principles of Organization of Annual Professional • A huge number of tariff calculate ions and its annexes only make the procedure for the tariff application and Independent Financial and Technical Audits bureaucratically more complicated. In fact, the process of tariff increases has a political and “disincentive” 4.7 Transparent Tariff Initiative: Promotion of Common Ideology and Civil Partnership Mechanisms into character – the authorized agency tries to delay the adoption of the next tariff applications, as well as to National Laws and Practice restrain the announced increases in the limits of the planned inflation. In recent years, these bureaucratic 4.8. Organizational Sequence of Including the Consumer into the Tariff Process “brakes” were worthless – the tariff increase not only outpaced actual inflation, but it is also its multiplier; • Public hearings before the expected increase are not always held, but they always remained a formality. BASIC QUESTIONNAIRE ON INDICATORS The participants are not supplied with materials in advance. They do not have objective information and can’t influence on the pre-planned result of “hearings”;

44 TABLE OF CONTENT • Tariff estimate approved “in advance” do not meet the results of the actual activities of the enterprises. In particular, ARNM (Agency on Regulation of Natural Monopolies) does not even make episodic attempts Section 1. HISTORY AND CURRENT STATUS OF

ELECTRIC POWER INDUSTRY to verify the articles of approved tariff estimate compared to reported data. In addition, the reporting ҚАЗАҚША 1.1 Restructuring statements of the enterprises are confidential and intradepartmental. The materials are not available 1.2 Generating Capacities for “outsiders”. The attempts to inquire on this matter were in vain. Only standard statistical reporting 1.3 Electric Grids 1.4 Electric Power Generation and Consumption materials are relatively available, but they only give a little information; 1.5 Tariff Policy • The audit required by the Law is performed only with respect to the financial statements, where everything

1.6 Sale of Electricity РУССКИЙ 1.7 Electricity Market is just correct. Moreover, the audit is guided by the standards relating to public companies listed on the stock market, which has very little connection to the activities of inspected enterprises; Section 2. DEVELOPMENT OBJECTIVES 2.1 General Development Parameters, Goals and • The funds for inspections and investigations are included in ARNM’s budget, and the same costs are Objectives included in the tariff estimates. In fact, these funds are “used” by the affiliated performers. As a result, the 2.2 The balance between demand and supply with the growing energy consumption outcome of these “inspections” are the justifications for the increased costs and losses. In fact, taxpayers ENGLISH 2.3 Development of Renewable Energy Sources and and consumers pay extra to monopolists for their own “verifications.” Their Integration into the National Grid 2.4 The Need to Attract the Large-Scale Investment for the Industry 2.5 Energy Saving and Energy Efficiency Improvement 4.3 Monitoring of Natural Monopolies: Regulatory Framework and Practice Section 3. MAIN PRINCIPLES AND STRATEGIES FOR ELECTRIC POWER INDUSTRY The Act “On Natural Monopolies and Regulated Markets” obliges the subjects of natural monopoly to conduct DEVELOPMENT IN THE REPUBLIC OF a mandatory annual audit by audit organizations without detailed regulation of the order and content of this KAZAKHSTAN 3.1 Target Model process; 3.2 Power Generation (Wholesale Market) The specific procedures are described in the Rules for the Execution of the Financial and (or) Technical 3.3 System Operator 3.4 Transmission and Distribution of Electricity Inspection of SNM’s of ARNM. Thus “Rules…” essentially “correct” for the Law: 3.5 Power Supply 3.6 Creation of Power Market • Financial and (or) technical inspections of SNMs’ activities are conducted by the authorized agency with the assistance of independent experts specified for this and, if it is necessary, with government agencies, Section 4. “TRANSPARENT TARIFF” CIVIL with a frequency of at least once every two years for financial inspection, and once every three years for INITIATIVE: CONTENT AND WAYS OF IMPLEMENTATION technical inspection; 4.1 Critical Analysis of Bureaucratic Tariff Policy • 4.2 Tariff Process Transparency: Laws and Practice Technical inspection is an analysis of technical state of committed assets and the need for maintaining 4.3 Monitoring of Natural Monopolies: Regulatory these assets in an operating condition, the efficiency of the operating process, including the compliance Framework and Practice with the established standards for materials and labor costs, the production technology, the assessment 4.4 General Critical Conclusion on Effective Procedure for Tariff Regulation of the need for the implementation of investment programs and (or) investment projects, the level of 4.5 Offers for a Transparent and Effective Tariff Process involvement and the proper distribution of capital assets by the types of the provided regulated services 4.6 Principles of Organization of Annual Professional (goods, works); and Independent Financial and Technical Audits 4.7 Transparent Tariff Initiative: Promotion of Common • Financial inspection is an analysis of financial and business activity of SNM for the purpose ofthe Ideology and Civil Partnership Mechanisms into National Laws and Practice implementation of the Law and the decisions of the Authorized Agency, the distribution of income, 4.8. Organizational Sequence of Including the Consumer expenses and committed assets by each type of the regulated services (goods, works) and, in whole, by into the Tariff Process other activities in accordance with the procedure, approved by the Authorized Agency, as well as the influence of applied tariffs (prices, rates) on financial indicators on the activity of the subject of natural BASIC QUESTIONNAIRE ON INDICATORS monopoly, the verification (assessment) of the execution of the tariff estimation and the compliance with accounting policy, the execution of investment programs and (or) investment projects;

45 TABLE OF CONTENT • An agreement on state procurements, where the subject, object and conditions for the inspection execution are specified, shall be concluded between the Authorized Agency and the expert, who is conducting the Section 1. HISTORY AND CURRENT STATUS OF

ELECTRIC POWER INDUSTRY inspection; ҚАЗАҚША 1.1 Restructuring 1.2 Generating Capacities • According to the results of the inspection, the expert shall submit to the Authorized Agency the milestone 1.3 Electric Grids and final reports containing the objective, motivations,and a scientifically based conclusion on the object 1.4 Electric Power Generation and Consumption of the inspection within the specified time; 1.5 Tariff Policy

1.6 Sale of Electricity • The Authorized Agency shall consider the reports submitted by an expert within 30 days. РУССКИЙ 1.7 Electricity Market However, the legal consequences of the execution of the mandatory annual audits are not specified in terms of Section 2. DEVELOPMENT OBJECTIVES adjustment or new tariff assignment in the normative framework. Practical consequences are also not perceived 2.1 General Development Parameters, Goals and (except for the actual tariff appreciation). Objectives 2.2 The balance between demand and supply with the

The reasons are as follows: ENGLISH growing energy consumption 2.3 Development of Renewable Energy Sources and • According to the Law, the mandatory annual audit shall be conducted namely by audit organizations, in Their Integration into the National Grid 2.4 The Need to Attract the Large-Scale Investment for other words, those covering only accounting and financial statements, which are usually acceptable. In the Industry addition, the methodology of financial audits is directed for the activities of public companies listed on 2.5 Energy Saving and Energy Efficiency Improvement the stock markets that hardly meets the specific nature of SNM. As a result, expensive (often conducted by Section 3. MAIN PRINCIPLES AND STRATEGIES one of the Big Three companies) financial audits are just added to the cost of the tariff; FOR ELECTRIC POWER INDUSTRY DEVELOPMENT IN THE REPUBLIC OF • According to the law the monopolist shall execute the audit, whereas the Authorized Agency by its own KAZAKHSTAN subordinate act “takes” this duty upon itself. As a result, the issue on determination of the Provider of 3.1 Target Model 3.2 Power Generation (Wholesale Market) inspection of SNM’s activities, the method and sources of funding are often “suspended.” The regularity 3.3 System Operator and completeness of technical audits are affected by this quite a lot. And factually they remain the most 3.4 Transmission and Distribution of Electricity important points; 3.5 Power Supply 3.6 Creation of Power Market • electing the inspection agency within the “free” market profanes professionalism and independence of the organization providing inspection. Typically, they are small LLP’s (Limited Liability Partnerships) affiliated Section 4. “TRANSPARENT TARIFF” CIVIL INITIATIVE: CONTENT AND WAYS OF with the “inspected” SNM. The affiliation with officials of the authorized agency is also not excluded. IMPLEMENTATION As a result, although such “inspections” have formalistic nature, oblige nobody to nothing and, in fact, 4.1 Critical Analysis of Bureaucratic Tariff Policy create elementary “use” of the funds allocated for them. But the conclusions and recommendations of the 4.2 Tariff Process Transparency: Laws and Practice 4.3 Monitoring of Natural Monopolies: Regulatory “inspections” are directed for justification of increased costs and excessive losses of “inspected” SNM; Framework and Practice 4.4 General Critical Conclusion on Effective Procedure • In addition, the Rules for the Execution of Financial and (or) Technical Inspection of SNM approved by for Tariff Regulation ARNM suffer from excessive requirements. The scope of financial and, especially, technical inspections are 4.5 Offers for a Transparent and Effective Tariff Process described so that complying with all the points requires a long-term work by a large group of different 4.6 Principles of Organization of Annual Professional and Independent Financial and Technical Audits field experts with corresponding costs. In fact, the Rules are a version of the Italian Strike and to fulfill all 4.7 Transparent Tariff Initiative: Promotion of Common the requirements are definitely impossible, which causes the superficial and formalistic “inspection.” Ideology and Civil Partnership Mechanisms into National Laws and Practice 4.8. Organizational Sequence of Including the Consumer into the Tariff Process 4.4 General Critical Conclusion on Effective Procedure for Tariff Regulation BASIC QUESTIONNAIRE ON INDICATORS In general, the tariff process is carried out only through the “paired” interaction of SNM with the Authorized Agency. Systematic participation of the organized Consumer in the tariff process is not prescribed in legislation

46 TABLE OF CONTENT at all, individual innovations are nonbinding and formalistic. Thus, the participation of some random “consumers” in public hearings does not affect ready-made decision by the “SNM – AA” pair. Provided that, the absence of any Section 1. HISTORY AND CURRENT STATUS OF

ELECTRIC POWER INDUSTRY consumers at such hearings only make the process of tariff increases easier and swifter. ҚАЗАҚША 1.1 Restructuring 1.2 Generating Capacities Paired interaction of monopolistic enterprises only with tariff regulation agencies, without the actual participation 1.3 Electric Grids of the Consumer, has developed during recession of the 90’s, when due to the drop in load there were only 1.4 Electric Power Generation and Consumption operating questions for only those with high capacity, and such was functioning rather well in those years. The 1.5 Tariff Policy increase of consumer loads along with depreciation and capacity disposal has led to the need for increasing and

1.6 Sale of Electricity РУССКИЙ 1.7 Electricity Market complicating the tariff structure. It had to include all the high cost for renovation, modernization and capacity expansion. Section 2. DEVELOPMENT OBJECTIVES 2.1 General Development Parameters, Goals and Another “feature” of the tariff process, developed in the same crisis years, was the approval of the tariff “in advance”, Objectives according to the supposed costs of SNM for the ensuing year. Regarding that, the actual execution of tariff estimate 2.2 The balance between demand and supply with the growing energy consumption =was not checked at all, or checked in a formalistic way. However, ideally the SNM was interested in demonstrating ENGLISH 2.3 Development of Renewable Energy Sources and the full “use” of the tariff revenue and the excess of expenses over income to justify the next tariff application. Their Integration into the National Grid 2.4 The Need to Attract the Large-Scale Investment for “Swelling” of the tariff structure makes the problem of permanent and the independent and professional control the Industry over the effectiveness of the actual spending of funds more pressing. If previously it was only connected to the 2.5 Energy Saving and Energy Efficiency Improvement operation, later the question of the effectiveness of the investment activity of SNM has arisen with the introduction Section 3. MAIN PRINCIPLES AND STRATEGIES of “investment” (marginal, calculated, individual) tariffs. FOR ELECTRIC POWER INDUSTRY DEVELOPMENT IN THE REPUBLIC OF The principle, that the right and duty to control the activities of SNM is reserved for the Authorized Agency, KAZAKHSTAN objectively is not observed: ARNM and its Departments by either size of staff or professional qualifications are not 3.1 Target Model 3.2 Power Generation (Wholesale Market) able to carry out inspections of proper frequency and depth. 3.3 System Operator 3.4 Transmission and Distribution of Electricity It is time for inclusion of a fully legitimate third party – the Consumer – in the tariff process, and with its participation 3.5 Power Supply to change to the assignment of tariff according to the audit results of the actual activity of SNM. 3.6 Creation of Power Market

Section 4. “TRANSPARENT TARIFF” CIVIL INITIATIVE: CONTENT AND WAYS OF 4.5 Offers for a Transparent and Effective Tariff Process IMPLEMENTATION 4.1 Critical Analysis of Bureaucratic Tariff Policy • 4.2 Tariff Process Transparency: Laws and Practice The tariff is approved on the results of the actual activity of the power plant, the grid company, the total amount 4.3 Monitoring of Natural Monopolies: Regulatory of necessary and sufficient costs for the qualitative offer to the consumers and the planned development. Framework and Practice These results are determined on the basis of detailed and publicly available reported statements of the 4.4 General Critical Conclusion on Effective Procedure for Tariff Regulation enterprise, which has passed independent technical, technological, economic and financial audits; 4.5 Offers for a Transparent and Effective Tariff Process • Whereas the technical and economic standards are fixed for the subject of natural monopoly, which 4.6 Principles of Organization of Annual Professional and Independent Financial and Technical Audits stimulate it to reduce costs and increase the reliability of its supply to the consumers; 4.7 Transparent Tariff Initiative: Promotion of Common Ideology and Civil Partnership Mechanisms into • The tariff is proposed to be divided into two parts – the subscriber part determined by connected (contract) National Laws and Practice load, and the current part determined by the volume of consumption. 4.8. Organizational Sequence of Including the Consumer into the Tariff Process • The aimless “profit” built into the tariff shall be deleted. All the lines of the tariff estimate shall have a specific purpose. Instead of a “profit” it is necessary to stimulate the SNM’s management and staff, which BASIC QUESTIONNAIRE ON INDICATORS results in the reduction of admissible accident rate, the compliance with or improvement of the technical, technological, financial and economic standards built into the tariff estimate;

47 TABLE OF CONTENT • The costs for capacity expansion are not included into the tariff for existing consumers. The tariff containing investment surcharge shall be applied only to the newly connected consumers or the consumers desiring Section 1. HISTORY AND CURRENT STATUS OF

ELECTRIC POWER INDUSTRY to increase the load, as well as to the consumers that willfully express their investment intentions. In ҚАЗАҚША 1.1 Restructuring all cases, the application of the investment tariff shall be associated with pre-determined benefits for 1.2 Generating Capacities the consumer-investor – the participation in expandable assets, the subsequent tariff discounts or other 1.3 Electric Grids 1.4 Electric Power Generation and Consumption preferences; 1.5 Tariff Policy • The adoption of tariff has an adversary nature – the Applicant justifies its costs, the organized Consumer

1.6 Sale of Electricity РУССКИЙ 1.7 Electricity Market produces its reasons at mandatory public hearings. Provided that, both sides rely on data from audited statements and actual execution of standards; Section 2. DEVELOPMENT OBJECTIVES 2.1 General Development Parameters, Goals and The authorized state agency is present at the tariff process as: Objectives 2.2 The balance between demand and supply with the • A guarantor of the complete and accessible reporting statements by the subjects of natural monopoly; growing energy consumption ENGLISH 2.3 Development of Renewable Energy Sources and • An organizer and guarantor of the professional and objective audition; Their Integration into the National Grid 2.4 The Need to Attract the Large-Scale Investment for • An organizer and moderator at public hearings; the Industry 2.5 Energy Saving and Energy Efficiency Improvement • An agency approving the standards for subjects of natural monopoly, the reporting forms, and, according to the results of public hearings, the tariffs; Section 3. MAIN PRINCIPLES AND STRATEGIES FOR ELECTRIC POWER INDUSTRY The Organized Consumer shall participate in the tariff process as a Party having the right to: DEVELOPMENT IN THE REPUBLIC OF KAZAKHSTAN • Access to the reporting statements by the subject of natural monopoly; 3.1 Target Model 3.2 Power Generation (Wholesale Market) • Participate in the audition and conclusion generation; 3.3 System Operator 3.4 Transmission and Distribution of Electricity • Participate in the tender committees on procurements by the subjects of natural monopoly; 3.5 Power Supply 3.6 Creation of Power Market • Participate in public hearings, drawing up and signing of the final minutes of them; • Obtain the state order for its participation in the tariff process. Section 4. “TRANSPARENT TARIFF” CIVIL INITIATIVE: CONTENT AND WAYS OF IMPLEMENTATION 4.1 Critical Analysis of Bureaucratic Tariff Policy 4.2 Tariff Process Transparency: Laws and Practice 4.6 Principles of Organization of Annual Professional and Independent Financial and 4.3 Monitoring of Natural Monopolies: Regulatory Framework and Practice Technical Audits 4.4 General Critical Conclusion on Effective Procedure for Tariff Regulation • The purchase of services for the performance of annual financial and technical audits are carried out 4.5 Offers for a Transparent and Effective Tariff Process using the “single source” method – through getting a permanent state order for the audition of all the 4.6 Principles of Organization of Annual Professional and Independent Financial and Technical Audits SNM’s operating in one city, region or country by the relevant specialized city, regional or republican audit 4.7 Transparent Tariff Initiative: Promotion of Common (further SAE) enterprise; Ideology and Civil Partnership Mechanisms into National Laws and Practice • The annual audit shall be comprehensive, covering financial, economic, technical and technological aspects 4.8. Organizational Sequence of Including the Consumer into the Tariff Process of the activity of SNM. Its scope is defined and limited to the major cost items of the tariff estimates; • The payment for the annual audit shall be made by each SNM within the limits of its tariff estimates, to BASIC QUESTIONNAIRE ON INDICATORS the extent as approved by the Authorized Agency;

48 TABLE OF CONTENT • SAE shall be created as a unitary public utility (municipal and regional) and national enterprise. In the pilot version, a co-founder and organizer of the start-up of city, regional and national SAE can be, for example, Section 1. HISTORY AND CURRENT STATUS OF

ELECTRIC POWER INDUSTRY the National Chamber of Entrepreneurs; ҚАЗАҚША 1.1 Restructuring 1.2 Generating Capacities • As for organization structure, SAE is a “management company” responsible for engaging the most professional 1.3 Electric Grids and independent experts or specialized organizations into the audit performance. SAE’s personnel consists 1.4 Electric Power Generation and Consumption of only minimally required number of technical workers engaged in planning and organizing the annual 1.5 Tariff Policy audits of all the SNM’s in this city, region, nation. The inclusion of the experts in SAE’s personnel is carried

1.6 Sale of Electricity РУССКИЙ 1.7 Electricity Market out on a competitive basis. The contracts are signed with individuals and legal entities on the subject of the execution of separate, scheduled inspections. In case of positive results, they are conducted on a long Section 2. DEVELOPMENT OBJECTIVES term basis. 2.1 General Development Parameters, Goals and Objectives 2.2 The balance between demand and supply with the growing energy consumption ENGLISH 2.3 Development of Renewable Energy Sources and 4.7 Transparent Tariff Initiative: Promotion of Common Ideology and Civil Partnership Their Integration into the National Grid 2.4 The Need to Attract the Large-Scale Investment for Mechanisms into National Laws and Practice the Industry 2.5 Energy Saving and Energy Efficiency Improvement Currently, there is no equality of rights in the cooperation of “third sector” with the government and business:

Section 3. MAIN PRINCIPLES AND STRATEGIES “The First Sector” – Government: FOR ELECTRIC POWER INDUSTRY DEVELOPMENT IN THE REPUBLIC OF • It is well-organized and structured. Government authorities are present through the central, regional and KAZAKHSTAN local authorities. They are specialized in functions and branch activities; 3.1 Target Model 3.2 Power Generation (Wholesale Market) • Any government authority has legal competence, instruments and mechanisms to ensure itself in its 3.3 System Operator practice; 3.4 Transmission and Distribution of Electricity 3.5 Power Supply • Even a single individual representing any government authority has all the organizational and governmental 3.6 Creation of Power Market strength of the “first sector.” Section 4. “TRANSPARENT TARIFF” CIVIL “The Second Sector” – Business: INITIATIVE: CONTENT AND WAYS OF IMPLEMENTATION • Internally this sector is sufficiently organized. So, enterprises, the subjects of natural monopoly, have 4.1 Critical Analysis of Bureaucratic Tariff Policy 4.2 Tariff Process Transparency: Laws and Practice competence and scope of activities set forth in the Law, and have the executive office to represent and 4.3 Monitoring of Natural Monopolies: Regulatory defend their interests vis-a-vis consumers; Framework and Practice 4.4 General Critical Conclusion on Effective Procedure • It is relatively organized for collective representation of its interests in the “first sector”. However, this for Tariff Regulation organization being not enough, “the second sector” appears before the “first” sector as an intercessor, 4.5 Offers for a Transparent and Effective Tariff Process 4.6 Principles of Organization of Annual Professional petitioner. The current Law does not ensure it the status of an equal partner; and Independent Financial and Technical Audits • 4.7 Transparent Tariff Initiative: Promotion of Common It is weakly organized to interact with other business entities. So, if large and influential enterprises are Ideology and Civil Partnership Mechanisms into able to achieve the benefits of, for example, the power supply, then the subjects of small and medium- National Laws and Practice sized businesses has fewer rights before electricity and utility monopolies. 4.8. Organizational Sequence of Including the Consumer into the Tariff Process • It is even worse organized for interacting with civil society, for example in the field of consumer’s rights protection. (Another current example: the lack of a workable tri-partisanship system in Kazakhstan). BASIC QUESTIONNAIRE ON INDICATORS

49 TABLE OF CONTENT “The Third Sector” – Civil Society:

Section 1. HISTORY AND CURRENT STATUS OF • It is organized significantly worse than the “first” and “second” sectors. In particular, consumers of electricity ELECTRIC POWER INDUSTRY and utility services, individuals and legal entities, have no institutions; they appear before the service ҚАЗАҚША 1.1 Restructuring 1.2 Generating Capacities providers and the authorized agencies only as petitioners. Therefore the crowd of disjointed singles are 1.3 Electric Grids definitely in a losing position; 1.4 Electric Power Generation and Consumption 1.5 Tariff Policy • The inferior the status position of the “third sector” is enshrined in the Law: Public organizations may only

1.6 Sale of Electricity apply to the government authorities and service providers. They can sue in extreme case; РУССКИЙ 1.7 Electricity Market • The financial “ precariousness” of the “third sector”: If the “first sector” has a budget at its disposal (i.e., Section 2. DEVELOPMENT OBJECTIVES funds of the “second” and “third” sector), and if business entities are able to support themselves and their 2.1 General Development Parameters, Goals and public associations, than civil society has no institutional sources of funding. The organizations of the Objectives 2.2 The balance between demand and supply with the “third sector” are forced to act as seekers of foreign grants or “social orders” distributed by the “first sector”; growing energy consumption ENGLISH 2.3 Development of Renewable Energy Sources and • The inferiority of the “third sector” is fixed even in its own mentality. Thus, even if consumer organizations Their Integration into the National Grid (very few) are created, their names always contain the word “protection”. It is supposed to be only a 2.4 The Need to Attract the Large-Scale Investment for the Industry consumer protection, not their equitable representation in the partnership with service providers and 2.5 Energy Saving and Energy Efficiency Improvement government authorities.

Section 3. MAIN PRINCIPLES AND STRATEGIES Now the contacts between the government authorities, business entities and citizens are conducted, for the FOR ELECTRIC POWER INDUSTRY most part, through individual contacts. And if the government representative has the power of the state, and the DEVELOPMENT IN THE REPUBLIC OF KAZAKHSTAN business representative- its financial and organizational capabilities, the citizen has only himself. It is the way 3.1 Target Model of such interaction, which generates both the abuse, because of inequality, and mutual temptation to corruption. 3.2 Power Generation (Wholesale Market) Therefore, the fundamental solution of the problem lies in changing the main contacts of government, business 3.3 System Operator 3.4 Transmission and Distribution of Electricity and society to a level of interaction “legal entity to legal entity.” 3.5 Power Supply The following things are necessary to accomplish that: 3.6 Creation of Power Market • To make institutions from public representatives to interact with business entities and government Section 4. “TRANSPARENT TARIFF” CIVIL INITIATIVE: CONTENT AND WAYS OF authorities along the lines of the wholesale contacts, in particular, through the line of energy supply and IMPLEMENTATION utility service provision in the form of Transparent Tariff Association; 4.1 Critical Analysis of Bureaucratic Tariff Policy 4.2 Tariff Process Transparency: Laws and Practice • To enter into a partnership with service providers and authorized state agencies, referring to the practical 4.3 Monitoring of Natural Monopolies: Regulatory implementation of norms currently existing in the effective legislation, as the Party representing the Framework and Practice 4.4 General Critical Conclusion on Effective Procedure interests of electricity and utility services consumers; for Tariff Regulation 4.5 Offers for a Transparent and Effective Tariff Process • As the Party, to initiate the amendments and additions to the Laws in two directions: 4.6 Principles of Organization of Annual Professional and Independent Financial and Technical Audits - In terms of ensuring full transparency and efficiency of the tariff and investment processes; 4.7 Transparent Tariff Initiative: Promotion of Common Ideology and Civil Partnership Mechanisms into - In terms of ensuring equitable civil partnership of the “third sector” with the “first” and “second” National Laws and Practice sectors; 4.8. Organizational Sequence of Including the Consumer into the Tariff Process An offer impossible refuse: What the “third sector” could propose to the Legislator to ensure equitable civil partnership: BASIC QUESTIONNAIRE ON INDICATORS • It is necessary to fix by Law that any responsibility imposed by the government to individuals or legal entities (for example, payment of taxes, or payment of electricity tariffs approved by the government)

50 TABLE OF CONTENT generates a symmetrical responsibility by relevant state authorities to guarantee the countervailing right of the former to establish public associations having the right to represent their interests according to Section 1. HISTORY AND CURRENT STATUS OF

ELECTRIC POWER INDUSTRY the Law. Provided that, these rights shall also include permanent financing of their public activity by the ҚАЗАҚША 1.1 Restructuring government; 1.2 Generating Capacities 1.3 Electric Grids • Too, any responsibility assumed by the government with the respect to individuals or legal entities (for 1.4 Electric Power Generation and Consumption example, pensions and benefits payments, or ensuring the transparency and efficiency of the tariff and 1.5 Tariff Policy investment processes in the field of natural monopolies) generates a symmetrical responsibility by

1.6 Sale of Electricity РУССКИЙ 1.7 Electricity Market relevant government authorities to guarantee the countervailing right of citizens and legal entities to establish public associations representing their interests in the fulfillment of obligations adopted by the Section 2. DEVELOPMENT OBJECTIVES government. Similarly, the rights of such public associations include permanent financing of their activity 2.1 General Development Parameters, Goals and Objectives by the government. 2.2 The balance between demand and supply with the growing energy consumption ENGLISH 2.3 Development of Renewable Energy Sources and Their Integration into the National Grid 4.8. Organizational Sequence of Including the Consumer into the Tariff Process 2.4 The Need to Attract the Large-Scale Investment for the Industry 2.5 Energy Saving and Energy Efficiency Improvement At the first stage, the Transparent Tariff National Association with basic pilot participants in several key regions shall be established; Section 3. MAIN PRINCIPLES AND STRATEGIES FOR ELECTRIC POWER INDUSTRY • A start-up conference shall be held, the Charter and Work Program Memorandum shall be adopted, and a DEVELOPMENT IN THE REPUBLIC OF managing board shall be elected; KAZAKHSTAN 3.1 Target Model • Legal registration; 3.2 Power Generation (Wholesale Market) 3.3 System Operator • The work on the extension of the network to regional participants; 3.4 Transmission and Distribution of Electricity 3.5 Power Supply Three basic requirements for the Association are as follows: 3.6 Creation of Power Market • Firstly, the Association shall have free access to enter and participate in the activities and management, Section 4. “TRANSPARENT TARIFF” CIVIL including the establishment of the managing board, for an unlimited amount of individuals and legal INITIATIVE: CONTENT AND WAYS OF IMPLEMENTATION entities and representatives of civil society; 4.1 Critical Analysis of Bureaucratic Tariff Policy • Secondly, the managing and representative board established by the members of the Association shall be 4.2 Tariff Process Transparency: Laws and Practice 4.3 Monitoring of Natural Monopolies: Regulatory rightsized, efficient, and its chosen representatives shall have sufficient authority; Framework and Practice 4.4 General Critical Conclusion on Effective Procedure • Thirdly, the Association shall have both a national representative office and regional (regional, district, for Tariff Regulation city) branches, that are also fully independent in the representation of the Association at the local level. 4.5 Offers for a Transparent and Effective Tariff Process 4.6 Principles of Organization of Annual Professional The proposed legal form for the Association is as follows: Association of Legal Entities (ALE). and Independent Financial and Technical Audits 4.7 Transparent Tariff Initiative: Promotion of Common On the one hand, it makes the Association and its regional representatives sufficiently right-sized – only specific Ideology and Civil Partnership Mechanisms into NGO’s (non-governmental organization) can be the participants. National Laws and Practice 4.8. Organizational Sequence of Including the Consumer On the other hand, any citizen wishing to participate in the Transparent Tariff Initiative can always do so through into the Tariff Process the membership in one of the member NGO’s in the Association.

BASIC QUESTIONNAIRE ON INDICATORS

51 TABLE OF CONTENT The starting phase of activity of the central (Almaty) office and regional pilot members:

Section 1. HISTORY AND CURRENT STATUS OF • The appeal to electricity enterprises of relevant regions, as well as to departments of ARNM and GSS ELECTRIC POWER INDUSTRY (gasoline service station) with a proposals to enter into a Three-way Civil Partnership Memoranda in terms ҚАЗАҚША 1.1 Restructuring 1.2 Generating Capacities of the execution of norms, existing in the current Law, for the reporting of subjects of natural monopoly, 1.3 Electric Grids audition of enterprises and transparency of tariff estimates; 1.4 Electric Power Generation and Consumption 1.5 Tariff Policy • The practical inclusion of the reports of electricity enterprises into the norms and procedures for procurement

1.6 Sale of Electricity tenders, audits, public hearings fixed by the Law; РУССКИЙ 1.7 Electricity Market • Public presentations of start-up activity phase results: round tables, media publications. Section 2. DEVELOPMENT OBJECTIVES 2.1 General Development Parameters, Goals and Progress of Civil Initiative Activity: the “Transparent Tariff” Objectives 2.2 The balance between demand and supply with the • Arranging a dialogue between the Association and National Chamber of Entrepreneurs, National Association growing energy consumption of Mining and Smelting Enterprises, other business associations and consumer rights protection associations ENGLISH 2.3 Development of Renewable Energy Sources and with respect to the connection to the Transparent Tariff civil partnership; Their Integration into the National Grid 2.4 The Need to Attract the Large-Scale Investment for • Dialogue with ARNM with respect to the improvement of legal framework and tariff methodology practice, the Industry 2.5 Energy Saving and Energy Efficiency Improvement audition and reporting by the subjects of natural monopoly; • Section 3. MAIN PRINCIPLES AND STRATEGIES Dialogues with GSS and MINT (Ministry of Industry and New Technology) with respect to the presence of FOR ELECTRIC POWER INDUSTRY real competition at wholesale electricity market, the effectiveness of the activities of KOECM (Kazakhstan DEVELOPMENT IN THE REPUBLIC OF KAZAKHSTAN Operator of Electricity and Capacity Market) and the methodology for tariff setting at power plants; 3.1 Target Model • Dialogue with the Government of the Republic of Kazakhstan with respect to the investments in electrical 3.2 Power Generation (Wholesale Market) 3.3 System Operator power industry – the fundamental mechanisms and their reflection in the Law; 3.4 Transmission and Distribution of Electricity • The development of the proposals package for the inclusion of the civil partnership mechanisms (through 3.5 Power Supply 3.6 Creation of Power Market the example of the Transparent Tariff Initiative) into the state social order;

Section 4. “TRANSPARENT TARIFF” CIVIL • Dialogue with the committees of Chamber of Deputies and Senate with respect to inclusion of mechanisms INITIATIVE: CONTENT AND WAYS OF of tariff and investment processes transparency into the legal framework. IMPLEMENTATION 4.1 Critical Analysis of Bureaucratic Tariff Policy 4.2 Tariff Process Transparency: Laws and Practice 4.3 Monitoring of Natural Monopolies: Regulatory Framework and Practice 4.4 General Critical Conclusion on Effective Procedure for Tariff Regulation 4.5 Offers for a Transparent and Effective Tariff Process 4.6 Principles of Organization of Annual Professional and Independent Financial and Technical Audits 4.7 Transparent Tariff Initiative: Promotion of Common Ideology and Civil Partnership Mechanisms into National Laws and Practice 4.8. Organizational Sequence of Including the Consumer into the Tariff Process

BASIC QUESTIONNAIRE ON INDICATORS

52 TABLE OF CONTENT BASIC QUESTIONNAIRE ON INDICATORS Section 1. HISTORY AND CURRENT STATUS OF ELECTRIC POWER INDUSTRY ҚАЗАҚША Section 2. DEVELOPMENT OBJECTIVES А. STRUCTURE OF THE NATIONAL ENERGY SECTOR: Section 3. MAIN PRINCIPLES AND STRATEGIES FOR ELECTRIC POWER INDUSTRY DEVELOPMENT IN THE REPUBLIC OF KAZAKHSTAN Regulating authorities: Section 4. “TRANSPARENT TARIFF” CIVIL Political institutions/authorities: РУССКИЙ INITIATIVE: Ministry of Industry and New Technology of the Agency on Regulation of Natural Monopolies of CONTENT AND WAYS OF IMPLEMENTATION Republic of Kazakhstan the Republic of Kazakhstan Ministry of Regional Development of the Republic of BASIC QUESTIONNAIRE ON INDICATORS Kazakhstan ENGLISH

SUMMARY TABLE of selected indicators of UTILITY ENTERPRISES: “Electricity Governance Initiative” program SUMMARY TABLE Indicators on the “Political Enterprises generating and Enterprises distributing Enterprises on high-voltage Process” of Management of the Electricity Power producing electricity/energy electricity: electricity transmission: Sector in Kazakhstan products: 18 regional energy Joint-stock company TABLE OF INDICATORS on “Political Process” Generation of electricity is of the Electricity Power Sector Management in companies (REC’s); «KEGOC» Kazakhstan performed 70 power stations. 150 small transmission SUMMARY TABLE indicators on “Regulatory 1. Steam turbine power stations – (Kazakhstan Electricity Grid Process” of electricity sector management of companies Operating Company) Kazakhstan 16 448 МВт; Table of evaluation of “Regulatory Process” indicators of the electricity sector governance in 2. Gas turbine power stations – Kazakhstan 1 425 МВт; SUMMARY TABLE of indicators on the evaluation 3. Hydroelectric power plants– of ecological and social aspects of the Kazakhstan’s electrical power sector management 2 569 МВт. TABLE OF INDICATORS on the evaluation of ecological and social aspects of Kazakhstan’s CONSUMERS: electricity sector management FILLED PROJECT INDICATORS 1. Industry– 54,2%; 4. Residential energy 7. Residential energy consumption (city) consumption (village) – REGULATORY PROCESS INDICATORS 2. Auxiliaries – 10, 5%; –7,6%; 3,1%; 3. Residential energy consumption 5. Losses– 7,3%; 8. Agriculture – 2,1%; (public) – 8,4%; 6. Transport– 5,4%; 9. Construction industry – 1,3%.

53 TABLE OF CONTENT Section 1. HISTORY AND CURRENT STATUS OF Five most important measures in the Five most disputable issues in the sector ELECTRIC POWER INDUSTRY sector during last five years at the present time ҚАЗАҚША Section 2. DEVELOPMENT OBJECTIVES Section 3. MAIN PRINCIPLES AND STRATEGIES FOR ELECTRIC POWER INDUSTRY DEVELOPMENT IN THE REPUBLIC OF 1. Creation and reformation of the “wholesale 1. Non-transparency of tariffs, operational KAZAKHSTAN electricity market” and investment activity of power stations Section 4. “TRANSPARENT TARIFF” CIVIL and grids even for authorized and regulating РУССКИЙ INITIATIVE: CONTENT AND WAYS OF 2. Transition to long-term “marginal” bodies. IMPLEMENTATION generation tariffs 2. Absence of an organized party by the 3. Transfer of REC’s tariffs to “Benchmarking” BASIC QUESTIONNAIRE ON INDICATORS Consumer in the tariff process ENGLISH 4. Adoption of the Government “Green 3. Disability of the idea of “state-and-private SUMMARY TABLE of selected indicators of Economics” program including energy partnership” and in particular, absence of a “Electricity Governance Initiative” program saving and development of alternative energy private investor in electric power industry SUMMARY TABLE Indicators on the “Political 5. Decision to construct the first nuclear power Process” of Management of the Electricity Power 4. A gap between the investment needed for Sector in Kazakhstan station in Kazakhstan the industry and paying capacity of consumers

TABLE OF INDICATORS on “Political Process” 5. of the government on additional of the Electricity Power Sector Management in Plans Kazakhstan implementation of power market into the “wholesale electricity market” SUMMARY TABLE indicators on “Regulatory Process” of electricity sector management of Kazakhstan FORMATION OF POLICY / LEGAL FRAMEWORK: Table of evaluation of “Regulatory Process” B. indicators of the electricity sector governance in Kazakhstan B.1. Freedom of Information Act: Yes – package of corresponding acts is available SUMMARY TABLE of indicators on the evaluation B.2. Electricity Legislation: National – available of ecological and social aspects of the Kazakhstan’s electrical power sector management Legislative system: Parliamentary TABLE OF INDICATORS on the evaluation of B.3. Legislative authorities responsible for development of laws ecological and social aspects of Kazakhstan’s electricity sector management 1) President of the Republic of Kazakhstan FILLED PROJECT INDICATORS 2) Parliament of the Republic of Kazakhstan REGULATORY PROCESS INDICATORS 3) Government of the Republic of Kazakhstan B.4. State authorities responsible for implementation and performance of electricity policy 1) Government of the Republic of Kazakhstan 2) Ministry of Industry and New Technology of the Republic of Kazakhstan 3) Agency on Regulation of Natural Monopolies

54 TABLE OF CONTENT 4) Ministry of Regional Development Section 1. HISTORY AND CURRENT STATUS OF B.5. State authority responsible for planning in the electricity sector: Ministry of Industry and New Technology ELECTRIC POWER INDUSTRY of the Republic of Kazakhstan ҚАЗАҚША Section 2. DEVELOPMENT OBJECTIVES Section 3. MAIN PRINCIPLES AND STRATEGIES B.6. Core source of legislative acts in the electricity sector: Ministry of Industry and New Technology of the FOR ELECTRIC POWER INDUSTRY Republic of Kazakhstan DEVELOPMENT IN THE REPUBLIC OF KAZAKHSTAN B.7. State authority governing the sector:

Section 4. “TRANSPARENT TARIFF” CIVIL РУССКИЙ INITIATIVE: Ministry of Industry and New Technologies of the Republic of Kazakhstan CONTENT AND WAYS OF IMPLEMENTATION Agency on Regulation of Natural Monopolies (ARNM) B.8. State authority responsible for renewable energy sources: BASIC QUESTIONNAIRE ON INDICATORS

Ministry of Industry and New Technologies of the Republic of Kazakhstan ENGLISH

SUMMARY TABLE of selected indicators of Ministry for Protection of Environment and Water Sources “Electricity Governance Initiative” program B.9. State authority responsible for electrification of rural areas: SUMMARY TABLE Indicators on the “Political Process” of Management of the Electricity Power Ministry of Industry and New Technologies of the Republic of Kazakhstan Sector in Kazakhstan Ministry of Agriculture of the Republic of Kazakhstan TABLE OF INDICATORS on “Political Process” of the Electricity Power Sector Management in B.10. Electricity tariffs are set by the following authorities: Kazakhstan Ministry of Industry and New Technologies of the Republic of Kazakhstan SUMMARY TABLE indicators on “Regulatory Process” of electricity sector management of Agency on Regulation of Natural Monopolies of the Republic of Kazakhstan Kazakhstan B.11. Tracing of released hydrocarbon in the electricity sector – Yes, it is carried out as far as the Ministry for Table of evaluation of “Regulatory Process” Protection of Environment and Water Sources is concerned indicators of the electricity sector governance in Kazakhstan B.12. Official requirement of carrying out environmental expertise within the sector – Yes, it is available SUMMARY TABLE of indicators on the evaluation B.13. Manual on Environmental Expertise: of ecological and social aspects of the Kazakhstan’s electrical power sector management Generation- provided TABLE OF INDICATORS on the evaluation of Transmission – provided ecological and social aspects of Kazakhstan’s electricity sector management Distribution – provided FILLED PROJECT INDICATORS REGULATORY PROCESS INDICATORS C. REGULATION: C.1. National and Regional C.2. Liabilities: Tariffs

55 TABLE OF CONTENT Licensing Section 1. HISTORY AND CURRENT STATUS OF Court decision ELECTRIC POWER INDUSTRY ҚАЗАҚША Section 2. DEVELOPMENT OBJECTIVES C.3. Universal right to services – Yes Section 3. MAIN PRINCIPLES AND STRATEGIES C.4. Regulation on contracts: FOR ELECTRIC POWER INDUSTRY DEVELOPMENT IN THE REPUBLIC OF KAZAKHSTAN It is performed within the framework of activity of Kazakhstan’s wholesale electricity and power market

Section 4. “TRANSPARENT TARIFF” CIVIL C.5. Program of efficiency of services offered to ultimate users: there is a Government “Program of Electricity РУССКИЙ INITIATIVE: CONTENT AND WAYS OF Development for the Period 2009-2014” IMPLEMENTATION C.6. Efficiency level of the sector: at a rate of 70%

BASIC QUESTIONNAIRE ON INDICATORS C.7. Expected level of nontechnical losses/tamper: ENGLISH Technical losses – up to 20%, commercial – up to 10% SUMMARY TABLE of selected indicators of C.8. Accountability of utility enterprises: Restricted “Electricity Governance Initiative” program C.9. Reporting on environmental impact: Yes SUMMARY TABLE Indicators on the “Political Process” of Management of the Electricity Power Sector in Kazakhstan TABLE OF INDICATORS on “Political Process” of the Electricity Power Sector Management in GENERATION: Kazakhstan D. SUMMARY TABLE indicators on “Regulatory D.1. Total volume of installed power (Total volume of installed power: sum of maximum power of all generating Process” of electricity sector management of units at the moment of installation): 16,425 MW Kazakhstan D.2. Fuel mixture: Table of evaluation of “Regulatory Process” indicators of the electricity sector governance in Kazakhstan Coal – 74% Wind – 0.3% SUMMARY TABLE of indicators on the evaluation Gasoline / Diesel – of ecological and social aspects of the 4% Solar energy – 0.2% Kazakhstan’s electrical power sector management Natural gas/ Liquefied petroleum gas –11 % TABLE OF INDICATORS on the evaluation of Hydraulic energy from small sources – 3% ecological and social aspects of Kazakhstan’s Hydraulic energy from large sources – Combination of heat and electric energy/cogene electricity sector management 10% ration – 30 % FILLED PROJECT INDICATORS New inexhaustible energy sources: 0.5 % REGULATORY PROCESS INDICATORS D.3 Independent power producers (IPP): available Entity issuing contracts to independent power producers: Ministry of Industry and New Technologies Number of contracts of independent power producers: approximately 30

56 TABLE OF CONTENT Section 1. HISTORY AND CURRENT STATUS OF E. ACCESS, TRANSMISSION AND DISTRIBUTION ELECTRIC POWER INDUSTRY ҚАЗАҚША Section 2. DEVELOPMENT OBJECTIVES E.1. Population having access to electricity: 98% Section 3. MAIN PRINCIPLES AND STRATEGIES FOR ELECTRIC POWER INDUSTRY E.2. Urban population having access to electricity: 99% DEVELOPMENT IN THE REPUBLIC OF KAZAKHSTAN E.3. Rural population having access to electricity: 91%

Section 4. “TRANSPARENT TARIFF” CIVIL E.4. Losses through distribution and transmission of electricity: 13.3 % РУССКИЙ INITIATIVE: CONTENT AND WAYS OF IMPLEMENTATION E.5. National grid – Yes Scope of coverage: 92% E.6. Program of electrification of the rural areas: available BASIC QUESTIONNAIRE ON INDICATORS

E.7. Financing electrification process of the rural areas: state and tariff ENGLISH E.8. Reliability of electricity services: Random/accidental cutoffs SUMMARY TABLE of selected indicators of “Electricity Governance Initiative” program SUMMARY TABLE Indicators on the “Political Process” of Management of the Electricity Power Sector in Kazakhstan F. ECONOMIC SIGNIFICANCE: TABLE OF INDICATORS on “Political Process” of the Electricity Power Sector Management in F.1. Share of the sector in the GNP: 14 billion US dollars, 7 % Kazakhstan F.2. Electricity export – Yes Electricity import – Yes, 3-7% SUMMARY TABLE indicators on “Regulatory Process” of electricity sector management of F.3. Correlation of incomes and expenditures: Profitability is about 25%. Kazakhstan F.4. Average percentage fluctuation of electricity tariffs during the previous year: about 10 % Table of evaluation of “Regulatory Process” indicators of the electricity sector governance in F.5. Indebtedness ratio (expressed in % of annual incomes): from 3 to 7% Kazakhstan F.6. Electricity tariffs: SUMMARY TABLE of indicators on the evaluation of ecological and social aspects of the • Urban dwellers: different tariffs by regions, from 5 to 10 cents/kW-hour Monthly income: about 750 dollars Kazakhstan’s electrical power sector management per an employed adult TABLE OF INDICATORS on the evaluation of • Average consumption: from 100 to 120 kW-hour/month per capita ecological and social aspects of Kazakhstan’s electricity sector management • Rural dwellers (43% of population): different tariffs by regions, from 5 to 10 cents/kW-hour FILLED PROJECT INDICATORS • Monthly income: 300 dollars maximum REGULATORY PROCESS INDICATORS • Average consumption: 70-120 kW-hour/month per capita • Commercial consumption: about 60% of total consumption • Average consumption: wide-range • Annual escalation of tariffs: within the range of 5-15% F.7. Intensity of electricity consumption:

57 TABLE OF CONTENT Approximately 8 billion dollars annually (about 4% of the GDP) Section 1. HISTORY AND CURRENT STATUS OF F.8. Anticipated growth of demand: 5.0% ELECTRIC POWER INDUSTRY ҚАЗАҚША Section 2. DEVELOPMENT OBJECTIVES Section 3. MAIN PRINCIPLES AND STRATEGIES FOR ELECTRIC POWER INDUSTRY DEVELOPMENT IN THE REPUBLIC OF KAZAKHSTAN G. INVESTMENT

Section 4. “TRANSPARENT TARIFF” CIVIL РУССКИЙ INITIATIVE: G.1. Amount of annual investments within the sector over the previous three years: CONTENT AND WAYS OF IMPLEMENTATION 1. 2010 – 756.0 million USD; 2. 2011 – 850.0 million USD; BASIC QUESTIONNAIRE ON INDICATORS

3. 2012 – 950.0 million USD. ENGLISH

SUMMARY TABLE of selected indicators of G.2. National investments: 90% Foreign investments: 10% “Electricity Governance Initiative” program G.4. Sources of public support of the sector: Tariffs SUMMARY TABLE Indicators on the “Political Process” of Management of the Electricity Power G.5. Granting loans for performance of structural reorganization/development of strategy of the electricity Sector in Kazakhstan sector – available TABLE OF INDICATORS on “Political Process” of the Electricity Power Sector Management in Kazakhstan SUMMARY TABLE indicators on “Regulatory H. PRIVATIZATION: Process” of electricity sector management of Kazakhstan H.1. Key power stations and grids: Privatized, over a period from 1996 to 2001 Table of evaluation of “Regulatory Process” H.2. Transmission is separated from Generation indicators of the electricity sector governance in Kazakhstan H.3. Distribution is separated from Transmission SUMMARY TABLE of indicators on the evaluation H.4. Private Producers/companies generating electricity – present of ecological and social aspects of the Kazakhstan’s electrical power sector management H.5. Companies distributing electricity: generally private TABLE OF INDICATORS on the evaluation of H.6. Electricity transmission sector: Mostly privatized, Kazakhstan Electricity Grid Operating Company (KEGOC) ecological and social aspects of Kazakhstan’s electricity sector management remains in public ownership. FILLED PROJECT INDICATORS REGULATORY PROCESS INDICATORS

58 TABLE OF CONTENT SUMMARY TABLE Section 1. HISTORY AND CURRENT STATUS OF ELECTRIC POWER INDUSTRY of selected indicators of “Electricity Governance Initiative” program ҚАЗАҚША Section 2. DEVELOPMENT OBJECTIVES Section 3. MAIN PRINCIPLES AND STRATEGIES PRIORITY INDICATORS OF THE PROGRAM FOR ELECTRIC POWER INDUSTRY DEVELOPMENT IN THE REPUBLIC OF «Electricity Governance Initiative» KAZAKHSTAN

ENVIRONMENTAL AND SOCIAL AS- РУССКИЙ Section 4. “TRANSPARENT TARIFF” CIVIL POLITICAL PROCESS REGULATORY PROCESS INITIATIVE: PECTS CONTENT AND WAYS OF IMPLEMENTATION • Capabilities of the legislative • Institutional structure of • Ability of executive authorities to BASIC QUESTIONNAIRE ON INDICATORS committee regulatory decisions; evaluate environmental issues; • Effective operation of the • Powers of the Regulating • Ability of executive authorities to ENGLISH legislative committee on Authority; evaluate social issues; SUMMARY TABLE of selected indicators of electricity supply “Electricity Governance Initiative” program • Jurisdiction of the • Potential of the civil society SUMMARY TABLE Indicators on the “Political • Human resources in the Regulating Authority; organizations; Process” of Management of the Electricity Power Ministry of Electricity Supply/ • Selection of employees of • Public disclosure of information Sector in Kazakhstan Department; the regulating Authority; on the basis and for the purpose TABLE OF INDICATORS on “Political Process” • Annual reports of the ministry/ of policy reforms; of the Electricity Power Sector Management in • Independence of the Department of Energy; Kazakhstan regulating Authority; • Efficiency of the process of public involvement; SUMMARY TABLE indicators on “Regulatory • Effective functioning of a • Mechanism of appeal; Process” of electricity sector management of separate agency on planning/ • Consideration of environmental Kazakhstan development of policy; • Training of members protection issues in the Table of evaluation of “Regulatory Process” and employees of the legislation and policy reforming • Quality of legal debates on Laws indicators of the electricity sector governance in regulating Authority; sector; Kazakhstan concerning electricity; • Clarity of regulating • Clear powers and jurisdiction in SUMMARY TABLE of indicators on the evaluation • Quality of coverage of policy and procedures and providing an ecological decision of ecological and social aspects of the reforms in the electricity sector substantial grounds for for the electricity power sector Kazakhstan’s electrical power sector management by mass media; decisions; projects; TABLE OF INDICATORS on the evaluation of • Clarity of the process for ecological and social aspects of Kazakhstan’s • Preventive initiatives of • Public participation in the policy electricity sector management participation of civil society in the regulating Authority; development for the reduction of FILLED PROJECT INDICATORS taking political measures; environmental impact; • Discovery of accessible • Transparent policy formulation REGULATORY PROCESS INDICATORS documents which are • Inclusion of consideration of in the field of independent at the disposal of the environmental issues into the power; Regulating Authority; national plan of electricity sector; • Transparency of attracting • Completeness of the evaluation donors through loans granted of the Law influencing the for policy reasons; environment, policy and procedures;

59 TABLE OF CONTENT • Transparency of involvement • Orders and decisions of • Public participation in the Section 1. HISTORY AND CURRENT STATUS OF ELECTRIC POWER INDUSTRY of donors through technical the regulating Authority; environmental impact evaluation ; support; ҚАЗАҚША Section 2. DEVELOPMENT OBJECTIVES • Distribution of decisions; • Ability of executive authorities to Section 3. MAIN PRINCIPLES AND STRATEGIES • Transparent and responsible assess environmental issues; • Tariff philosophy; FOR ELECTRIC POWER INDUSTRY implementation of IPP policy/ DEVELOPMENT IN THE REPUBLIC OF • Ability of executive authorities to KAZAKHSTAN legislation; • Licensing; evaluate social issues; Section 4. “TRANSPARENT TARIFF” CIVIL • • Periodic reports on РУССКИЙ INITIATIVE: Transparent selection of private • Information concerning CONTENT AND WAYS OF sector service suppliers; work with licensees and involvement of consultants is IMPLEMENTATION enterprises; • Transparency of assets publicly available; • BASIC QUESTIONNAIRE ON INDICATORS valuation/balance restructuring; Consumption services and • Regulatory agency’s reaction

delivery quality. ENGLISH • Transparency and to the claims on social and accountability in designing and environment issues; SUMMARY TABLE of selected indicators of “Electricity Governance Initiative” program implementation of subsidies. • Procedure for public access to regulatory agency’s documents; SUMMARY TABLE Indicators on the “Political Process” of Management of the Electricity Power • Place for public participation in Sector in Kazakhstan the regulation process; TABLE OF INDICATORS on “Political Process” • Public has access to the regulatory of the Electricity Power Sector Management in Kazakhstan documents and hearings; SUMMARY TABLE indicators on “Regulatory • Institutional mechanisms for Process” of electricity sector management of representing the interests of weak Kazakhstan groups; Table of evaluation of “Regulatory Process” • Creation of ability of weaker indicators of the electricity sector governance in Kazakhstan parties involved in the participation of regulatory SUMMARY TABLE of indicators on the evaluation process; of ecological and social aspects of the Kazakhstan’s electrical power sector management • Interference of civil society into TABLE OF INDICATORS on the evaluation of the regulatory process; ecological and social aspects of Kazakhstan’s • Obligation of the power supplier electricity sector management to the civil society organizations FILLED PROJECT INDICATORS and potentially affected REGULATORY PROCESS INDICATORS population; • Participation in decision-making process concerning the adequacy of electricity prices.

60 TABLE OF CONTENT SUMMARY TABLE Section 1. HISTORY AND CURRENT STATUS OF ELECTRIC POWER INDUSTRY Indicators on the “Political Process” of Management of the Electricity Power Sector in Kazakhstan ҚАЗАҚША Section 2. DEVELOPMENT OBJECTIVES Section 3. MAIN PRINCIPLES AND STRATEGIES General explanations: The Political Process is understood to be the process of formation of a policy for FOR ELECTRIC POWER INDUSTRY DEVELOPMENT IN THE REPUBLIC OF the electricity power sector at legislative (Parliament of the Republic), and executive authority (the Government KAZAKHSTAN of the Republic, the relevant Ministries/Departments) levels that includes actions on development, consideration

Section 4. “TRANSPARENT TARIFF” CIVIL and enactment of laws and regulations taken by the legislative and executive authorities. РУССКИЙ INITIATIVE: CONTENT AND WAYS OF In order to carry out an objective valuation and analysis of the management of the electricity sector of Kazakhstan IMPLEMENTATION with 36 selected indicators of “Political Process”, 26 indicators (PP1, PP4, PP5, PP8-PP10, PP12-PP19, PP21,PP23-PP29 and PP31-PP34) were selected from a range of tools for the “Electric Power Management Initiative” international BASIC QUESTIONNAIRE ON INDICATORS program; the tools included 15 political process indicators and 11 indicators of socio-environmental aspect. ENGLISH For this purposes, all participants of the process bearing a relation to the electricity power sector management SUMMARY TABLE of selected indicators of have been considered, comprised of the main state institutions responsible for legislative and executive functions, “Electricity Governance Initiative” program and international investment structures. SUMMARY TABLE Indicators on the “Political Process” of Management of the Electricity Power As follows from the general analysis, the average “Political Process” score for the management of the electricity Sector in Kazakhstan sector in Kazakhstan is close to the “Average” level of valuation (3.06 points). TABLE OF INDICATORS on “Political Process” The process indicators evaluate the efficiency of political process by the following criteria: of the Electricity Power Sector Management in Kazakhstan 1. The evaluation of the potential and authority of the Parliament and public agencies participating in the SUMMARY TABLE indicators on “Regulatory process of formation of policy in the electricity sector; Process” of electricity sector management of 2. Decision making procedure at all levels participating in the formation of policy and development of the Kazakhstan electricity sector; Table of evaluation of “Regulatory Process” indicators of the electricity sector governance in 3. The theoretical and situational analysis of activity of corresponding state institutions involved in the political Kazakhstan process; SUMMARY TABLE of indicators on the evaluation 4. Participation, its level, possibilities, degree of involvement, procedures and rules for participation in the of ecological and social aspects of the Kazakhstan’s electrical power sector management political process for general public, civil society organizations and academic community; TABLE OF INDICATORS on the evaluation of 5. The procedures, presentations and disclosure of information about the activity of the institution on formation ecological and social aspects of Kazakhstan’s of policy available for the general public; electricity sector management 6. The ability of all organizations involved in the policy formation process to evaluate the condition and prospects FILLED PROJECT INDICATORS of the sector development in social and environmental matters; REGULATORY PROCESS INDICATORS 7. The clarity in formulating the policy for independent power generators; 8. The state of, openness and interest displayed in creating opportunities for the participation of international donor organizations in the policy-making process for the power sector;

61 TABLE OF CONTENT TABLE. AN EXAMPLE OF HOW TO FILL AN INDICATOR Section 1. HISTORY AND CURRENT STATUS OF ELECTRIC POWER INDUSTRY ҚАЗАҚША Section 2. DEVELOPMENT OBJECTIVES PP 16 CLARIFICATION OF PUBLIC PARTICIPATION IN DECISION-MAKING PROCESS Section 3. MAIN PRINCIPLES AND STRATEGIES FOR ELECTRIC POWER INDUSTRY Elements of Indica- Explanations DEVELOPMENT IN THE REPUBLIC OF quality tor KAZAKHSTAN

Section 4. “TRANSPARENT TARIFF” CIVIL Responsibility Yes The organizers of events on public discussion of the «Energy Saving — 2020» РУССКИЙ INITIATIVE: CONTENT AND WAYS OF for the decisions program have informed the participants of the public events about the IMPLEMENTATION initiator and the authorized state institution. The developer of the «Energy Saving — 2020» program is indicated therein. BASIC QUESTIONNAIRE ON INDICATORS A clear time No Unfortunately, the mentioned informational resources and data on “round ENGLISH frame for tables” for the purpose of program discussion, do not give information about SUMMARY TABLE of selected indicators of “Electricity Governance Initiative” program decision-making whether a clear time frame has been established; usually, the need to provide proposals is announced asap. SUMMARY TABLE Indicators on the “Political Process” of Management of the Electricity Power Sector in Kazakhstan A clear time No Data about a clear time frame for approval of the program and, correspondingly, frame for making suggestions by researchers is not present. TABLE OF INDICATORS on “Political Process” of the Electricity Power Sector Management in submission of Kazakhstan proposals

SUMMARY TABLE indicators on “Regulatory nd Process” of electricity sector management of Accountability No According to “Atameken” NECK, on June 2 of the year, a “round table” was Kazakhstan in the proposals arranged in order to discuss the project of “Energy Saving– 2020” with the offered participation of Deputies from Majilis Parliament, independent experts, Table of evaluation of “Regulatory Process” indicators of the electricity sector governance in representatives of relevant Ministries and other interested organizations. Kazakhstan The “round table” participants made the following presentations: 1. “The SUMMARY TABLE of indicators on the evaluation role of non-governmental organizations in the matters of energy saving and of ecological and social aspects of the energy efficiency enhancement in the sphere of housing and utility services”; Kazakhstan’s electrical power sector management 2. “Secure and energy-saving windows are one of the main trends of the state TABLE OF INDICATORS on the evaluation of strategy of transition to the “Green economy”; 3. “The State Energety Register, ecological and social aspects of Kazakhstan’s including the Rules for Conduction of Energy Audit and Rules for Accreditation electricity sector management in the Sphere of Energy Saving”; 4. The role of the “Kazakhstan Association of FILLED PROJECT INDICATORS Energy Auditors” Legal Entity Association in the performance of state policy in the sphere of energy saving and energy efficiency enhancement”. According REGULATORY PROCESS INDICATORS to the results of the event, a decision was made concerning the necessity for holding a similar “round table” in all Kazakhstan regions. As far as it is known from press and media, the recommendation to hold the “round tables” in Kazakhstan’s regions was followed; however, it is not known whether there were any recommendations directly resulting from the program.

62 TABLE OF CONTENT Consulting No Information about clear results, resolutions, protocols, lists of participants, Section 1. HISTORY AND CURRENT STATUS OF ELECTRIC POWER INDUSTRY process as well as materials regarding public hearings and other socially significant ҚАЗАҚША Section 2. DEVELOPMENT OBJECTIVES documentation events are not available through public sources. Section 3. MAIN PRINCIPLES AND STRATEGIES FOR ELECTRIC POWER INDUSTRY Timely dissemi- The public discussion of «Energy Saving – 2020» program was organized DEVELOPMENT IN THE REPUBLIC OF nation of infor- in June by regional executive institutions, and its purpose was to provide KAZAKHSTAN mation about information about the document drawn up by the Ministry of Industry and Section 4. “TRANSPARENT TARIFF” CIVIL РУССКИЙ INITIATIVE: the process New Technologies. In late August, i.e. three months later, the program was CONTENT AND WAYS OF approved by the Government. “Round tables” were held in regions following IMPLEMENTATION a week or two after holding the event in Astana; following the advance notification (p.60 of EGI-Toolkit), there was a failure to provide the timeliness. BASIC QUESTIONNAIRE ON INDICATORS ENGLISH Widespread No There are no findings about widespread information; Internet resources have SUMMARY TABLE of selected indicators of dissemination information only about completed events. “Electricity Governance Initiative” program of information SUMMARY TABLE Indicators on the “Political about the pro- Process” of Management of the Electricity Power cess Sector in Kazakhstan TABLE OF INDICATORS on “Political Process” Target Yes Information about the «round tables» organized demonstrates that these of the Electricity Power Sector Management in dissemination public events were attended by representatives of NGO’s, state institutions Kazakhstan of information and entrepreneurs. At the same time, it is not clear, for example, how groups SUMMARY TABLE indicators on “Regulatory about the of the entrepreneurs and NGO’s informed the community or those whom Process” of electricity sector management of process they represented at these events. Kazakhstan Table of evaluation of “Regulatory Process” DETAILED EXPLANATION: The information disseminated by MINT of the Republic of Kazakhstan states that indicators of the electricity sector governance in “The yearly energy consumption decrease of 10% will be happening according to the scenario. For this purpose, Kazakhstan the Ministry of Industry and new Technologies of the Republic of Kazakhstan develops the “Energy Saving SUMMARY TABLE of indicators on the evaluation — 2020” program on behalf of the Head of the State, the draft of which is now discussed in the regions. of ecological and social aspects of the Presentations have already been made at the public hearings in Eastern Kazakhstan Province, as well as in Kazakhstan’s electrical power sector management Pavlodar and Karaganda, involving representatives of the Mayoral offices, industrial and municipal enterprises, TABLE OF INDICATORS on the evaluation of non-governmental organizations and KCK” (http://www.nomad.su/?a=4-201306110020). Therefore, according ecological and social aspects of Kazakhstan’s to public relations, the main emphasis was on the non-governmental organizations; the general public was electricity sector management not mentioned, it was also not specified how this information and the public discussions were to continue on FILLED PROJECT INDICATORS the initiative of NGO’s with the participation of citizens. REGULATORY PROCESS INDICATORS On the third of June of the current year, the first public hearing on the “Energy Saving – 2020” program took place in the Townhall of Karaganda. It was chaired by S. Idrisov, Deputy Mayor of the Karaganda Province. Representatives of MINT of the Republic of Kazakhstan, “Kazakhenergoexpertise” JSC, “Kazakhstan Centre of Modernization and Development of the housing and utility services» JSC, the National Chamber of Housing and Utility Services and Construction and the Kazakhstan Association of Energy Auditors (http://www.kazee. kz/news/v-akimate-goroda-karaganda-proshlo-pervoe-obschest/) took part in the discussion.

63 TABLE OF CONTENT Section 1. HISTORY AND CURRENT STATUS OF RATING SELECTION ELECTRIC POWER INDUSTRY ҚАЗАҚША Section 2. DEVELOPMENT OBJECTIVES Not applicable / The rating is absent Section 3. MAIN PRINCIPLES AND STRATEGIES FOR ELECTRIC POWER INDUSTRY DEVELOPMENT IN THE REPUBLIC OF The decision-making process corresponds to none of the quality elements “Low” KAZAKHSTAN

Section 4. “TRANSPARENT TARIFF” CIVIL The decision-making process corresponds to1-2 quality elements “Low to Average” РУССКИЙ INITIATIVE: CONTENT AND WAYS OF IMPLEMENTATION The decision-making process corresponds to3-4 quality elements “Average”

BASIC QUESTIONNAIRE ON INDICATORS The decision-making process corresponds to5-6 quality elements “Average to High” ENGLISH The decision-making process corresponds to7-8 quality elements “High” SUMMARY TABLE of selected indicators of “Electricity Governance Initiative” program Name and organization of the researcher: Tnaliev Ulugbek Serikovich, “Centre of Budget Analysis and Economic SUMMARY TABLE Indicators on the “Political Monitoring” Public Fund Process” of Management of the Electricity Power Sector in Kazakhstan Information Source: Websites of authorized state institutions (http://www.primeminister.kz/blog/view/327,), TABLE OF INDICATORS on “Political Process” “Atameken Union”NEC (http://atamekenunion.kz/expert/out, http://atamekenunion.kz/tops/view/2347), of the Electricity Power Sector Management in news lines (http://www.zakon.kz/4556412-serik-akhmetov-poruchil-razrabotat-i.html, http://www.nomad. Kazakhstan su/?a=3-201308280018, http://www.bnews.kz/ru/news/post/145275/) and legislation (http://adilet.zan.kz/ SUMMARY TABLE indicators on “Regulatory rus/docs/Z1200000541, http://adilet.zan.kz/rus/docs/P1300000904). Process” of electricity sector management of Kazakhstan Table of evaluation of “Regulatory Process” indicators of the electricity sector governance in Kazakhstan SUMMARY TABLE of indicators on the evaluation of ecological and social aspects of the Kazakhstan’s electrical power sector management TABLE OF INDICATORS on the evaluation of ecological and social aspects of Kazakhstan’s electricity sector management FILLED PROJECT INDICATORS REGULATORY PROCESS INDICATORS

64 TABLE OF CONTENT TABLE OF INDICATORS Section 1. HISTORY AND CURRENT STATUS OF ELECTRIC POWER INDUSTRY on “Political Process” of the Electricity Power Sector Management in Kazakhstan ҚАЗАҚША Section 2. DEVELOPMENT OBJECTIVES Section 3. MAIN PRINCIPLES AND STRATEGIES FOR ELECTRIC POWER INDUSTRY Political process DEVELOPMENT IN THE REPUBLIC OF KAZAKHSTAN № Name Quality Elements Indicator Rating Grade

Section 4. “TRANSPARENT TARIFF” CIVIL РУССКИЙ INITIATIVE: CONTENT AND WAYS OF Access to information Yes IMPLEMENTATION Improvement of information No BASIC QUESTIONNAIRE ON INDICATORS Possibilities of

RP 1 the legislative Financial resources No “Average” 3 ENGLISH committee SUMMARY TABLE of selected indicators of Powers and authority Yes “Electricity Governance Initiative” program SUMMARY TABLE Indicators on the “Political Priority Yes Process” of Management of the Electricity Power Sector in Kazakhstan Openness of interests Yes TABLE OF INDICATORS on “Political Process” of the Electricity Power Sector Management in Committee activity Yes Kazakhstan SUMMARY TABLE indicators on “Regulatory Proved reports No Process” of electricity sector management of Kazakhstan The effective work Public consultations No of the legislative Table of evaluation of “Regulatory Process” RP 4 “Average” 3 committee on indicators of the electricity sector governance in Transparency of petitions to the Yes Kazakhstan energy supply committee SUMMARY TABLE of indicators on the evaluation of ecological and social aspects of the Kazakhstan’s electrical power sector management Transparency of reports of the No committee TABLE OF INDICATORS on the evaluation of ecological and social aspects of Kazakhstan’s electricity sector management Reporting on the performance Yes

FILLED PROJECT INDICATORS Clear criteria Yes REGULATORY PROCESS INDICATORS Personnel policy Expected authority Yes in the Ministry RP 5 “High” 5 of Electricity/ Openness of interests Yes committee Rules preventing conflict of interests Yes

65 TABLE OF CONTENT Financial reporting Yes Section 1. HISTORY AND CURRENT STATUS OF ELECTRIC POWER INDUSTRY Annual ҚАЗАҚША Review of the performance Yes Section 2. DEVELOPMENT OBJECTIVES RP reports of the “High” 5 Section 3. MAIN PRINCIPLES AND STRATEGIES 10 Ministry/ Energy FOR ELECTRIC POWER INDUSTRY Availability Yes DEVELOPMENT IN THE REPUBLIC OF Department KAZAKHSTAN Local languages Yes Section 4. “TRANSPARENT TARIFF” CIVIL РУССКИЙ INITIATIVE: CONTENT AND WAYS OF The requirement to consult the Agency No IMPLEMENTATION on planning

BASIC QUESTIONNAIRE ON INDICATORS Effective Evaluation mechanism of the No functioning of the executive authorities’ responses ENGLISH RP separate agency SUMMARY TABLE of selected indicators of Low 1 “Electricity Governance Initiative” program 12 on planning/ Information research by the No on policy Authorities SUMMARY TABLE Indicators on the “Political Process” of Management of the Electricity Power development Sector in Kazakhstan Transparency in functioning No TABLE OF INDICATORS on “Political Process” of the Electricity Power Sector Management in Consultation procedures No Kazakhstan Duration of debate Yes SUMMARY TABLE indicators on “Regulatory Process” of electricity sector management of Kazakhstan Presence of members Yes Table of evaluation of “Regulatory Process” Quality of legal RP Speakers Yes “Average indicators of the electricity sector governance in debate on the 4 14 to High” Kazakhstan electricity Law Availability of minutes No SUMMARY TABLE of indicators on the evaluation of ecological and social aspects of the Kazakhstan’s electrical power sector management Clarity of substantial grounds for No decision-making TABLE OF INDICATORS on the evaluation of ecological and social aspects of Kazakhstan’s electricity sector management Quality of media Volume consecrated Yes coverage of the FILLED PROJECT INDICATORS RP policy and reforms Quality of coverage Yes “Average” 3 15 REGULATORY PROCESS INDICATORS in the electricity sector Balance of coverage Yes

66 TABLE OF CONTENT Amount of participation No Section 1. HISTORY AND CURRENT STATUS OF ELECTRIC POWER INDUSTRY Effectiveness ҚАЗАҚША Breadth of participation No Section 2. DEVELOPMENT OBJECTIVES RP of the public “High” 5 Section 3. MAIN PRINCIPLES AND STRATEGIES 18 participation FOR ELECTRIC POWER INDUSTRY Results of public participation No DEVELOPMENT IN THE REPUBLIC OF process KAZAKHSTAN Response to public participation No Section 4. “TRANSPARENT TARIFF” CIVIL РУССКИЙ INITIATIVE: CONTENT AND WAYS OF Legislative authorization No IMPLEMENTATION Public consultations during the No BASIC QUESTIONNAIRE ON INDICATORS development of the policy ENGLISH Transparent Competitive bidding Yes SUMMARY TABLE of selected indicators of formulation “Electricity Governance Initiative” program RP of policy in “Average An adequate analysis of the demand Yes 4 SUMMARY TABLE Indicators on the “Political 21 the sphere of to High” Process” of Management of the Electricity Power independent Disclosure of EIT No Sector in Kazakhstan power producers TABLE OF INDICATORS on “Political Process” of the Electricity Power Sector Management in An analysis of the financial impact No Kazakhstan Appropriate public consultations prior No SUMMARY TABLE indicators on “Regulatory Process” of electricity sector management of to approval of projects Kazakhstan Transparency of political positions Yes Table of evaluation of “Regulatory Process” indicators of the electricity sector governance in Transparency Kazakhstan of donor’s Transparency of conditions Yes RP involvement SUMMARY TABLE of indicators on the evaluation “Average” 3 of ecological and social aspects of the 23 through loans Transparency of usage of the loan No Kazakhstan’s electrical power sector management granted for political reasons Transparency of the evaluation TABLE OF INDICATORS on the evaluation of No ecological and social aspects of Kazakhstan’s mechanisms electricity sector management Transparency of the detailed data on No FILLED PROJECT INDICATORS Transparency technical assistance of donor’s REGULATORY PROCESS INDICATORS RP “Not involvement 0 24 Transparency of results No available” through technical assistance Wide circulation of activities No

67 TABLE OF CONTENT Competitive bidding No Section 1. HISTORY AND CURRENT STATUS OF ELECTRIC POWER INDUSTRY Accountable ҚАЗАҚША Section 2. DEVELOPMENT OBJECTIVES Disclosure of information on contracts No implementation for electricity supply Section 3. MAIN PRINCIPLES AND STRATEGIES of the policy/ FOR ELECTRIC POWER INDUSTRY RP “Low to DEVELOPMENT IN THE REPUBLIC OF legislation on An appropriate analysis of the demand Yes 2 KAZAKHSTAN 25 Average” Independent Section 4. “TRANSPARENT TARIFF” CIVIL РУССКИЙ INITIATIVE: Power Producers An analysis of the financial impact No CONTENT AND WAYS OF (IPP) IMPLEMENTATION Appropriate public consultations prior No to project approval BASIC QUESTIONNAIRE ON INDICATORS Transparency of the applications for No ENGLISH SUMMARY TABLE of selected indicators of proposals “Electricity Governance Initiative” program Transparent Information provided by participants No SUMMARY TABLE Indicators on the “Political RP selection of on the bidding is open for the public “Low to Process” of Management of the Electricity Power 2 Sector in Kazakhstan 26 service suppliers Average” in private sector Transparency in the selection criteria No TABLE OF INDICATORS on “Political Process” of the Electricity Power Sector Management in and in the process Kazakhstan Rationale for the decision taken No SUMMARY TABLE indicators on “Regulatory Process” of electricity sector management of Kazakhstan Disclosure and rationale of the Yes Table of evaluation of “Regulatory Process” methodology indicators of the electricity sector governance in Transparency Kazakhstan of the assets Explanation of implementation of Yes RP “Average valuation methods 4 SUMMARY TABLE of indicators on the evaluation 27 to High” of ecological and social aspects of the / balance Kazakhstan’s electrical power sector management restructuring Independent surveillance Yes TABLE OF INDICATORS on the evaluation of ecological and social aspects of Kazakhstan’s Review of public disclosure No electricity sector management FILLED PROJECT INDICATORS Criteria transparency No Transparency and REGULATORY PROCESS INDICATORS accountability Explanation for the decisions on No RP in the allocation “Low to 2 28 development and Average” implementation of Monitoring and reporting No subsidies Rating No

68 TABLE OF CONTENT Conformity of the Qualitative Rating and Grades: Section 1. HISTORY AND CURRENT STATUS OF ELECTRIC POWER INDUSTRY Qualitative Rating Grade ҚАЗАҚША Section 2. DEVELOPMENT OBJECTIVES Section 3. MAIN PRINCIPLES AND STRATEGIES “The valuation is not applicable” 0 FOR ELECTRIC POWER INDUSTRY DEVELOPMENT IN THE REPUBLIC OF KAZAKHSTAN “Low” 1

Section 4. “TRANSPARENT TARIFF” CIVIL РУССКИЙ INITIATIVE: “Low to Average” 2 CONTENT AND WAYS OF IMPLEMENTATION “Average” 3

BASIC QUESTIONNAIRE ON INDICATORS “Average to High” 4 ENGLISH

SUMMARY TABLE of selected indicators of “High” 5 “Electricity Governance Initiative” program SUMMARY TABLE Indicators on the “Political Process” of Management of the Electricity Power Sector in Kazakhstan TABLE OF INDICATORS on “Political Process” of the Electricity Power Sector Management in Kazakhstan SUMMARY TABLE indicators on “Regulatory Process” of electricity sector management of Kazakhstan Table of evaluation of “Regulatory Process” indicators of the electricity sector governance in Kazakhstan SUMMARY TABLE of indicators on the evaluation of ecological and social aspects of the Kazakhstan’s electrical power sector management TABLE OF INDICATORS on the evaluation of ecological and social aspects of Kazakhstan’s electricity sector management FILLED PROJECT INDICATORS REGULATORY PROCESS INDICATORS

69 TABLE OF CONTENT SUMMARY TABLE Section 1. HISTORY AND CURRENT STATUS OF ELECTRIC POWER INDUSTRY indicators on “Regulatory Process” of electricity sector management of Kazakhstan ҚАЗАҚША Section 2. DEVELOPMENT OBJECTIVES Section 3. MAIN PRINCIPLES AND STRATEGIES General explanation: The regulating process is defined as an executive process on the implementation of current FOR ELECTRIC POWER INDUSTRY DEVELOPMENT IN THE REPUBLIC OF legislation and considers terms and work procedure of the executives on determination of rates, licensing of KAZAKHSTAN operation of the electricity sector facilities, resolution of disputes, as well as control over adherence to standards

Section 4. “TRANSPARENT TARIFF” CIVIL and requirements for quality of electric power. A regulatory institution aimed at ensuring uniform execution of РУССКИЙ INITIATIVE: CONTENT AND WAYS OF principles on policy enacted for the sphere of electric power in the Republic of Kazakhstan and which is the subject IMPLEMENTATION of this research, is determined by a Resolution of the Government of the Republic of Kazakhstan dated 12 October, 2007, that approves the “Statute of the Agency of the Republic of Kazakhstan on Natural Monopolies Regulation”. BASIC QUESTIONNAIRE ON INDICATORS The anti-monopoly regulation executed by the Agency includes a whole variety of economic, administrative and legislative measures taken by the State. ENGLISH

SUMMARY TABLE of selected indicators of In order to research the regulations in the electricity sector, the project partners have selected 28 indicators from “Electricity Governance Initiative” program among 32 indicators of the “Electricity Supply Governance Initiative” (RP1-RP3, RP6, RP8, RP9, RP11-RP32) and 12 SUMMARY TABLE Indicators on the “Political of them consider a potential of a regulatory institution in social and environmental issues. Process” of Management of the Electricity Power The initial analysis has found that an average valuation of the electricity sector governance in Kazakhstan on the Sector in Kazakhstan “Regulatory Process” is close to the “Average to High” level (3.875 points). TABLE OF INDICATORS on “Political Process” of the Electricity Power Sector Management in Indicators on the regulating process allow the evaluation of the following: Kazakhstan • The institutional structure, independence, potential and authority of the regulating institution; SUMMARY TABLE indicators on “Regulatory Process” of electricity sector management of • Availability, condition and analysis of decision making procedure of the regulatory institution; Kazakhstan • A practical and situational analysis of regulatory institution’s activities; Table of evaluation of “Regulatory Process” indicators of the electricity sector governance in • Participation, potential, the level, the degree of involvement, procedures and rules for participation of the Kazakhstan general public, organizations of the civil society and expert community in the process of regulation; SUMMARY TABLE of indicators on the evaluation • Public availability of documents and information on activities of a regulatory institution; of ecological and social aspects of the Kazakhstan’s electrical power sector management • The procedure and principles of pricing in the electricity sector, their clarity for the people; TABLE OF INDICATORS on the evaluation of • Availability of reports on working with licence holders and principles of criteria for consideration/ ecological and social aspects of Kazakhstan’s electricity sector management cancellation/suspension of licences and for dispute resolutions; FILLED PROJECT INDICATORS REGULATORY PROCESS INDICATORS

70 TABLE OF CONTENT TABLE. EXAMPLE OF HOW TO FILL AN INDICATOR Section 1. HISTORY AND CURRENT STATUS OF ELECTRIC POWER INDUSTRY RP 1 INSTITUTIONAL STRUCTURE FOR REGULATORY DECISIONS ҚАЗАҚША Section 2. DEVELOPMENT OBJECTIVES Section 3. MAIN PRINCIPLES AND STRATEGIES Elements of quality Index Explanation FOR ELECTRIC POWER INDUSTRY DEVELOPMENT IN THE REPUBLIC OF KAZAKHSTAN Not applicable / Not rated Section 4. “TRANSPARENT TARIFF” CIVIL РУССКИЙ INITIATIVE: CONTENT AND WAYS OF Regulatory decisions are no In accordance with the “Statute of Agency of the Republic of IMPLEMENTATION made by means of an ordinary Kazakhstan on Natural Monopolies Regulation” approved by executive process of decision Resolution of the Government of the Republic of Kazakhstan BASIC QUESTIONNAIRE ON INDICATORS made within the scope of the dated 12 October, 2007, Art.1, Clause 7, the Agency shall make Ministry. decisions on matters within its competence in compliance ENGLISH with the procedure approved by the legislation of the Repub- SUMMARY TABLE of selected indicators of “Electricity Governance Initiative” program lic of Kazakhstan; the decisions are formalized by decrees of the Chairman of the Agency and by other acts provided for by SUMMARY TABLE Indicators on the “Political Process” of Management of the Electricity Power the legislation of the Republic of Kazakhstan. In accordance Sector in Kazakhstan with Art. 23, the collegial institution of management of the Agency is a Board consisting of seven persons. A Chairman of TABLE OF INDICATORS on “Political Process” of the Electricity Power Sector Management in the Agency shall head the Agency Board. The Agency Board Kazakhstan includes the Chairman of the Agency, his deputies and repre- SUMMARY TABLE indicators on “Regulatory sentatives of the Government of the Republic of Kazakhstan. Process” of electricity sector management of The Board of the Agency can consider any issues within the Kazakhstan competency of the Agency and make decisions on them, ex- Table of evaluation of “Regulatory Process” cept for matters under the competency of the Executive Sec- indicators of the electricity sector governance in Kazakhstan retary. Decisions taken during a meeting of the Board shall be recorded in the Minutes of the Board of the Agency and are SUMMARY TABLE of indicators on the evaluation the basis for making decisions by the Chairman of the Agency. of ecological and social aspects of the Kazakhstan’s electrical power sector management Subject to the Article 12 of the “Law on Natural Monopolies” of the Republic of Kazakhstan, status, structure and total staff TABLE OF INDICATORS on the evaluation of ecological and social aspects of Kazakhstan’s of an authorized institution shall be specified by the Govern- electricity sector management ment of the Republic of Kazakhstan. FILLED PROJECT INDICATORS REGULATORY PROCESS INDICATORS

71 TABLE OF CONTENT The majority of regulatory yes The Department on Electric Power and Thermal Power Indus- Section 1. HISTORY AND CURRENT STATUS OF ELECTRIC POWER INDUSTRY decisions are made by means of try Regulation operates within the structure of the Agency of an ordinary executive process ҚАЗАҚША Section 2. DEVELOPMENT OBJECTIVES the Republic of Kazakhstan on Regulation of Natural Monop- of decision making within the olies. Section 3. MAIN PRINCIPLES AND STRATEGIES FOR ELECTRIC POWER INDUSTRY scope of the Ministry. However, DEVELOPMENT IN THE REPUBLIC OF there is an individual department KAZAKHSTAN responsible for certain decisions Section 4. “TRANSPARENT TARIFF” CIVIL РУССКИЙ INITIATIVE: (for example, revision of rates CONTENT AND WAYS OF or licensing) and there are IMPLEMENTATION individual units or groups with their specific responsibilities in BASIC QUESTIONNAIRE ON INDICATORS the Ministry. ENGLISH

An independent individual yes The Resolution of the Government of the Republic of Kazakh- SUMMARY TABLE of selected indicators of “Electricity Governance Initiative” program institution is responsible for stan dated 12 October, 2007 approved the “Matters in the scope making decisions on regulation of the Natural Monopolies Regulation Agency of the Republic SUMMARY TABLE Indicators on the “Political Process” of Management of the Electricity Power and supervision. of Kazakhstan”. This Resolution approved the “Regulation of Sector in Kazakhstan the Natural Monopolies Regulation Agency of the Republic of Kazakhstan”. TABLE OF INDICATORS on “Political Process” of the Electricity Power Sector Management in The anti-monopoly regulation executed by the Agency in- Kazakhstan cludes a whole complex of economic, administrative and leg- SUMMARY TABLE indicators on “Regulatory islative measures taken by the Government. Process” of electricity sector management of Kazakhstan DETAILED EXPLANATION: In 2003, the anti-monopoly policy of the Republic of Kazakhstan was assigned to the Table of evaluation of “Regulatory Process” Natural Monopolies Regulation and Competition Protection Agency of the Republic of Kazakhstan that was di- indicators of the electricity sector governance in rectly subordinated and answerable to the President of the Republic. Therefore, when exercising its power, the Kazakhstan Agency was legally independent from the Government and Parliament of the country. In 2004, as a result of the SUMMARY TABLE of indicators on the evaluation management reform, by decision of the Head of the State a Business Competition Protection Committee was of ecological and social aspects of the Kazakhstan’s electrical power sector management established within the Ministry of Industry and Trade of the Republic of Kazakhstan and the Natural Monopo- lies Regulation Agency of the Republic of Kazakhstan. Subdivision of the anti-monopoly institutions concret- TABLE OF INDICATORS on the evaluation of ized their functions and authorities. In 2007, the following technical matters of the regulation were transferred ecological and social aspects of Kazakhstan’s electricity sector management from the Ministry of Energy and Mineral Resources and the Ministry of Transport and Communications to the infrastructural regulator: licensing, determination of technical specifications of the non-discriminatory access, FILLED PROJECT INDICATORS issues of standardization and approval of investment programs. The state regulation of rates of monopolistic REGULATORY PROCESS INDICATORS sectors of the economy, except for communications services, is concentrated in the Natural Monopolies Regu- lation Agency of the Republic of Kazakhstan.

72 TABLE OF CONTENT Section 1. HISTORY AND CURRENT STATUS OF VALUATION RANGE ELECTRIC POWER INDUSTRY ҚАЗАҚША Section 2. DEVELOPMENT OBJECTIVES The valuation is not applicable/Not rated Section 3. MAIN PRINCIPLES AND STRATEGIES FOR ELECTRIC POWER INDUSTRY DEVELOPMENT IN THE REPUBLIC OF The reporting or activity corresponds to none of the quality elements Low KAZAKHSTAN

Section 4. “TRANSPARENT TARIFF” CIVIL The reporting or activity corresponds to one quality element Low to Average РУССКИЙ INITIATIVE: CONTENT AND WAYS OF IMPLEMENTATION The reporting or activity corresponds to two quality elements Average

BASIC QUESTIONNAIRE ON INDICATORS The reporting or activity corresponds to three quality elements Average to High ENGLISH The reporting or activity corresponds to all quality elements High SUMMARY TABLE of selected indicators of “Electricity Governance Initiative” program Name of the researcher and name of the organization: A.A. Kurmanbaeva, the “Committee on Public Control SUMMARY TABLE Indicators on the “Political over Execution of State Programmes at Local Level” Process” of Management of the Electricity Power Sector in Kazakhstan Information Source: the official website of ARNM, the structure of the Agency’s CA and data about managers of the Departments http://www.arem.gov.kz/ru/103/#!prettyPhoto ; the official site of ARNM, Statute the Agency TABLE OF INDICATORS on “Political Process” of the Electricity Power Sector Management in http://www.arem.gov.kz/ru/101/; the official site of ARNM, the history of development of the Agency http:// Kazakhstan www.arem.gov.kz/ru/3/. SUMMARY TABLE indicators on “Regulatory Process” of electricity sector management of Kazakhstan Table of evaluation of “Regulatory Process” indicators of the electricity sector governance in Kazakhstan SUMMARY TABLE of indicators on the evaluation of ecological and social aspects of the Kazakhstan’s electrical power sector management TABLE OF INDICATORS on the evaluation of ecological and social aspects of Kazakhstan’s electricity sector management FILLED PROJECT INDICATORS REGULATORY PROCESS INDICATORS

73 TABLE OF CONTENT Table of evaluation of “Regulatory Process” indicators of the electricity sector governance in Section 1. HISTORY AND CURRENT STATUS OF Kazakhstan ELECTRIC POWER INDUSTRY ҚАЗАҚША Section 2. DEVELOPMENT OBJECTIVES Regulatory process Section 3. MAIN PRINCIPLES AND STRATEGIES FOR ELECTRIC POWER INDUSTRY No. Name Quality Elements Index Valua- DEVELOPMENT IN THE REPUBLIC OF Score KAZAKHSTAN tion

Section 4. “TRANSPARENT TARIFF” CIVIL РУССКИЙ By means of executive processes of INITIATIVE: no CONTENT AND WAYS OF decision making IMPLEMENTATION An institutional Average RP 1 structure for By means of executive processes 4 yes to High BASIC QUESTIONNAIRE ON INDICATORS regulatory decisions within the scope of the Ministry ENGLISH An independent regulatory institution yes SUMMARY TABLE of selected indicators of “Electricity Governance Initiative” program Information and confirmation yes SUMMARY TABLE Indicators on the “Political Process” of Management of the Electricity Power Investigation yes Sector in Kazakhstan Authorities of the RP 2 Submission yes High 5 TABLE OF INDICATORS on “Political Process” regulating institution of the Electricity Power Sector Management in Penalties for violating orders yes Kazakhstan SUMMARY TABLE indicators on “Regulatory Execution of authorities yes Process” of electricity sector management of Kazakhstan Functions are clearly determined in the current laws, resolutions or yes Table of evaluation of “Regulatory Process” Jurisdiction of the Average indicators of the electricity sector governance in RP 3 decrees 4 Kazakhstan regulatory institution to High The range of functions assigned to a yes SUMMARY TABLE of indicators on the evaluation regulatory institution of ecological and social aspects of the Kazakhstan’s electrical power sector management Independence of the process of se- no TABLE OF INDICATORS on the evaluation of lection ecological and social aspects of Kazakhstan’s electricity sector management The process is clearly determined yes FILLED PROJECT INDICATORS Selection of employ- Clarity of information on the no Average RP 6 ees of the regulatory 4 REGULATORY PROCESS INDICATORS candidates to High institution Criteria for the personnel and yes acceptability of the criteria

Different office periods yes

74 TABLE OF CONTENT Stipulated office periods yes Section 1. HISTORY AND CURRENT STATUS OF ELECTRIC POWER INDUSTRY Autonomy of the Financial autonomy no Low to ҚАЗАҚША Section 2. DEVELOPMENT OBJECTIVES RP 8 2 regulatory institution Average Section 3. MAIN PRINCIPLES AND STRATEGIES Freedom of action in selection of FOR ELECTRIC POWER INDUSTRY no DEVELOPMENT IN THE REPUBLIC OF personnel KAZAKHSTAN

Section 4. “TRANSPARENT TARIFF” CIVIL Any concerned party may appeal a РУССКИЙ INITIATIVE: yes CONTENT AND WAYS OF decision IMPLEMENTATION Appeal mechanism. An appeal may be lodged on a yes BASIC QUESTIONNAIRE ON INDICATORS General public procedural basis

RP 9 application on High 5 ENGLISH specific decisions An appeal may be lodged on a yes SUMMARY TABLE of selected indicators of mechanism. substantive basis “Electricity Governance Initiative” program The appeal mechanism influences on SUMMARY TABLE Indicators on the “Political yes Process” of Management of the Electricity Power decisions, at least in one case Sector in Kazakhstan TABLE OF INDICATORS on “Political Process” Training of members Certainty yes of the Electricity Power Sector Management in RP and employees Kazakhstan Training on multiple issues yes High 5 11 of the regulating SUMMARY TABLE indicators on “Regulatory institution Process” of electricity sector management of Diversity yes Kazakhstan Table of evaluation of “Regulatory Process” Clarity of regulating Procedural certainty yes RP procedures and indicators of the electricity sector governance in Average 3 Kazakhstan 15 essential reasons for Clarity of essential reasons for yes decisions taken SUMMARY TABLE of indicators on the evaluation decisions of ecological and social aspects of the Kazakhstan’s electrical power sector management Independently initiated matters no Preventive initiatives (Suo-motu petitions) TABLE OF INDICATORS on the evaluation of RP Low to of the regulating 2 ecological and social aspects of Kazakhstan’s 17 Average electricity sector management institution Detailed discussions, research and yes FILLED PROJECT INDICATORS conferences REGULATORY PROCESS INDICATORS An assumption that documents are yes available for the public if they are Availability of docu- RP not specified to be confidential ments held by the Average 3 18 regulating institution Clear procedures and rules for yes determining “confidentiality”

75 TABLE OF CONTENT Decrees and A legal requirement for decrees to yes Section 1. HISTORY AND CURRENT STATUS OF ELECTRIC POWER INDUSTRY RP decisions of include explanations /reason Average 4 ҚАЗАҚША Section 2. DEVELOPMENT OBJECTIVES 26 the regulating to High institution Quality of reasons in practice yes Section 3. MAIN PRINCIPLES AND STRATEGIES FOR ELECTRIC POWER INDUSTRY DEVELOPMENT IN THE REPUBLIC OF Easy availability no KAZAKHSTAN

Section 4. “TRANSPARENT TARIFF” CIVIL РУССКИЙ INITIATIVE: Timely availability yes CONTENT AND WAYS OF IMPLEMENTATION Local language yes RP Dissemination of Average 4 27 decisions to High BASIC QUESTIONNAIRE ON INDICATORS Use of different ways of yes dissemination ENGLISH SUMMARY TABLE of selected indicators of Assistance in comprehension of “Electricity Governance Initiative” program no decrees SUMMARY TABLE Indicators on the “Political Process” of Management of the Electricity Power Sector in Kazakhstan Detailed analysis no TABLE OF INDICATORS on “Political Process” of the Electricity Power Sector Management in Mitigation of serious influence yes RP Average Kazakhstan Pricing philosophy 4 28 Good clarity yes to High SUMMARY TABLE indicators on “Regulatory Process” of electricity sector management of Kazakhstan Last rates reflect the philosophy/ yes Table of evaluation of “Regulatory Process” principles indicators of the electricity sector governance in Kazakhstan A well-defined procedure for SUMMARY TABLE of indicators on the evaluation considering the application for a yes of ecological and social aspects of the licence Kazakhstan’s electrical power sector management Well-defined criteria for considering TABLE OF INDICATORS on the evaluation of yes ecological and social aspects of Kazakhstan’s the application for a licence electricity sector management RP Licensing High 5 30 Clarity of reason for the change/ FILLED PROJECT INDICATORS yes cancellation/suspension of a licence REGULATORY PROCESS INDICATORS Dispute resolution yes

Conformity and monitoring of yes execution

76 TABLE OF CONTENT A mandatory requirement for yes Section 1. HISTORY AND CURRENT STATUS OF ELECTRIC POWER INDUSTRY submission ҚАЗАҚША Section 2. DEVELOPMENT OBJECTIVES Easy availability no Section 3. MAIN PRINCIPLES AND STRATEGIES FOR ELECTRIC POWER INDUSTRY Recurrent reporting DEVELOPMENT IN THE REPUBLIC OF RP on work with holders Timely availability no KAZAKHSTAN Average 3 31 of licenses and with Section 4. “TRANSPARENT TARIFF” CIVIL Availability in local languages no РУССКИЙ INITIATIVE: enterprises CONTENT AND WAYS OF Consistency and clarity of reporting yes IMPLEMENTATION parameters

BASIC QUESTIONNAIRE ON INDICATORS Cross-functional reporting yes ENGLISH Standards of consumer services and yes SUMMARY TABLE of selected indicators of “Electricity Governance Initiative” program of quality provision SUMMARY TABLE Indicators on the “Political Standards of quality of supplies are yes Process” of Management of the Electricity Power Consumer services mandatory Sector in Kazakhstan and quality of RP supplies. Rendering TABLE OF INDICATORS on “Political Process” Monitoring of execution yes High 5 of the Electricity Power Sector Management in 32 services for Kazakhstan consumers and Review of adherence to norms yes SUMMARY TABLE indicators on “Regulatory quality of services Process” of electricity sector management of Accessibility of results of the yes Kazakhstan adherence review Table of evaluation of “Regulatory Process” indicators of the electricity sector governance in Claims of consumers yes Kazakhstan Compliance of qualitative valuation and value scoring: SUMMARY TABLE of indicators on the evaluation of ecological and social aspects of the Kazakhstan’s electrical power sector management Qualitative Valuation Value scores

TABLE OF INDICATORS on the evaluation of “The valuation is not applicable” 0 ecological and social aspects of Kazakhstan’s electricity sector management “Low” 1 FILLED PROJECT INDICATORS REGULATORY PROCESS INDICATORS “Low to Average” 2

“Average” 3

“Average to High” 4

“High” 5

77 TABLE OF CONTENT SUMMARY TABLE Section 1. HISTORY AND CURRENT STATUS OF ELECTRIC POWER INDUSTRY of indicators on the evaluation of ecological and social aspects of the Kazakhstan’s electrical ҚАЗАҚША Section 2. DEVELOPMENT OBJECTIVES power sector management Section 3. MAIN PRINCIPLES AND STRATEGIES FOR ELECTRIC POWER INDUSTRY General explanation. DEVELOPMENT IN THE REPUBLIC OF KAZAKHSTAN The most significant indicators in relation to the political and regulatory processes in the sector were selected

Section 4. “TRANSPARENT TARIFF” CIVIL for carrying out an objective evaluation of ecological and social aspects of Kazakhstan’s electrical power sector РУССКИЙ INITIATIVE: CONTENT AND WAYS OF management. IMPLEMENTATION In this section, 9 indicators from amongst the available indicators, (PP8, PP19, PP29, PP31, PP32, PP33, PP34, RP12, RP16) estimate the ecological aspects and 14 indicators (PP9, PP13, PP17, PP16, RP13, RP14, RP16, RP19-RP25, BASIC QUESTIONNAIRE ON INDICATORS RP29) – the social aspects. ENGLISH Following the initial analysis the average evaluation of social responsibility level in the process of Kazakhstan’s SUMMARY TABLE of selected indicators of electrical power sector management is close to “Average” rating (2.92 points). “Electricity Governance Initiative” program SUMMARY TABLE Indicators on the “Political The average evaluation of the level of ecological aspects of Kazakhstan’s electrical power sector management Process” of Management of the Electricity Power (2.5 points) is between “Low” and “Low-average” ratings. Sector in Kazakhstan Assessment of environmental and social risks occurring during operations is essential for the functioning of any TABLE OF INDICATORS on “Political Process” enterprise under present-day conditions. It is especially essential for such large pollutants as the energy-producing of the Electricity Power Sector Management in companies of the Republic of Kazakhstan. The structure of the energy sector of the country is represented in general Kazakhstan by the heat and power enterprises operating at on cheap low grade coals and, respectively, with high emission SUMMARY TABLE indicators on “Regulatory rates of various pollutant to the environment. The low cost of coal feedstock (specified in the Program for electrical Process” of electricity sector management of Kazakhstan power industry development in the Republic of Kazakhstan for 2010 – 2014 as one of the strengths of the industry) actually is a substantial limiting factor for the renewable energy resources development regardless of the fact Table of evaluation of “Regulatory Process” that the potential for development of wind-power, solar-power and hydro-power engineering in Kazakhstan is indicators of the electricity sector governance in Kazakhstan very high. SUMMARY TABLE of indicators on the evaluation Concerning the contribution of power-generating industry to the environmental pollution it should be noted of ecological and social aspects of the that organic fuel burning is the main source of the electric power received in Kazakhstan. This type of activity Kazakhstan’s electrical power sector management is associated with considerable emission of gaseous (acid) substances and dust as well as greenhouse gases. TABLE OF INDICATORS on the evaluation of According to the Kazakhstan Electrical Power Association 86% of greenhouse gas emission in Kazakhstan is ecological and social aspects of Kazakhstan’s coming from the coal-fired stations and the relative ratio of emissions from the power generating facilities out of electricity sector management the total amount of emissions is at a level of 41-42% (data from 2007 – 2009) and remains practically constant. FILLED PROJECT INDICATORS Except for atmospheric air pollution a considerable volume of water resources (often from natural sources, REGULATORY PROCESS INDICATORS sometimes drinking quality water) are used for the power plant production needs. Ashes and slag waste also require the big areas for storage. One more feature in the description of Kazakhstan’s power image is the existence of considerable deposits of uranium ore – the country occupies second place in the world on the volume of exploitable uranium reserves and resources. Therefore, regardless of the ambiguity of opinions concerning nuclear power’s ecological compatibility, it is quite probable that electrical power production’s share by nuclear power plants’ generating capacities will be increased. In the accepted Concept for the transition of the Republic of Kazakhstan toa “green economy” nuclear 78 TABLE OF CONTENT power development stands alongside with the hydro-power, wind-power and solar-power under the common name Section 1. HISTORY AND CURRENT STATUS OF “alternative power sources”. Such “cunning” in the development of the notion “alternative energy sources” allowed ELECTRIC POWER INDUSTRY the country leaders to set a goal “To bring the share of alternative sources in the electric power production to 50% ҚАЗАҚША Section 2. DEVELOPMENT OBJECTIVES by 2050”. As a reference, the forecast in the Program for electrical power industry development of the Republic of Section 3. MAIN PRINCIPLES AND STRATEGIES Kazakhstan for 2010 – 2014 where the share of renewable energy sources usage in 2014 will be more than 1.0% FOR ELECTRIC POWER INDUSTRY DEVELOPMENT IN THE REPUBLIC OF in the total amount of the power consumption can be taken. KAZAKHSTAN In the report for the 1st quarter of 2013 the principal committee informed that due to the absence of investors Section 4. “TRANSPARENT TARIFF” CIVIL РУССКИЙ INITIATIVE: the planned construction of seven hydro-electric power plants and three wind-driven power plants is not yet CONTENT AND WAYS OF started. Thus, even the achievement of this one percent by 2014 is hardly probable. IMPLEMENTATION At the same time in the primary strategy document of the Republic of Kazakhstan for the next few decades – BASIC QUESTIONNAIRE ON INDICATORS “the Strategy “Kazakhstan-2050: new policy line of the successful state” the global energy security is among the

ten global challenges of the XXI century and the policy in the field of implementation of principally new natural ENGLISH resources management system speaks as follows: “To remain a large player in the hydrocarbon market we have SUMMARY TABLE of selected indicators of to develop the production of alternative types of energy, actively implement technologies using solar and wind “Electricity Governance Initiative” program energy. We have all the opportunities for this aim. Not less than one half of the aggregate power consumption SUMMARY TABLE Indicators on the “Political shall be accounted from alternate and renewable energy sources by 2050”. Process” of Management of the Electricity Power Sector in Kazakhstan Thus, taking into account on the one hand the delay in the power production’s development from alternative energy sources and on the other hand the implemented hard legislative measures on greenhouse gas emission’s TABLE OF INDICATORS on “Political Process” of the Electricity Power Sector Management in limitation (that will be a serious limiting factor for the accumulation of thermal power plant capacities) it is possible Kazakhstan to assume that environmental risks occurring during the nuclear power plants’ construction and operation will be SUMMARY TABLE indicators on “Regulatory added to the existing environmental problems of coal-fired thermic and power enterprises in the coming years. Process” of electricity sector management of Socially environmental problems of utility companies can become an additional point of tension. Therefore the Kazakhstan analysis of ecological and social aspects of the functioning of electrical power industry will allow for complete Table of evaluation of “Regulatory Process” evaluation of the capacity of the industry to operate within environmental and social risks in the long term, taking indicators of the electricity sector governance in Kazakhstan into account the continuous growth of public concern with environmental problems. SUMMARY TABLE of indicators on the evaluation Within this study the Kazakhstan power supply sector is analyzed under 7 ecological indicators, 5 of which cover of ecological and social aspects of the the political process and 2 cover the regulatory process. Kazakhstan’s electrical power sector management Official inquiries to the government authorities responsible for the field of environmental protection and power TABLE OF INDICATORS on the evaluation of engineering as well as inquiries to the large power generation companies (the companies of Eastern and Southern ecological and social aspects of Kazakhstan’s electricity sector management regions have been selected) and professional associations were used as the main sources for collection of information for the filling of social and economic sections of the study. FILLED PROJECT INDICATORS Almost all the respondents answered the questions asked; however there were facts within the inquiries ignoring: REGULATORY PROCESS INDICATORS • there were no answers from AES Corporation (the foreign management company owning the Ust- Kamenogorsk combined thermal power plant, Sogrinskaya combined thermal power plant and Shulbinskaya hydroelectric power station and the Ust-Kamenogorsk hydroelectric power station controlled by it); • within the terms established by the legislation the answers were not received from the power engineering and municipal services administrations (departments at regional mayoral offices and the national value cities to which the state regulation and management in the field of power engineering, heat supply,

79 TABLE OF CONTENT telecommunications, provision of amenities, municipal, water and gas services activity is aimed at local Section 1. HISTORY AND CURRENT STATUS OF level); ELECTRIC POWER INDUSTRY • at the time of the report’s preparation answers were not received from Samruk-Energo JSC . This is the ҚАЗАҚША Section 2. DEVELOPMENT OBJECTIVES holding company operating the power and coal enterprises inthe territory of the Republic of Kazakhstan Section 3. MAIN PRINCIPLES AND STRATEGIES FOR ELECTRIC POWER INDUSTRY territory. As of December 31, 2012 Samruk Energo JSC consisted of 37 organizations. DEVELOPMENT IN THE REPUBLIC OF KAZAKHSTAN

Section 4. “TRANSPARENT TARIFF” CIVIL РУССКИЙ INITIATIVE: TABLE. EXAMPLE OF HOW TO FILL OUT AN INDICATOR CONTENT AND WAYS OF IMPLEMENTATION PP 19 CONSIDERATION OF ENVIRONMENTAL PROTECTION ISSUES IN BASIC QUESTIONNAIRE ON INDICATORS LEGISLATION AND POLICY SECTOR IMPROVEMENT ENGLISH Quality Indica- Explanation SUMMARY TABLE of selected indicators of “Electricity Governance Initiative” program elements tor SUMMARY TABLE Indicators on the “Political The Yes The strategic documents on improving the economy and transition to the Process” of Management of the Electricity Power Sector in Kazakhstan consideration “Green” way of development have a separate block devoted to the power of issues in engineering sector and energy savings TABLE OF INDICATORS on “Political Process” the framework of the Electricity Power Sector Management in Kazakhstan documents SUMMARY TABLE indicators on “Regulatory Process” of electricity sector management of Inclusion of Yes There are offers on amending the legislation in connection with transition Kazakhstan policy and to Green economy laws into Table of evaluation of “Regulatory Process” indicators of the electricity sector governance in imrpovements Kazakhstan Mitigation of Yes Is included into the Concept of Republic of Kazakhstan on transition to Green SUMMARY TABLE of indicators on the evaluation of ecological and social aspects of the power sector’s economy and the industrial program «Zhasyl Damu». Kazakhstan’s electrical power sector management direct influence TABLE OF INDICATORS on the evaluation of ecological and social aspects of Kazakhstan’s Global and Yes One of the main trends of the policy in the field of environmental protection electricity sector management economic is the transition to a low-carbon economic development FILLED PROJECT INDICATORS consequences of environmental REGULATORY PROCESS INDICATORS modification

Detailed explanation: The power industry of Kazakhstan is generally represented by combined coal thermal power plants therefore this is the main source of greenhouse gas emissions. The State industry program on the environmental protection “Zhasyl Damu” for 2010-2014 specifies that the greatest contribution to the volume of carbon dioxide emissions is made by the power engineering and the same is valid for coal; at that the calculations demonstrate that the 80 TABLE OF CONTENT share of coal in the generation of emissions will increase intensively. By 2020 it will contribute 66% to the gross Section 1. HISTORY AND CURRENT STATUS OF emission volume formed from the burning of fuel. ELECTRIC POWER INDUSTRY In the Zhasyl Damu program and the Concept of transition to Green economy the organizational actions for ҚАЗАҚША Section 2. DEVELOPMENT OBJECTIVES reduction of the electrical power sector’s influence on the environment are established. The Ministry of Industry Section 3. MAIN PRINCIPLES AND STRATEGIES FOR ELECTRIC POWER INDUSTRY and New Technologies have already adopted in 1977 the Law on energy saving, in which the basic principles DEVELOPMENT IN THE REPUBLIC OF of policy in this field are set forth. According to a report on the analysis of the effectiveness of central and local KAZAKHSTAN executive bodies in the field of technological development prepared by JSC “National Agency for Technological Section 4. “TRANSPARENT TARIFF” CIVIL РУССКИЙ INITIATIVE: Development” in 2012 it is stated that in all the investigated policy documents and strategic plans of ministries CONTENT AND WAYS OF and departments an emphasis on the innovation and resource -saving technologies are present. IMPLEMENTATION RATING SELECTION BASIC QUESTIONNAIRE ON INDICATORS The rating is not applicable / Not rated ENGLISH

SUMMARY TABLE of selected indicators of “Electricity Governance Initiative” program Environment impact consideration does not correspond to the qualitative elements Low

SUMMARY TABLE Indicators on the “Political Environment impact consideration corresponds to one qualitative element Low-to-average Process” of Management of the Electricity Power Sector in Kazakhstan Environment impact consideration corresponds to two qualitative elements Average TABLE OF INDICATORS on “Political Process” of the Electricity Power Sector Management in Kazakhstan Environment impact consideration corresponds to three qualitative elements Medium-to-high

SUMMARY TABLE indicators on “Regulatory Environment impact consideration corresponds to four qualitative elements and more High Process” of electricity sector management of Kazakhstan Name of the researcher and organization: Table of evaluation of “Regulatory Process” indicators of the electricity sector governance in Vadim Litvinov, expert on Social Fund “Ekology-Youth-Initiative-Development”, Kazakhstan member of National Association and Non-Governmental Organization “Transparent tariff” SUMMARY TABLE of indicators on the evaluation of ecological and social aspects of the Source of information: The state program on the forced industrial and innovative development of the Republic Kazakhstan’s electrical power sector management of Kazakhstan for 2010-2014 dd. March 19, 2010, No. 958; the Industry program “Zhasyl Damu” for 2010-2014; TABLE OF INDICATORS on the evaluation of the Strategic plan of the Ministry of Environmental Protection of the Republic of Kazakhstan for 2011-2015; the ecological and social aspects of Kazakhstan’s Regions Development Program approved by the resolution of the government of the Republic of Kazakhstan dd. electricity sector management July 26, 2011 No. 862; the Program “Business Road Map 2020” approved by the resolution of the government of FILLED PROJECT INDICATORS the Republic of Kazakhstan dd. April 13, 2010 No. 301; the Strategic plan of the Ministry of Industry and New REGULATORY PROCESS INDICATORS Technologies of the Republic Kazakhstan for 2010 – 2014; Program for development of nuclear industry in the Republic of Kazakhstan for 2011-2014 with development prospect till 2020; the Strategic plan of the Nuclear Power Agency of the Republic of Kazakhstan; the Strategic plan of the Agency on Construction and Municipal Housing Economy of the Republic of Kazakhstan for 2011 – 2015. Additional information: Despite the high rating under this indicator it should be noted that due to lack of public interaction and without having secured with its support even the best strategy can be not implemented because the public unwillingness to take part in the implementation of “someone else’s” plans. The analysis of other

81 TABLE OF CONTENT indicators show that this occurs quite often. Under civil society we understand it to mean a wide range of persons Section 1. HISTORY AND CURRENT STATUS OF (including the business and investment communities). ELECTRIC POWER INDUSTRY The matters of environmental protection of the Republic of Kazakhstan are regulated by the Environmental Code ҚАЗАҚША Section 2. DEVELOPMENT OBJECTIVES adopted in 2007, which is amended and revised every year as well as the other regulatory, legal acts adopted by the Section 3. MAIN PRINCIPLES AND STRATEGIES FOR ELECTRIC POWER INDUSTRY Government of the Republic of Kazakhstan. All these documents describe the legal means for the implementation DEVELOPMENT IN THE REPUBLIC OF goals established in the Constitution of the Republic of Kazakhstan – creation of an environment favorable for the KAZAKHSTAN life and health of people (article 31). Section 4. “TRANSPARENT TARIFF” CIVIL РУССКИЙ INITIATIVE: According to the administrative reforms conducted on the transfer of power from the central authorities to the CONTENT AND WAYS OF IMPLEMENTATION local ones, some issues concerning the environmental protection are found within the sphere of mayors of regions and cities of national subordination. For this the natural resources and subsoil use administrations are created at BASIC QUESTIONNAIRE ON INDICATORS at this level. According to the Environmental Code these two administrations are engaged in conducting the state

environmental examination of projects and issue permits for subsoil use to the enterprises of II-IV categories. It is ENGLISH assumed that the enterprises of these categories do not influence the environment to a great degree. For example, SUMMARY TABLE of selected indicators of CHPP of small townships can belong to category II or III and CHPP of big cities would belong to category I and all the “Electricity Governance Initiative” program approvals could be obtained at the Ministry of Environment and Water Resources of the Republic of Kazakhstan. But SUMMARY TABLE Indicators on the “Political such separation would allow for inclusion of such large enterprises as East-Kazakhstan Regional Power Engineering Process” of Management of the Electricity Power Company into the enterprises of the IV category (the least harmful in regards to environment) without taking into Sector in Kazakhstan account its complex influence and level of environmental risk. TABLE OF INDICATORS on “Political Process” of the Electricity Power Sector Management in According to the Law on the electrical power engineering, the competence of the regulatory authority on electrical Kazakhstan power engineering field does not include the functions connected with environmental protection. The only norm, SUMMARY TABLE indicators on “Regulatory which can be included into the environmental norms, mentioned in the above law is the right of the supervisory Process” of electricity sector management of body in the field of electrical power engineering to organize the development of programs, regulatory methodical Kazakhstan acts, legal and economic energy saving mechanisms. But, as you know, any right can be both exercised and Table of evaluation of “Regulatory Process” not exercised. All the issues concerning the improvement of environmental situation are in the competence of indicators of the electricity sector governance in the other authorized body – the Ministry of Environment and Water Resources. This ministry coordinates the Kazakhstan ecological sections in the projects for construction and re-construction of industrial enterprises (included the SUMMARY TABLE of indicators on the evaluation electrical power sector). The ecological part, depending on the level of design, can be called the “Environmental of ecological and social aspects of the Protection” section (EPS) or “Environment Impact Assessment” (EIA). It is the obligatory part of the design and Kazakhstan’s electrical power sector management authorization documentation, without which the financing and construction of any industrial facility is not allowed. TABLE OF INDICATORS on the evaluation of The development and coordination of EPS and EIA sections are regulated by the Environmental Code of the ecological and social aspects of Kazakhstan’s Republic of Kazakhstan. However experience has proven that despite the sufficiently detailed Rules for carrying electricity sector management out public hearings, in the majority of cases they are led formally without the civil society’s involvement into the FILLED PROJECT INDICATORS decision-making process. Actually the civil society has no opportunity to express their opinion at the stage of the REGULATORY PROCESS INDICATORS project development and selection of options (including the “zero option” when the project implementation is rejected) if any. Besides the construction and reconstruction projects, the following types of drafts developed in electrical power industry are also subject to obligatory state environmental assessment: • Drafts environmental emission standards

82 TABLE OF CONTENT • Drafts regulations of the Republic of Kazakhstan, regulatory technical documents, and instructional and Section 1. HISTORY AND CURRENT STATUS OF methodological documents, execution of which can cause a negative impact on the environment ELECTRIC POWER INDUSTRY • Drafts contracts on carrying out subsoil management operations ҚАЗАҚША Section 2. DEVELOPMENT OBJECTIVES Section 3. MAIN PRINCIPLES AND STRATEGIES • Documentation on applying technologies, equipment – except for vehicles, and equipment transferred FOR ELECTRIC POWER INDUSTRY (imported) into the Republic of Kazakhstan. DEVELOPMENT IN THE REPUBLIC OF KAZAKHSTAN Another instrument for administrative regulation of environmental issues is the system of developing drafts for Section 4. “TRANSPARENT TARIFF” CIVIL maximum permissible emissions (MPE) and maximum permissible discharge (MPD) and drafts for waste placement РУССКИЙ INITIATIVE: CONTENT AND WAYS OF standards (WPS). Based on these drafts permissions for emissions into environment are issued. The permissions are IMPLEMENTATION issued by the Ministry of Environment and Water Resources and its territorial divisions, or by the Administration of Natural Resources and Environmental Management (under the provincial Mayors offices) depending on the type BASIC QUESTIONNAIRE ON INDICATORS of enterprise and emission volume. When obtaining permissions enterprises of I and II categories are obliged to carry out public hearings of their Plans of Nature Protection Measures for validity period of the permission . ENGLISH Experience has proven that these public hearings are conducted in the same formalistic way. SUMMARY TABLE of selected indicators of “Electricity Governance Initiative” program As a whole, the Laws of the Kazakhstan Republic in the field of environmental protection to a greater extent SUMMARY TABLE Indicators on the “Political include the requirements of international conventions and agreements, to which the republic has acceded. Process” of Management of the Electricity Power However, at the level of executing the standards of these international conventions the main requirement – the Sector in Kazakhstan access to ecological information is often violated. For example, despite the fact that according to Article 31 of the TABLE OF INDICATORS on “Political Process” Constitution of RK one of the state purposes is “the healthy environmental protection”, and concealing these facts of the Electricity Power Sector Management in by officials and circumstances threatening life and health leads to responsibility according to the Law, in practice Kazakhstan there is no access to EIA, MPE, MPD and WPS projects. At the request of the authors of the current section, on the SUMMARY TABLE indicators on “Regulatory examples of placeing EIA projects within free access, the Ministry of Environment and Water Resources replied: Process” of electricity sector management of “As draft reports for EIA and EIA are intellectual property, familiarization with them is possible after receiving the Kazakhstan owner’s written consent”. And can be so notwithstanding that these documents are submitted to governmental Table of evaluation of “Regulatory Process” agencies on a mandatory basis and they contain detailed information on the suggested level of environmental indicators of the electricity sector governance in Kazakhstan impact (and therefore an impact on the health of the population surrounding the enterprise). SUMMARY TABLE of indicators on the evaluation Summary: The analysis of social and ecological aspects of electricity sector’s activity within the Republic of of ecological and social aspects of the Kazakhstan demonstrates the formalistic approach of public involvement in the dialogue, the low esteem for public Kazakhstan’s electrical power sector management opinion, the inadequate coordination between administrations, the closed nature of the ecological information in TABLE OF INDICATORS on the evaluation of which the public are really interested. For example, the amount of claims and penalties can be freely accessed; ecological and social aspects of Kazakhstan’s however, data on emissions of the enterprises, i.e. the data indicating the direct impact on health, are protected electricity sector management information. The enterprises of electrical sector don’t put any effort into interaction with the regional population. FILLED PROJECT INDICATORS It leads to social tension growth, considering the tendencies of power capacity development towards ecologically REGULATORY PROCESS INDICATORS dangerous ones (thermalpower engineering, nuclear power engineering). If this tendency continues, the growing public concern in environmental problems and the closed nature of Electrical sector will lead to a general protest against the activities of all utility companies regardless of any benefits provided by them. Recommendations: Pursuant to the results of the analysis the following recommendations are oriented towards the increase of stability of the electrical power industry’s activity in ecological aspects in Kazakhstan. • Widespread introduction of Emissions and Pollutants Transfer Registery (EPTR) and the enterprise ecological ratings are necessary. On the one hand, it will promote a increase in transparency of data on how the

83 TABLE OF CONTENT electricity sector affects the environment and population’s health, and on the other hand, it will allow Section 1. HISTORY AND CURRENT STATUS OF for stimulation of work on emissions reduction, since it gives a clear picture of the most ecologically ELECTRIC POWER INDUSTRY “polluting” enterprises. ҚАЗАҚША Section 2. DEVELOPMENT OBJECTIVES • It is obvious that it is very difficult to change the already developed system of powers distribution Section 3. MAIN PRINCIPLES AND STRATEGIES FOR ELECTRIC POWER INDUSTRY between a regulatory agency in the field of electric power industry and a regulatory agency in the field of DEVELOPMENT IN THE REPUBLIC OF environmental protection. However, the compulsory environmental training of specialists on the authorized KAZAKHSTAN agency in the field of electrical power industry will promote taking into account an ecological component during Section 4. “TRANSPARENT TARIFF” CIVIL РУССКИЙ INITIATIVE: the decision-making process. CONTENT AND WAYS OF IMPLEMENTATION • It is necessary to enable the public to take part in stages of selecting the location for electricity generation facilities and technological schemes. Thus, it is possible to find support, including support from investors, BASIC QUESTIONNAIRE ON INDICATORS for introducing alternative electrical power sources. • The previous recommendation has since provided that the various instruments of work with the public ENGLISH and public involvement, not just public hearings in the present way they are conducted, will be used. SUMMARY TABLE of selected indicators of “Electricity Governance Initiative” program Therefore, it is necessary to carry out explanatory work with electrical power industry enterprises about benefits and mechanisms of public participation. If the closed nature position is held thereafter, nothing SUMMARY TABLE Indicators on the “Political Process” of Management of the Electricity Power except counteraction (hidden or open) will be reached. Efforts put in the electrical power industry into Sector in Kazakhstan now counteracting public interests can be used much more effectively for interaction and public support. It does not require additional resources. It is only necessary to change the force vector. TABLE OF INDICATORS on “Political Process” of the Electricity Power Sector Management in • As there is no response from the regulatory state agencies at local level and from the companies managing Kazakhstan utility companies (Samruk-Energo JSC and Corporation AES) it is necessary to develop and carry out the SUMMARY TABLE indicators on “Regulatory actions oriented to increase responsibility and openness when working with local communities. Process” of electricity sector management of Kazakhstan • Kazakhstan possesses high potential for development of renewable power sources. However, this direction Table of evaluation of “Regulatory Process” can’t be developed only using administrative methods, establishing plans “from above”. Obviously, it makes indicators of the electricity sector governance in sense to create conditions for widespread use of independent alternative energy sources by consumers at Kazakhstan local level. I.e. the development and use of this direction has to be “from the particular to the general” – SUMMARY TABLE of indicators on the evaluation from the small electrical power sources of 1-2 households to the big power infrastructures of dozens of of ecological and social aspects of the megawatts. Kazakhstan’s electrical power sector management • The mechanisms stipulated in the Aarhus Convention can give big support for the decrease of social and TABLE OF INDICATORS on the evaluation of ecological tension concerning the electrical power industry. Therefore, it is necessary to receive support ecological and social aspects of Kazakhstan’s electricity sector management by interacting with the regional Aarhus centers, which can turn into dialogue platforms in searching for a cooperative way to solve the environment problems of electricity sector. FILLED PROJECT INDICATORS REGULATORY PROCESS INDICATORS

84 TABLE OF CONTENT TABLE OF INDICATORS Section 1. HISTORY AND CURRENT STATUS OF ELECTRIC POWER INDUSTRY on the evaluation of ecological and social aspects of Kazakhstan’s electricity sector management ҚАЗАҚША Section 2. DEVELOPMENT OBJECTIVES Section 3. MAIN PRINCIPLES AND STRATEGIES Indica- No Name Quality Elements Rating Grade FOR ELECTRIC POWER INDUSTRY tor DEVELOPMENT IN THE REPUBLIC OF KAZAKHSTAN

Section 4. “TRANSPARENT TARIFF” CIVIL Ecological aspects РУССКИЙ INITIATIVE: CONTENT AND WAYS OF IMPLEMENTATION Allocated financial resources Not Ability of executive Access to inspection Yes BASIC QUESTIONNAIRE ON INDICATORS PP- authorities to esti-

“Average” 3 ENGLISH 8 mate environmen- Responsible person Not tal issues SUMMARY TABLE of selected indicators of “Electricity Governance Initiative” program Increase of knowledge on the environment Not SUMMARY TABLE Indicators on the “Political Process” of Management of the Electricity Power Consideration of issues in fundamental Yes Sector in Kazakhstan documents TABLE OF INDICATORS on “Political Process” Consideration of of the Electricity Power Sector Management in Inclusion into the policy and law reforming environmental pro- Yes Kazakhstan process PP- tection issues in “High” 5 SUMMARY TABLE indicators on “Regulatory 19 the legislation and Process” of electricity sector management of Mitigation of direct influence of electricity policy reforming Yes Kazakhstan sector sector Table of evaluation of “Regulatory Process” indicators of the electricity sector governance in Global and economic consequences of en- Yes Kazakhstan vironmental impact SUMMARY TABLE of indicators on the evaluation of ecological and social aspects of the Conditions of powers and jurisdictions Yes Kazakhstan’s electrical power sector management

TABLE OF INDICATORS on the evaluation of Clear powers and Clearness of powers division Yes ecological and social aspects of Kazakhstan’s jurisdiction in pro- electricity sector management Timely disclosure of approval Not “Medi- PP- viding the eco- FILLED PROJECT INDICATORS um-to- 4 29 logical decision for Comprehensive disclosure Yes High” REGULATORY PROCESS INDICATORS electricity power projects Easy access Yes

Plain format Yes

85 TABLE OF CONTENT Indica- No Name Quality Elements Rating Grade Section 1. HISTORY AND CURRENT STATUS OF tor ELECTRIC POWER INDUSTRY ҚАЗАҚША Section 2. DEVELOPMENT OBJECTIVES Consideration of a variety of approaches Not Section 3. MAIN PRINCIPLES AND STRATEGIES FOR ELECTRIC POWER INDUSTRY DEVELOPMENT IN THE REPUBLIC OF Public participation Proof of consultations Not KAZAKHSTAN in policy develop- PP- Section 4. “TRANSPARENT TARIFF” CIVIL ment for the reduc- Systematic efforts on consultation of com- “Low” РУССКИЙ INITIATIVE: 31 Not CONTENT AND WAYS OF tion of environmen- munities mentioned above IMPLEMENTATION tal impact A variety of mechanisms for public partici- Not BASIC QUESTIONNAIRE ON INDICATORS pation ENGLISH Consideration of environmental issues Not SUMMARY TABLE of selected indicators of “Electricity Governance Initiative” program Comprehensive accounting of impact Not SUMMARY TABLE Indicators on the “Political Process” of Management of the Electricity Power Multisided mechanism of public participa- Not Sector in Kazakhstan Inclusion of consid- tion TABLE OF INDICATORS on “Political Process” eration of environ- PP- “Low – of the Electricity Power Sector Management in mental issues into Systematic efforts for receiving a contribu- 2 Kazakhstan 32 Not Average” the national plan tion from different stakeholders SUMMARY TABLE indicators on “Regulatory for electricity sector Process” of electricity sector management of Disclosure of comments Yes Kazakhstan Table of evaluation of “Regulatory Process” Explanation of the implementation of pub- indicators of the electricity sector governance in lic contribution into the final decision mak- Not Kazakhstan ing SUMMARY TABLE of indicators on the evaluation of ecological and social aspects of the Requirements for the evaluation of envi- Kazakhstan’s electrical power sector management Yes ronmental impact TABLE OF INDICATORS on the evaluation of Completeness of ecological and social aspects of Kazakhstan’s evaluation of the Recommendations for the social impact electricity sector management Yes PP- laws’ of influence evaluation “High” 5 FILLED PROJECT INDICATORS 33 on the environ- REGULATORY PROCESS INDICATORS ment, policy and Recommendations for conducting strategic Yes procedures evaluation

Executed strategic evaluation Yes

86 TABLE OF CONTENT Indica- No Name Quality Elements Rating Grade Section 1. HISTORY AND CURRENT STATUS OF tor ELECTRIC POWER INDUSTRY ҚАЗАҚША Section 2. DEVELOPMENT OBJECTIVES Public participation Public participation at Yes Section 3. MAIN PRINCIPLES AND STRATEGIES scoping FOR ELECTRIC POWER INDUSTRY DEVELOPMENT IN THE REPUBLIC OF KAZAKHSTAN Usage of more than one mechanism for Not Section 4. “TRANSPARENT TARIFF” CIVIL public participation РУССКИЙ INITIATIVE: CONTENT AND WAYS OF IMPLEMENTATION Appropriate period for comments Not Public participation PP- in the environmen- “Low – Public distribution of EIA reports Not 2 BASIC QUESTIONNAIRE ON INDICATORS 34 tal impact evalua- Average” ENGLISH tion Instructions for consultations with the pub- Yes SUMMARY TABLE of selected indicators of lic “Electricity Governance Initiative” program SUMMARY TABLE Indicators on the “Political Disclosure of public comments at EIA Not Process” of Management of the Electricity Power Sector in Kazakhstan Public comments are addressed in the final Not TABLE OF INDICATORS on “Political Process” report of EIA of the Electricity Power Sector Management in Kazakhstan Allocated financial resources Not SUMMARY TABLE indicators on “Regulatory Potential of regu- Process” of electricity sector management of latory agency in Access to inspection Not Kazakhstan РP- providing an evalu- “Low” 1 12 Table of evaluation of “Regulatory Process” ation of environ- Responsible person Not indicators of the electricity sector governance in mental issues Kazakhstan Increase of knowledge on the environment Not SUMMARY TABLE of indicators on the evaluation of ecological and social aspects of the Regulatory agency’s Providing explanations in response to Kazakhstan’s electrical power sector management Not reaction to the claims РP- “Not ap- TABLE OF INDICATORS on the evaluation of claims on social 0 16 plicable” ecological and social aspects of Kazakhstan’s and environment Applying the mandate on environmental electricity sector management Not issues and social issues FILLED PROJECT INDICATORS REGULATORY PROCESS INDICATORS

87 TABLE OF CONTENT Indica- No Name Quality Elements Rating Grade Section 1. HISTORY AND CURRENT STATUS OF tor ELECTRIC POWER INDUSTRY ҚАЗАҚША Section 2. DEVELOPMENT OBJECTIVES Social aspects Section 3. MAIN PRINCIPLES AND STRATEGIES FOR ELECTRIC POWER INDUSTRY DEVELOPMENT IN THE REPUBLIC OF Allocated financial resources Not KAZAKHSTAN

Section 4. “TRANSPARENT TARIFF” CIVIL Access to inspection Yes РУССКИЙ INITIATIVE: CONTENT AND WAYS OF Ability of executive IMPLEMENTATION Appointed responsible person Not PP-9 authorities to eval- “Average” 3 uate social issues BASIC QUESTIONNAIRE ON INDICATORS Increase of knowledge on social issues Not ENGLISH Existence of the program on the electrifica- Yes SUMMARY TABLE of selected indicators of tion of rural areas “Electricity Governance Initiative” program SUMMARY TABLE Indicators on the “Political Technical and economic analytical poten- Yes Process” of Management of the Electricity Power tial Sector in Kazakhstan TABLE OF INDICATORS on “Political Process” Active participation and strategic potential Not of the Electricity Power Sector Management in Kazakhstan CSO analysis of ecological and social con- Not SUMMARY TABLE indicators on “Regulatory sequences Potential of civil Process” of electricity sector management of PP- Kazakhstan society organiza- “Average” 3 13 Support of weaker groups and local public tions Not Table of evaluation of “Regulatory Process” links indicators of the electricity sector governance in Kazakhstan Current capacity to study Yes SUMMARY TABLE of indicators on the evaluation of ecological and social aspects of the Kazakhstan’s electrical power sector management Network creation Not TABLE OF INDICATORS on the evaluation of Large trust Not ecological and social aspects of Kazakhstan’s electricity sector management FILLED PROJECT INDICATORS REGULATORY PROCESS INDICATORS

88 TABLE OF CONTENT Indica- No Name Quality Elements Rating Grade Section 1. HISTORY AND CURRENT STATUS OF tor ELECTRIC POWER INDUSTRY ҚАЗАҚША Section 2. DEVELOPMENT OBJECTIVES Responsibility for decisions made Yes Section 3. MAIN PRINCIPLES AND STRATEGIES FOR ELECTRIC POWER INDUSTRY Accurate time frames for decision-making DEVELOPMENT IN THE REPUBLIC OF Not KAZAKHSTAN process

Section 4. “TRANSPARENT TARIFF” CIVIL РУССКИЙ INITIATIVE: Accurate time frames for making sugges- CONTENT AND WAYS OF Not IMPLEMENTATION tions Clarity of the pro- Accountability of the suggestions made Not BASIC QUESTIONNAIRE ON INDICATORS cess of public PP- 1 ENGLISH participation in “Low” 16 Documenting of consultation process Not SUMMARY TABLE of selected indicators of decision-making “Electricity Governance Initiative” program process Timely distribution of information on the SUMMARY TABLE Indicators on the “Political process Process” of Management of the Electricity Power Sector in Kazakhstan Wide spreading of information on the pro- Not TABLE OF INDICATORS on “Political Process” cess of the Electricity Power Sector Management in Kazakhstan Target distribution of information on the Yes SUMMARY TABLE indicators on “Regulatory process Process” of electricity sector management of Kazakhstan Wide availability of documentation Not Table of evaluation of “Regulatory Process” Information to the indicators of the electricity sector governance in public on the ba- Easy access Not Kazakhstan PP- sis of the political “Average” 3 17 SUMMARY TABLE of indicators on the evaluation reform and its pur- Timely availability Not of ecological and social aspects of the Kazakhstan’s electrical power sector management poses Access for stakeholders Yes TABLE OF INDICATORS on the evaluation of ecological and social aspects of Kazakhstan’s Allocated financial resources Not electricity sector management FILLED PROJECT INDICATORS Ability of regulatory Access to professional knowledge Yes РP- agency to evaluate “Average” 3 REGULATORY PROCESS INDICATORS 13 social issues Responsible person Not

Increase of knowledge on social issues Yes

89 TABLE OF CONTENT Indica- No Name Quality Elements Rating Grade Section 1. HISTORY AND CURRENT STATUS OF tor ELECTRIC POWER INDUSTRY ҚАЗАҚША Section 2. DEVELOPMENT OBJECTIVES Universal access of detailed information on Information con- Yes Section 3. MAIN PRINCIPLES AND STRATEGIES the attraction of consulting services FOR ELECTRIC POWER INDUSTRY РP- cerning the use of “High” 5 DEVELOPMENT IN THE REPUBLIC OF 14 consultants is avail- KAZAKHSTAN Universal access of the reports and recom- able to the public Yes Section 4. “TRANSPARENT TARIFF” CIVIL mendations of consultants for public РУССКИЙ INITIATIVE: CONTENT AND WAYS OF IMPLEMENTATION Well indexed database of the documents Yes

Procedure for pub- Simple, well determined procedure for in- BASIC QUESTIONNAIRE ON INDICATORS Yes РP- lic access to regula- spection / obtaining of the documents ENGLISH “High” 5 19 tory agency’s docu- SUMMARY TABLE of selected indicators of ments Reasonable cost Yes “Electricity Governance Initiative” program SUMMARY TABLE Indicators on the “Political Wide spreading of information Yes Process” of Management of the Electricity Power Sector in Kazakhstan Any stakeholder or affected party or person TABLE OF INDICATORS on “Political Process” has the right to participate in hearings of Yes of the Electricity Power Sector Management in the regulatory agency. Kazakhstan Place for public SUMMARY TABLE indicators on “Regulatory РP- They have the right to make statements, participation in the “Average” 3 Process” of electricity sector management of 20 that become part of the minutes of regula- Not Kazakhstan regulation process tory agency’s hearings Table of evaluation of “Regulatory Process” indicators of the electricity sector governance in Preliminary announcement of open hear- Kazakhstan Yes ings of the regulatory agency. SUMMARY TABLE of indicators on the evaluation of ecological and social aspects of the Kazakhstan’s electrical power sector management Public has access to The number public requests for documents Not РP- the regulatory doc- “Low- Av- 2 TABLE OF INDICATORS on the evaluation of 21 uments and hear- erage” ecological and social aspects of Kazakhstan’s Participation in public hearings Yes electricity sector management ings

FILLED PROJECT INDICATORS Representatives of consumers Not REGULATORY PROCESS INDICATORS Institutional mech- Delegations on behalf of weaker groups Not anisms for repre- РP- “Low- Av- sentation of the 2 22 Government representation Yes erage” interests of weaker groups Representation of the executive branch for Not social development

90 TABLE OF CONTENT Indica- No Name Quality Elements Rating Grade Section 1. HISTORY AND CURRENT STATUS OF tor ELECTRIC POWER INDUSTRY ҚАЗАҚША Section 2. DEVELOPMENT OBJECTIVES Building capac- Information is aimed at parties which are Not Section 3. MAIN PRINCIPLES AND STRATEGIES ity for the weaker the least involved in the process FOR ELECTRIC POWER INDUSTRY DEVELOPMENT IN THE REPUBLIC OF parties involved KAZAKHSTAN for participation in Section 4. “TRANSPARENT TARIFF” CIVIL РP- regulatory process. РУССКИЙ INITIATIVE: “Low” 1 CONTENT AND WAYS OF 23 Information is Support of weaker involved parties for IMPLEMENTATION Not aimed at the par- their independent representation ties which are least BASIC QUESTIONNAIRE ON INDICATORS

involved in the the ENGLISH process SUMMARY TABLE of selected indicators of “Electricity Governance Initiative” program The number of involved organizations of Yes civil society SUMMARY TABLE Indicators on the “Political Interference of civil РP- Process” of Management of the Electricity Power society into the “Low” 2 Sector in Kazakhstan 24 Nature of submitted files Not regulatory process TABLE OF INDICATORS on “Political Process” of the Electricity Power Sector Management in The number of submitted files Not Kazakhstan SUMMARY TABLE indicators on “Regulatory Appointed department Yes Process” of electricity sector management of Kazakhstan Obligations of community are directed by Obligation of the Not corporate policy Table of evaluation of “Regulatory Process” power supplier with indicators of the electricity sector governance in РP- the civil society Kazakhstan Creation and operation of consulting “Average” 3 25 organizations and Not groups SUMMARY TABLE of indicators on the evaluation potentially affected of ecological and social aspects of the population Kazakhstan’s electrical power sector management Support of weaker groups Not TABLE OF INDICATORS on the evaluation of ecological and social aspects of Kazakhstan’s Information on how groups can complain Yes electricity sector management Attention to the adequacy issue in the tariff FILLED PROJECT INDICATORS Yes Participation in principles REGULATORY PROCESS INDICATORS decision-making РP- process concern- Public participation in revisions Yes “High” 5 29 ing the adequacy of electricity prices Education of groups with low level of in- Yes come

91 TABLE OF CONTENT Correspondence of the Qualitative Rating and Grade: Section 1. HISTORY AND CURRENT STATUS OF ELECTRIC POWER INDUSTRY Qualitative Rating Grade ҚАЗАҚША Section 2. DEVELOPMENT OBJECTIVES Section 3. MAIN PRINCIPLES AND STRATEGIES “Not applicable” 0 FOR ELECTRIC POWER INDUSTRY DEVELOPMENT IN THE REPUBLIC OF KAZAKHSTAN “Low” 1

Section 4. “TRANSPARENT TARIFF” CIVIL РУССКИЙ INITIATIVE: “Low-Average” 2 CONTENT AND WAYS OF IMPLEMENTATION “Average” 3

BASIC QUESTIONNAIRE ON INDICATORS “Medium-to-High” 4 ENGLISH

92 TABLE OF CONTENT FILLED PROJECT INDICATORS Section 1. HISTORY AND CURRENT STATUS OF ELECTRIC POWER INDUSTRY RP 1 CAPABILITIES OF LEGISLATIVE COMMITTEE ҚАЗАҚША Section 2. DEVELOPMENT OBJECTIVES Section 3. MAIN PRINCIPLES AND STRATEGIES Quality Ele- Indica- FOR ELECTRIC POWER INDUSTRY Explanation DEVELOPMENT IN THE REPUBLIC OF ments tor KAZAKHSTAN

Section 4. “TRANSPARENT TARIFF” CIVIL According to Article 29 of the Law “On the Parliament of the Republic of РУССКИЙ INITIATIVE: CONTENT AND WAYS OF Kazakhstan and the Status of Its Deputies”, the deputies of Parliament have Access to knowl- IMPLEMENTATION Yes access (except for confidential specialized information) to analytical reports, edge statistics of relevant departments to study important political decisions in BASIC QUESTIONNAIRE ON INDICATORS the energy sector. ENGLISH

Parliament Deputies may occasionally (non-system approach) take part in SUMMARY TABLE of selected indicators of Knowledge im- study tours at the expense of state budget and projects of international or- “Electricity Governance Initiative” program No provement ganizations, and the deputies also hear reports during the Government Hour. SUMMARY TABLE Indicators on the “Political Process” of Management of the Electricity Power Moreover, the hardware studies are held in the Chamber of Deputies. Sector in Kazakhstan Article 38 of the Law “On the Parliament of the Republic of Kazakhstan and TABLE OF INDICATORS on “Political Process” of the Electricity Power Sector Management in the Status of Its Deputies” states that the Parliament’s activity is financed Kazakhstan from national budget resources. Funds from the National Budget are as- Financial re- No signed annually to committees of the RK Parliament, including the Senate SUMMARY TABLE indicators on “Regulatory sources Process” of electricity sector management of Committee on Economic Development and Entrepreneurship, the Chamber of Kazakhstan Deputies Committee on Economic Reform and Regional Development. These Table of evaluation of “Regulatory Process” funds may be predicted, but are out of the Committees’ control. indicators of the electricity sector governance in Kazakhstan Parliament is the supreme representative body of the Republic, which per- SUMMARY TABLE of indicators on the evaluation forms legislative functions. The Chamber Committees are working bodies of ecological and social aspects of the of the Chamber of Deputies and are created to draft the laws, to carry out Kazakhstan’s electrical power sector management preliminary review of and to prepare the issues, to give opinions on matters Authority pow- Yes submitted for consideration by the Chamber of Parliament. Deputies’ powers TABLE OF INDICATORS on the evaluation of ers ecological and social aspects of Kazakhstan’s are described in the Law “On the Parliament of the Republic of Kazakhstan electricity sector management and the Status of Its Deputies” in Article 25 “The Powers of Parliamentary FILLED PROJECT INDICATORS Deputy of the Republic” and also are covered by Article 28 “Deputy’s Right to REGULATORY PROCESS INDICATORS Prompt Reception by the Officers”.

93 TABLE OF CONTENT DETAILED EXPLANATION: The Parliament has 2 main Committees (1 Senate Committee and 1 Chamber of Section 1. HISTORY AND CURRENT STATUS OF ELECTRIC POWER INDUSTRY Deputies Committee) on the electric power industry. Senate Committee on Economic Development and Entre- ҚАЗАҚША Section 2. DEVELOPMENT OBJECTIVES preneurship includes 8 deputies. The Committee on Economic Reform and Regional Development includes 13 Chamber deputies. Access to knowledge – Article 29 “Information Support for Deputies’ Activity” of the Law Section 3. MAIN PRINCIPLES AND STRATEGIES FOR ELECTRIC POWER INDUSTRY “On the Parliament of the Republic of Kazakhstan and the Status of Its Deputies”, 1. Chamber Bureaus provide DEVELOPMENT IN THE REPUBLIC OF KAZAKHSTAN a deputy with the documents adopted by the Parliament and with officially distributed information and reference materials of the Parliament and its bodies, other state bodies and public associations. 2. State bodies and Section 4. “TRANSPARENT TARIFF” CIVIL РУССКИЙ INITIATIVE: organizations and their officers provide a deputy with consulting assistance on the issues arising in his parlia- CONTENT AND WAYS OF mentary activities. Knowledge improvement – There was no special training provided for committee members IMPLEMENTATION in the area of electricity and in other areas of the committee. Whenever possible, they take part in seminars and conferences on energy organized by different international organizations and public institutions. How- BASIC QUESTIONNAIRE ON INDICATORS

ever, this training is not systemic. Government Hours in the Chamber of Deputies are held on a regular basis. ENGLISH Since February 2012, one Government Hour (16.04.2012) concerning the issues of electric power industry has SUMMARY TABLE of selected indicators of been held. Financial resources – The budgets of Senate Committee on Economic Development and Entrepre- “Electricity Governance Initiative” program neurship, of the Committee on Economic Reform and Regional Development are included into the Parliament SUMMARY TABLE Indicators on the “Political budget; there is no separate item for the Committee in Parliament budget or no separate budget for electri- Process” of Management of the Electricity Power cal power industry provided by the RK Parliament Regulations because of there is no Committee on Electrical Sector in Kazakhstan Power in the Parliament. The financial resources are assigned for the whole Parliament and are not under the TABLE OF INDICATORS on “Political Process” Committees’ control. of the Electricity Power Sector Management in Kazakhstan Powers of authority – Article 25 “The Powers of Parliamentary Deputy of the Republic”: SUMMARY TABLE indicators on “Regulatory 1. A deputy is entitled to speak and vote on all matters considered at parliamentary sessions and meetings Process” of electricity sector management of of parliamentary bodies to which he belongs. Kazakhstan 2. A parliamentary deputy is entitled to the following: Table of evaluation of “Regulatory Process” indicators of the electricity sector governance in 1) to elect and to be elected into coordinating and working bodies of the Parliament and its Chambers; Kazakhstan 2) to put forward suggestions and comments on session agenda, on the order of consideration and the SUMMARY TABLE of indicators on the evaluation of ecological and social aspects of the essence of discussed issues; Kazakhstan’s electrical power sector management 3) to express his opinion on the candidacies for the officers elected or appointed by the Chambers of TABLE OF INDICATORS on the evaluation of Parliament, or appointed by the consent of the Chambers of Parliament; ecological and social aspects of Kazakhstan’s electricity sector management 4) to make proposals to the Chamber Bureaus concerning the issues offered for consideration at the joint and separate meetings of the Chambers of Parliament, and if his proposals fail, to put them forward FILLED PROJECT INDICATORS for consideration at the plenary meetings of the Chambers; REGULATORY PROCESS INDICATORS 5) to offer issues for consideration at the meetings of Parliament and its Chambers; 6) to offer reports or information from the officers accountable to the Chambers of Parliament for hearing parliamentary session; 7) to handle deputy’s inquiries in the manner provided by law; 8) to participate in debates, put questions to the speakers, as well as to the chairman of the meeting;

94 TABLE OF CONTENT 9) to justify his proposals in explanation of vote, to render information; Section 1. HISTORY AND CURRENT STATUS OF ELECTRIC POWER INDUSTRY 10) to make amendments to draft laws, decrees and other acts adopted by the Parliament; ҚАЗАҚША Section 2. DEVELOPMENT OBJECTIVES 11) to introduce socially important appeals from the citizens to parliamentary deputies; Section 3. MAIN PRINCIPLES AND STRATEGIES FOR ELECTRIC POWER INDUSTRY 12) to familiarize with the texts of deputies’ speeches in the shorthand records and minutes of parliamen- DEVELOPMENT IN THE REPUBLIC OF KAZAKHSTAN tary meetings;

Section 4. “TRANSPARENT TARIFF” CIVIL РУССКИЙ INITIATIVE: 13) to exercise other powers in compliance with the applicable Constitutional Law, and the regulations CONTENT AND WAYS OF adopted by the Parliament and its Chambers. IMPLEMENTATION RATING SELECTION BASIC QUESTIONNAIRE ON INDICATORS Not assessable/Not rated ENGLISH

SUMMARY TABLE of selected indicators of “Electricity Governance Initiative” program Report or activity meets none of the quality elements “Low”

SUMMARY TABLE Indicators on the “Political Report or activity meets one quality element “Low to Average” Process” of Management of the Electricity Power Sector in Kazakhstan Report or activity meets two quality elements “Average” TABLE OF INDICATORS on “Political Process” of the Electricity Power Sector Management in Kazakhstan Report or activity meets three quality elements “Average to High”

SUMMARY TABLE indicators on “Regulatory Report or activity meets all quality elements “High” Process” of electricity sector management of Kazakhstan Table of evaluation of “Regulatory Process” Name of the researcher and organization: Sara Espenova, PF “KAMEDA” indicators of the electricity sector governance in Kazakhstan Information source: http://www.parlam.kz/ru/persons-of-committee, the RK Parliament Regulations. SUMMARY TABLE of indicators on the evaluation Supplemental information: Request to the Mazhilis (Chamber of Deputies), Committee on Economic Reforms of ecological and social aspects of the and Regional Development, dated September 11, 2013, No. 27 addressed to the deputy Aimbetov S. S., Chair- Kazakhstan’s electrical power sector management man of the Committee on Economic Reform and Regional Development of the Mazhilis of the RK Parliament. TABLE OF INDICATORS on the evaluation of There’s no official response received until today, but according to the phone conversation with the Mazhilis ecological and social aspects of Kazakhstan’s electricity sector management deputy assistant Bekenov A. S., the above request is beyond the competence of this deputy. FILLED PROJECT INDICATORS REGULATORY PROCESS INDICATORS

95 TABLE OF CONTENT PP 4 Section 1. HISTORY AND CURRENT STATUS OF EFFECTIVE WORK OF LEGISLATIVE COMMITTEE ON ELECTRIC SUPPLY ELECTRIC POWER INDUSTRY ҚАЗАҚША Quality Ele- Indica- Section 2. DEVELOPMENT OBJECTIVES Explanation Section 3. MAIN PRINCIPLES AND STRATEGIES ments tor FOR ELECTRIC POWER INDUSTRY DEVELOPMENT IN THE REPUBLIC OF KAZAKHSTAN Chapter 10, p. 141 of the RK Chamber of Deputies Regulations says that a deputy may not conduct entrepreneurial activity, be a member of governing Section 4. “TRANSPARENT TARIFF” CIVIL РУССКИЙ INITIATIVE: body or supervisory board in a commercial organization. CONTENT AND WAYS OF Open interests Yes IMPLEMENTATION Also, personal pages of the deputies contain a brief biography and information about their income, which may indirectly reflect past relationships and BASIC QUESTIONNAIRE ON INDICATORS commercial interests. ENGLISH According to the information obtained from official Parliament for the period SUMMARY TABLE of selected indicators of from May 2012 to November 2013, 3 draft projects in the area of electric- “Electricity Governance Initiative” program Committee’s ac- Yes ity have been considered (Chamber of Deputies) and approved (Senate). 5 tivity SUMMARY TABLE Indicators on the “Political requests from the Chamber deputies (for 3 sessions of the Vth convocation) Process” of Management of the Electricity Power Sector in Kazakhstan and 1 request from the Senate Deputies (for the year 2013). TABLE OF INDICATORS on “Political Process” Substantiated No official response received from the Committee on Economic Reform to of the Electricity Power Sector Management in No Kazakhstan Report the request dated 11 September 2013 No. 27.

SUMMARY TABLE indicators on “Regulatory Public consulta- Since the beginning of 2012, there was no public consultation on electricity Process” of electricity sector management of No Kazakhstan tions at the RK Parliament.

Table of evaluation of “Regulatory Process” The procedure of appealing to the committee is, first of all, regulated by the indicators of the electricity sector governance in Transparency of Law “On Consideration Procedure for the Appeals from Individuals and Legal Kazakhstan appeals to the Yes Entities” dated 12 January 2007 N 221. No information about the procedure SUMMARY TABLE of indicators on the evaluation committees of ecological and social aspects of the of appealing to parliamentary Committees has been found in open sources. Kazakhstan’s electrical power sector management Transparency of TABLE OF INDICATORS on the evaluation of ecological and social aspects of Kazakhstan’s committee’s Re- No No parliamentary Committees’ Report has been found in open sources. electricity sector management port FILLED PROJECT INDICATORS According to the Law “On the Parliament of the Republic of Kazakhstan and REGULATORY PROCESS INDICATORS the Status of Its Deputies”, Article 8 “Publicity of the National Parliament Performance re- Sessions”, p. 3 says that the officers of state bodies and local authorities shall Yes porting provide explanations within the framework of their competence. According to the RK Parliament Regulations, the Government and the Accounts Com- mittee shall report to the Parliament on a regular basis.

96 TABLE OF CONTENT DETAILED EXPLANATION: In spite of the state strategy on “Green Economy” and the emphasis on innovations Section 1. HISTORY AND CURRENT STATUS OF ELECTRIC POWER INDUSTRY and resource & energy saving technologies, there’s no separate committee on electric power in Parliament. ҚАЗАҚША Section 2. DEVELOPMENT OBJECTIVES The main committees that consider the draft projects related to electricity issues are the Senate Committee on Economic Development and Entrepreneurship and the Mazhilis (Chamber of Deputies) Committee on Eco- Section 3. MAIN PRINCIPLES AND STRATEGIES FOR ELECTRIC POWER INDUSTRY nomic Reform and Regional Development. DEVELOPMENT IN THE REPUBLIC OF KAZAKHSTAN Open interests. A parliamentary deputy may not be a deputy of another representative body, hold other paid

Section 4. “TRANSPARENT TARIFF” CIVIL offices except for teaching, research or other creative activities, conduct entrepreneurial activity, and become РУССКИЙ INITIATIVE: a member of governing body or supervisory board in commercial organization. Violation of this rule will result CONTENT AND WAYS OF IMPLEMENTATION in termination of deputy’s powers. Committee’s activity During the period from June 2012 to November 2013, the Law “On Amendments and Ad- BASIC QUESTIONNAIRE ON INDICATORS ditions to Some Legislative Acts of RK on the Power Industry, the Investment Activities of Natural Monopolies and Regulated Markets” (May-June 2012), the draft law “On Ratification of the Agreement Between the Govern- ENGLISH SUMMARY TABLE of selected indicators of ment of the Republic of Kazakhstan and the Government of the Republic of Korea in the Area of Development, “Electricity Governance Initiative” program Financing, Design, Construction, Operation and Maintenance of Balkhash Thermal Power Plant” (March 2013) “On Amendments and Additions to Some Legislative Acts of the Republic of the RK on Supporting the Use of SUMMARY TABLE Indicators on the “Political Process” of Management of the Electricity Power Renewable Energy Sources” (May 2013) were discussed and adopted. 5 requests from the Chamber deputies Sector in Kazakhstan concerning the electricity issues were submitted to the relevant departments for 3 sessions of Vth convocation. It is necessary to note that the Contributors to the above requests from the deputies were the DPK fac- TABLE OF INDICATORS on “Political Process” of the Electricity Power Sector Management in tion Akzhol, which included 2 deputies from the Committee on Economic Reform and Regional Development. Kazakhstan 1 request came from the Senate Deputies regarding the electricity issues for 2013. It is also necessary to note SUMMARY TABLE indicators on “Regulatory that this request was organized by the deputies outside the Committee on Economic Development and Entre- Process” of electricity sector management of preneurship. Kazakhstan Substantiated reports. The Committee represents information on its activities every business year. This infor- Table of evaluation of “Regulatory Process” mation is documented in the Committee’s minutes. This information reflects the Committee’s meetings, meet- indicators of the electricity sector governance in ings with electors, participation in different sittings, conferences, seminars, etc. held within the year. Kazakhstan SUMMARY TABLE of indicators on the evaluation Public consultations. No Parliamentary hearings on the issues relating to the Committee’s powers were held. of ecological and social aspects of the No public consultation since the beginning of 2012 has been held. Additionally, during the work of the Cham- Kazakhstan’s electrical power sector management ber Deputies of the IIIrd convocation, the Chamber of Public Experts under the Chamber of Deputies of RK TABLE OF INDICATORS on the evaluation of also met, which included representatives of NGO’s and the representatives of higher education institutions. ecological and social aspects of Kazakhstan’s electricity sector management Transparency of Committees’ reports. FILLED PROJECT INDICATORS The Parliament’s website contains sections with the Senate Apparatus’s reports, results of the Senate’s activities where you can find reports from the Senate Apparatus. The Report “On Preliminary Results of the Work REGULATORY PROCESS INDICATORS of the First Session of the Fifth Convocation” was brought up during the studies of the Chamber Apparatus workers. No separate section for the reports from the Chamber Committees’ was found. Also, there is no response received to the official request to the RK Chamber of Deputies dated 11 September 2013, No. 27 and addressed to the deputy Aimbetova S. S., the Chairman of the Committee on Economic Reform and Regional Development, as of today. According to the phone conversation with the Chamber deputy assistant Bekenov A. S., the above request is beyond the competence of this deputy.

97 TABLE OF CONTENT Section 1. HISTORY AND CURRENT STATUS OF RATING SELECTION ELECTRIC POWER INDUSTRY ҚАЗАҚША Section 2. DEVELOPMENT OBJECTIVES Not assessable/Not rated Section 3. MAIN PRINCIPLES AND STRATEGIES FOR ELECTRIC POWER INDUSTRY DEVELOPMENT IN THE REPUBLIC OF Report or activity meets none of the quality elements “Low” KAZAKHSTAN

Section 4. “TRANSPARENT TARIFF” CIVIL Report or activity meets one quality element “Low to Average” РУССКИЙ INITIATIVE: CONTENT AND WAYS OF IMPLEMENTATION Report or activity meets two quality elements “Average”

98 TABLE OF CONTENT PP 5 Section 1. HISTORY AND CURRENT STATUS OF PERSONNEL POLICY IN THE MINISTRY OF POWER/DEPARTMENT ELECTRIC POWER INDUSTRY ҚАЗАҚША Quality Ele- Section 2. DEVELOPMENT OBJECTIVES Index Explanation Section 3. MAIN PRINCIPLES AND STRATEGIES ments FOR ELECTRIC POWER INDUSTRY DEVELOPMENT IN THE REPUBLIC OF “Requirements When Joining the Civil Service”, “Typical Qualification Require- KAZAKHSTAN Clear criteria Yes ments for the Categories of Civil Service Administrative Officers” Section 4. “TRANSPARENT TARIFF” CIVIL РУССКИЙ INITIATIVE: CONTENT AND WAYS OF Expected powers are described in the following regulatory documents: “Re- IMPLEMENTATION Expected pow- Yes quirements When Joining the Civil Service”, “Typical Qualification Require- ers ments for the Categories of Civil Service Administrative Officers”. BASIC QUESTIONNAIRE ON INDICATORS ENGLISH Presidential Decree “On the Civil Servants Honor Code”, Anti-Corruption Act SUMMARY TABLE of selected indicators of Open interests Yes considers the issues related to past relationships and commercial interests “Electricity Governance Initiative” program in the energy sector. SUMMARY TABLE Indicators on the “Political Process” of Management of the Electricity Power Anti-Corruption Act is a fundamental document for preventing any conflict Sector in Kazakhstan of interest. TABLE OF INDICATORS on “Political Process” Rules for pre- Article 10 in particular. “Activities Incompatible with State Functions Per- of the Electricity Power Sector Management in venting any con- Yes formance”, Article 11. “Inadmissibility of the Close Relatives or Connections’ Kazakhstan flict of interest Joint Service”, Article 12. “Offences that Create Conditions for Corruption and SUMMARY TABLE indicators on “Regulatory Responsibility for Them”, Article 13. “Corruption Offences Connected with Un- Process” of electricity sector management of Kazakhstan lawful Gaining of Benefits and Advantages”

Table of evaluation of “Regulatory Process” DETAILED EXPLANATION: The existing laws in the area of electricity, according to current legislation, are indicators of the electricity sector governance in Kazakhstan implemented, first of all, by the Ministry of Industry and New Technologies of the RK. This Ministry, particularly the Department of Energy and Coal Industry, is, according to the Law of the Republic of Kazakhstan “On SUMMARY TABLE of indicators on the evaluation of ecological and social aspects of the Electric Power Industry”, is authorized by the state body for dealing with electricity. The Ministry has the fol- Kazakhstan’s electrical power sector management lowing departments: Investments Committee, Committee for Tourism Industry, Industry Committee, Committee for Technical Regulation and Metrology, Committee for State Energy Supervision and Control, Atomic Energy TABLE OF INDICATORS on the evaluation of ecological and social aspects of Kazakhstan’s Committee and Committee on Geology and Subsurface Management. Personnel policy in this Ministry is de- electricity sector management termined by the following regulatory documents: “On Civil Service” dated 23 July 1999, No. 453, Decree of the FILLED PROJECT INDICATORS RK President dated 3 May 2005 No. 1567 “On the Civil Servants Honor Code”, “Requirements When Joining the Civil Service”, “Typical Qualification Requirements for the Categories of Civil Service Administrative Officers”, REGULATORY PROCESS INDICATORS Anti-Corruption Act. The MINT has also approved the “Anti-Corruption Actions Plan for 2011-2015”.

99 TABLE OF CONTENT Section 1. HISTORY AND CURRENT STATUS OF RATING SELECTION ELECTRIC POWER INDUSTRY ҚАЗАҚША Section 2. DEVELOPMENT OBJECTIVES The rating is not applicable / Not rated Section 3. MAIN PRINCIPLES AND STRATEGIES FOR ELECTRIC POWER INDUSTRY DEVELOPMENT IN THE REPUBLIC OF Report or activity meets none of the quality element “Low” KAZAKHSTAN

100 TABLE OF CONTENT PP 8 Section 1. HISTORY AND CURRENT STATUS OF THE EXECUTIVE AUTHORITY’S ABLILTY TO ASSESS THE ENVIRONMENTAL ISSUES ELECTRIC POWER INDUSTRY ҚАЗАҚША Quality Ele- Indica- Section 2. DEVELOPMENT OBJECTIVES Explanation Section 3. MAIN PRINCIPLES AND STRATEGIES ments tor FOR ELECTRIC POWER INDUSTRY DEVELOPMENT IN THE REPUBLIC OF KAZAKHSTAN At the local level, the actions connected with environmental protection are financed through the departments for natural resources and regulation for Section 4. “TRANSPARENT TARIFF” CIVIL РУССКИЙ Assigned finan- natural use. The environmental programs of these departments do not in- INITIATIVE: No CONTENT AND WAYS OF cial resources clude special measures for reducing the environmental load from the elec- IMPLEMENTATION tricity sector. There are also regional programs for energy conservation, but their quality and performance are doubtful. BASIC QUESTIONNAIRE ON INDICATORS ENGLISH Access to exami- According to the RK law, all construction and reconstruction projects (includ- Yes SUMMARY TABLE of selected indicators of nation ing the electricity projects) must undergo an environmental examination. “Electricity Governance Initiative” program The structure of the executive authorities responsible for the electricity sec- SUMMARY TABLE Indicators on the “Political Responsible per- No tor does not include specially designated persons who would be responsible Process” of Management of the Electricity Power son Sector in Kazakhstan for environmental protection. TABLE OF INDICATORS on “Political Process” of the Electricity Power Sector Management in Extension of There were no special training and study on the issues of the energy sector’s Kazakhstan knowledge in environmental impact conducted over the last 2 years, either for the govern- No SUMMARY TABLE indicators on “Regulatory the area of envi- ment organizations responsible for environmental examination or for local Process” of electricity sector management of ronment government bodies responsible for power industry development. Kazakhstan Table of evaluation of “Regulatory Process” DETAILED EXPLANATION indicators of the electricity sector governance in Kazakhstan RATING SELECTION SUMMARY TABLE of indicators on the evaluation of ecological and social aspects of the The rating is not applicable / Not rated Kazakhstan’s electrical power sector management TABLE OF INDICATORS on the evaluation of Report or activity meets none of the quality element “Low” ecological and social aspects of Kazakhstan’s electricity sector management Report or activity meets one quality element “Low to Average” FILLED PROJECT INDICATORS Report or activity meets two quality elements “Average” REGULATORY PROCESS INDICATORS Report or activity meets three quality elements “Average to High”

Report or activity meets all quality elements “High”

101 TABLE OF CONTENT Name of the researcher and organization: Vadim Litvinov, expert of Ecology-Youth-Initiative-Development PF, Section 1. HISTORY AND CURRENT STATUS OF ELECTRIC POWER INDUSTRY member of Republican Association NGO “Transparent Tariff”. ҚАЗАҚША Section 2. DEVELOPMENT OBJECTIVES Information source: Answers from the competent authorities, the Comprehensive Plan for Energy Conservation Section 3. MAIN PRINCIPLES AND STRATEGIES in Pavlodar Region for 2012 – 2015, Comprehensive Plan for Energy Conservation in Kyzylorda Region for 2012 FOR ELECTRIC POWER INDUSTRY DEVELOPMENT IN THE REPUBLIC OF – 2015. KAZAKHSTAN Additional information: At the level of regions, Comprehensive Plans for Energy Conservation up to 2015 were Section 4. “TRANSPARENT TARIFF” CIVIL РУССКИЙ INITIATIVE: approved. Development of these plans was provided according to the republic-wide Energy Conservation Pro- CONTENT AND WAYS OF gram for the Period up to 2015 (p. 4 of the program actions plan). Within the framework of the research, compre- IMPLEMENTATION hensive plans for energy conservation in two regions (Pavlodar and Kyzylorda) have been analyzed. According to the results of the analysis, it is necessary to note the following: 60% of 27.6 bn KZT planned in Comprehensive BASIC QUESTIONNAIRE ON INDICATORS Plan for Energy Conservation in Kyzylorda Region is expected to be spent for 3 action items (each 5.5 bn): ENGLISH • Repairs in high-rise apartment house within the framework of the Program for Modernization of SUMMARY TABLE of selected indicators of Housing and Utility Services for 2011 – 2020 “Electricity Governance Initiative” program • Creation and update of housing databases SUMMARY TABLE Indicators on the “Political Process” of Management of the Electricity Power • Expansion and reconstruction of water supply and sewage systems in Kyzylorda. Sector in Kazakhstan Comprehensive Plan for Energy Conservation in Pavlodar Region posted on Maslikhat’s website does not specify TABLE OF INDICATORS on “Political Process” of the Electricity Power Sector Management in how much of the budget resources are going to be spent on the program’s implementation. Moreover, a part Kazakhstan of the actions provided by the Plan for Energy Conservation has already been included into other government SUMMARY TABLE indicators on “Regulatory programs. Thus, random plans for energy conservation in two regions show that when realizing environmental Process” of electricity sector management of strategies at the local level, the approach to selection of the actions to reduce the load on the environment from Kazakhstan energy sector in general and from electricity sector is often formalistic. Table of evaluation of “Regulatory Process” indicators of the electricity sector governance in Kazakhstan SUMMARY TABLE of indicators on the evaluation of ecological and social aspects of the Kazakhstan’s electrical power sector management TABLE OF INDICATORS on the evaluation of ecological and social aspects of Kazakhstan’s electricity sector management FILLED PROJECT INDICATORS REGULATORY PROCESS INDICATORS

102 TABLE OF CONTENT PP 9 Section 1. HISTORY AND CURRENT STATUS OF THE EXECUTIVE AUTHORITY’S ABILITY TO ASSESS SOCIAL ISSUES ELECTRIC POWER INDUSTRY Quality Elements Indicator Explanation ҚАЗАҚША Section 2. DEVELOPMENT OBJECTIVES Section 3. MAIN PRINCIPLES AND STRATEGIES Financial resources for assessing social issues may be assigned by the state FOR ELECTRIC POWER INDUSTRY DEVELOPMENT IN THE REPUBLIC OF bodies as a state social order by including a specialist for sociological re- KAZAKHSTAN Assigned finan- search into staff or by research to assess the needs of target groups. However, No Section 4. “TRANSPARENT TARIFF” CIVIL cial resources central and local executives assign funds within the framework of state social РУССКИЙ INITIATIVE: order only for information measures to promote the energy conservation in CONTENT AND WAYS OF IMPLEMENTATION businesses and in everyday life. Executive staff has the necessary statistical data and information about the BASIC QUESTIONNAIRE ON INDICATORS impact of electricity and heating price on public’s standard of living. Impor- ENGLISH tant information may be obtained by the Agency for Regulation of Natural Access to exami- Monopolies of the RK during public hearings with the participation of the SUMMARY TABLE of selected indicators of Yes “Electricity Governance Initiative” program nation relevant NGO’s and persons concerned. The state bodies have all necessary SUMMARY TABLE Indicators on the “Political information to conduct the examination within the framework of directions Process” of Management of the Electricity Power specified. However, there is no publicly available information on the number Sector in Kazakhstan of examinations conducted and on their content. TABLE OF INDICATORS on “Political Process” of the Electricity Power Sector Management in The Ministry of Industry and New Technologies of the RK has no separate de- Responsible per- partments responsible for studying the impact of decisions made in the en- Kazakhstan No son appointed ergy sector on the social life of the population. No special experts responsible SUMMARY TABLE indicators on “Regulatory Process” of electricity sector management of for social area are indicated in the staff. Kazakhstan No research projects provided. The Agency for Regulation of Natural Monop- Table of evaluation of “Regulatory Process” Extension of olies of the RK studies the social issues in the form of public hearings and indicators of the electricity sector governance in knowledge in the press tours, or by direct communication with the people. But meetings with Kazakhstan No area of social is- the citizens do not incur any financial cost, the workers of ARNM regional de- SUMMARY TABLE of indicators on the evaluation sues partments organize meetings in their own buildings. To fight corruption, ap- of ecological and social aspects of the Kazakhstan’s electrical power sector management plications and complaints from the consumers will be accepted electronically. TABLE OF INDICATORS on the evaluation of ecological and social aspects of Kazakhstan’s electricity sector management FILLED PROJECT INDICATORS REGULATORY PROCESS INDICATORS

103 TABLE OF CONTENT The state bodies may expand their knowledge of social issues in two ways: Section 1. HISTORY AND CURRENT STATUS OF through the active cooperation with non-governmental organizations and ELECTRIC POWER INDUSTRY independent involvement of the public (stakeholders) into decision-making ҚАЗАҚША Section 2. DEVELOPMENT OBJECTIVES process. Only the knowledge of problems and needs of ordinary people can Section 3. MAIN PRINCIPLES AND STRATEGIES form a true and fair view on social situation in the country. It is important for FOR ELECTRIC POWER INDUSTRY DEVELOPMENT IN THE REPUBLIC OF government representatives to organize work at lower level. Availability of KAZAKHSTAN rural electrification program. The project “Development of Rural Electrifica- Section 4. “TRANSPARENT TARIFF” CIVIL tion within the Framework of “Rural Development” State Programs and the РУССКИЙ INITIATIVE: CONTENT AND WAYS OF Program “Development of Electric Power System in the Republic of Kazakh- IMPLEMENTATION stan” currently works within the territory of the Republic of Kazakhstan. The project is expected to be in effect by 2015. The project is administered by Rural electrifi- BASIC QUESTIONNAIRE ON INDICATORS Kazselenergoproekt institute. Taking into account the fact that the purpose of cation program Yes rural electrification is to construct up to 100 thous kilometers of medium and ENGLISH availability low voltage networks, it is expected that by 2015, the consumption will be SUMMARY TABLE of selected indicators of up to 100 bn kW/h per year. The institute experts propose to build automatic “Electricity Governance Initiative” program DNC networks as a part of integrated automatic system to control the genera- SUMMARY TABLE Indicators on the “Political tion, transmission, distribution and consumption of electricity. It is expected Process” of Management of the Electricity Power to invest about $ 2.5 bn to implement the proposed program. This will allow Sector in Kazakhstan connecting almost all the consumers to a centralized power supply. An im- TABLE OF INDICATORS on “Political Process” portant reserve for increasing the power supply capacity will be the construc- of the Electricity Power Sector Management in tion of small power plants up to 50 MW based on gas piston, gas turbine and Kazakhstan steam installations. The areas not connected to the centralized power supply SUMMARY TABLE indicators on “Regulatory are supposed to be provided with autonomous generating plants: diesel and Process” of electricity sector management of wind power stations. Kazakhstan Table of evaluation of “Regulatory Process” DETAILED EXPLANATION indicators of the electricity sector governance in Kazakhstan RATING SELECTION SUMMARY TABLE of indicators on the evaluation The rating is not applicable / Not rated of ecological and social aspects of the Kazakhstan’s electrical power sector management Report or activity meets none of the quality elements “Low” TABLE OF INDICATORS on the evaluation of ecological and social aspects of Kazakhstan’s Report or activity meets one quality element “Low to Average” electricity sector management Report or activity meets two quality elements “Average” FILLED PROJECT INDICATORS REGULATORY PROCESS INDICATORS Report or activity meets three quality elements “Average to High” Report or activity meets all quality elements “High”

Name of the researcher and organization: Belov Sergey Viktorovich MOO “Active Youth NKO” Information source: Data provided by RK Agency for Regulation of Natural Monopolies, RK Ministry of Industry and New Technologies.

104 TABLE OF CONTENT PP 10 Section 1. HISTORY AND CURRENT STATUS OF ANNUAL REPORTS OF THE MINISTRY/DEPARTMENT OF ENERGY ELECTRIC POWER INDUSTRY ҚАЗАҚША Quality Ele- Indica- Section 2. DEVELOPMENT OBJECTIVES Explanation ments tor Section 3. MAIN PRINCIPLES AND STRATEGIES FOR ELECTRIC POWER INDUSTRY DEVELOPMENT IN THE REPUBLIC OF The official website contains information on the execution of 2012 national KAZAKHSTAN budget by the Ministry of Industry and New Technologies of the Republic of Section 4. “TRANSPARENT TARIFF” CIVIL РУССКИЙ INITIATIVE: Kazakhstan. CONTENT AND WAYS OF Financial re- IMPLEMENTATION Yes This information contains, inter alia, the costs for up-keeping the apparatus ports of the Ministry with its territorial subdivisions in 2012. Reports on the re- BASIC QUESTIONNAIRE ON INDICATORS sults of budget programs (subprograms) on implementation monitoring as

of April 1, July 1, October 1 and November 1, 2013 are also available on the ENGLISH website. SUMMARY TABLE of selected indicators of “Electricity Governance Initiative” program Report on the Implementation of Operational Plan of the Ministry of Industry SUMMARY TABLE Indicators on the “Political and New Technologies of the Republic of Kazakhstan in January-December Process” of Management of the Electricity Power 2012 is represented as a table showing the strategic directions, established Sector in Kazakhstan goals, target indicators, tasks, measures, responsible executives, deadlines, Performance TABLE OF INDICATORS on “Political Process” Yes completion form, indicators of direct result, actually performed activities, review of the Electricity Power Sector Management in reasons for non-performance, recommendations, including the proposals on Kazakhstan amending the OP. Directions for future initiatives, projects and decisions are SUMMARY TABLE indicators on “Regulatory set forth in a separate document: Strategic Plan of the Ministry of Industry Process” of electricity sector management of Kazakhstan and New Technologies of the Republic of Kazakhstan for 2011-2015. Table of evaluation of “Regulatory Process” The following information is available on the official website: Report on indicators of the electricity sector governance in Kazakhstan the Implementation of Operational Plan of the Ministry of Industry and New Technologies of the Republic of Kazakhstan in January-December 2012, In- Availability Yes SUMMARY TABLE of indicators on the evaluation formation on the Execution of Republican Budget 2012 by the Ministry of of ecological and social aspects of the Kazakhstan’s electrical power sector management Industry and New Technologies of the Republic of Kazakhstan, SPAIID Imple- mentation Report. TABLE OF INDICATORS on the evaluation of ecological and social aspects of Kazakhstan’s electricity sector management Local languages Yes All reports are available in Kazakh. FILLED PROJECT INDICATORS REGULATORY PROCESS INDICATORS

105 TABLE OF CONTENT DETAILED EXPLANATION: Ministry of Industry and New Technologies of the Republic of Kazakhstan provides Section 1. HISTORY AND CURRENT STATUS OF ELECTRIC POWER INDUSTRY its report according to the format approved by the Resolution of the Government of the Republic of Kazakh- ҚАЗАҚША Section 2. DEVELOPMENT OBJECTIVES stan dated 11 September 2012 and to the deadlines provided for submission of the reports on the implementation of state policy in energy conservation and increasing the energy efficiency by central executive Section 3. MAIN PRINCIPLES AND STRATEGIES FOR ELECTRIC POWER INDUSTRY bodies. The form must contain information about the action name, action dates, result of the action, financial DEVELOPMENT IN THE REPUBLIC OF KAZAKHSTAN costs, frequency of the action, etc. For submission of reports on the implementation of state policy in energy conservation and increasing the energy efficiency by central executive bodies, the central executive bodies Section 4. “TRANSPARENT TARIFF” CIVIL РУССКИЙ INITIATIVE: shall, by acting within their competence, submit their reports on the implementation of state policy in energy CONTENT AND WAYS OF conservation and increase the energy efficiency to the authorized body for energy conservation and increase IMPLEMENTATION the energy efficiency by January 25 of the year following the reporting year.

BASIC QUESTIONNAIRE ON INDICATORS RATING SELECTION ENGLISH

SUMMARY TABLE of selected indicators of The rating is not applicable / Not rated “Electricity Governance Initiative” program Report or activity meets none of the quality elements “Low” SUMMARY TABLE Indicators on the “Political Process” of Management of the Electricity Power Sector in Kazakhstan Report or activity meets one quality element “Low to Average” TABLE OF INDICATORS on “Political Process” of the Electricity Power Sector Management in Report or activity meets two quality elements “Average” Kazakhstan Report or activity meets three quality elements “Average to High” SUMMARY TABLE indicators on “Regulatory Process” of electricity sector management of Kazakhstan Report or activity meets all quality elements “High” Table of evaluation of “Regulatory Process” indicators of the electricity sector governance in Kurmanbaeva A. A. PA “Committee for Public Control over the Execu- Kazakhstan Name of the researcher and organization: tion of State Programs at the Local Level” SUMMARY TABLE of indicators on the evaluation of ecological and social aspects of the Information source: Information on the Execution of Republican Budget 2012 Kazakhstan’s electrical power sector management Ministry of Industry and New Technologies of the Republic of Kazakhstan http://www.mint.gov.kz/?id=187 , TABLE OF INDICATORS on the evaluation of Report on the Implementation of Operational Plan of the Ministry of Industry and New Technologies of the ecological and social aspects of Kazakhstan’s electricity sector management Republic of Kazakhstan in January-December 2012 http://www.mint.gov.kz/index.php?id=440&lang=ru. FILLED PROJECT INDICATORS REGULATORY PROCESS INDICATORS

106 TABLE OF CONTENT PP 12 Section 1. HISTORY AND CURRENT STATUS OF EFFECTIVE FUNCTIONING OF THE SEPARATE PLANNING AGENCY / POLICY ELECTRIC POWER INDUSTRY DEVELOPMENT ҚАЗАҚША Section 2. DEVELOPMENT OBJECTIVES Section 3. MAIN PRINCIPLES AND STRATEGIES Quality Elements Indicator Explanation FOR ELECTRIC POWER INDUSTRY DEVELOPMENT IN THE REPUBLIC OF KAZAKHSTAN Requirement to consult the planning agency No No data available

Section 4. “TRANSPARENT TARIFF” CIVIL РУССКИЙ INITIATIVE: Mechanism of executives’ response assessment No No data available CONTENT AND WAYS OF IMPLEMENTATION Information search powers No No data available

BASIC QUESTIONNAIRE ON INDICATORS Transparency in functioning No No data available ENGLISH

Consulting procedures No data available SUMMARY TABLE of selected indicators of “Electricity Governance Initiative” program DETAILED EXPLANATION: SUMMARY TABLE Indicators on the “Political Process” of Management of the Electricity Power Sector in Kazakhstan RATING SELECTION

TABLE OF INDICATORS on “Political Process” The rating is not applicable / Not rated of the Electricity Power Sector Management in Kazakhstan Report or activity meets none of the quality elements “Low” SUMMARY TABLE indicators on “Regulatory Process” of electricity sector management of Kazakhstan Report or activity meets one quality element “Low to Average”

Table of evaluation of “Regulatory Process” Report or activity meets two quality elements “Average” indicators of the electricity sector governance in Kazakhstan Report or activity meets three quality elements “Average to High” SUMMARY TABLE of indicators on the evaluation of ecological and social aspects of the Kazakhstan’s electrical power sector management Report or activity meets all quality elements “High” TABLE OF INDICATORS on the evaluation of ecological and social aspects of Kazakhstan’s Name of the researcher and organization: Sara Espenova, PF “KAMEDA” electricity sector management Information source: Additional information: Official request No. 29 dated 11/09/2013 was sent to the MINT FILLED PROJECT INDICATORS Official and a response was received. The MINT did not mind meeting, but there was still no meeting because REGULATORY PROCESS INDICATORS the key respondents were always busy. The MINT refused to provide separate documents.

107 TABLE OF CONTENT PP 13 Section 1. HISTORY AND CURRENT STATUS OF POTENTIAL OF CIVIL SOCIETY ELECTRIC POWER INDUSTRY ҚАЗАҚША Quality Ele- Indica- Section 2. DEVELOPMENT OBJECTIVES Explanation ments tor Section 3. MAIN PRINCIPLES AND STRATEGIES FOR ELECTRIC POWER INDUSTRY DEVELOPMENT IN THE REPUBLIC OF Electric power industry in Kazakhstan is a specific area of activity. Civil so- KAZAKHSTAN ciety organizations include individual organizations that are active in elec- Section 4. “TRANSPARENT TARIFF” CIVIL РУССКИЙ INITIATIVE: Technical and tricity issues and give reasonable comments on this matter, their notes and CONTENT AND WAYS OF economic suggestions are worthy of attention. These are: IMPLEMENTATION Yes analytical po- 1. National Chamber “Atameken” tential BASIC QUESTIONNAIRE ON INDICATORS 2. PA “Kazpotrebnadzor” ENGLISH 3. Almaty Public Antimonopoly Commission. SUMMARY TABLE of selected indicators of “Electricity Governance Initiative” program Active participa- SUMMARY TABLE Indicators on the “Political tion and Participation is occasional and occurs only when the results of changes in Process” of Management of the Electricity Power No energy sector have direct effect on the interests of population or the inter- Sector in Kazakhstan strategic poten- ests of certain production areas. tial TABLE OF INDICATORS on “Political Process” of the Electricity Power Sector Management in Analysis of en- Kazakhstan It is difficult to analyze the environmental and social impact of civil society vironmental and SUMMARY TABLE indicators on “Regulatory No organizations, because the energy sector is not “transparent” both at national social impact of Process” of electricity sector management of and at regional levels. Kazakhstan CSO Table of evaluation of “Regulatory Process” indicators of the electricity sector governance in In Kazakhstan, the electricity is available to about 98% of the population, Kazakhstan including 99% of urban population and 91% of rural population. The main Support for problems for the population are increasing prices and quality of the electric- SUMMARY TABLE of indicators on the evaluation weaker groups ity supplied (outages and temporary cutoffs). There are two public associa- of ecological and social aspects of the No Kazakhstan’s electrical power sector management and local social tions for the protection of consumers’ rights in this region: PA “Kazpotreb- TABLE OF INDICATORS on the evaluation of units nadzor” and Almaty Public Antimonopoly Commission, experts of which are ecological and social aspects of Kazakhstan’s adequately qualified. However, their activity is not sufficient due to closed electricity sector management nature and corruption in electricity sector. FILLED PROJECT INDICATORS Current ability CSO leaders and experts working in the electricity sector have necessary REGULATORY PROCESS INDICATORS Yes technical education and keep in touch with their colleagues from Russia and to learn Central Asia.

108 TABLE OF CONTENT In 2013, the Association of Kazakh NGO’s “Transparent Tariff” was created, Section 1. HISTORY AND CURRENT STATUS OF ELECTRIC POWER INDUSTRY which includes 7 NGO’s that represent Western, Northern, Southern, Central Creation of net- ҚАЗАҚША No and Eastern regions of the country. However, their number does not create Section 2. DEVELOPMENT OBJECTIVES work sufficient representation, they need to be expanded, and their activity is not Section 3. MAIN PRINCIPLES AND STRATEGIES FOR ELECTRIC POWER INDUSTRY so strong as yet. DEVELOPMENT IN THE REPUBLIC OF KAZAKHSTAN The state bodies for power management are reluctant to cooperate with Section 4. “TRANSPARENT TARIFF” CIVIL organizations from non-governmental sector on energy sector development РУССКИЙ INITIATIVE: Wide confidence No CONTENT AND WAYS OF issues. The NGO’s have been involved into development of specific programs IMPLEMENTATION in the area of electric power industry.

BASIC QUESTIONNAIRE ON INDICATORS DETAILED EXPLANATION ENGLISH

RATING SELECTION SUMMARY TABLE of selected indicators of “Electricity Governance Initiative” program The rating is not applicable / Not rated SUMMARY TABLE Indicators on the “Political Process” of Management of the Electricity Power Sector in Kazakhstan Report or activity meets none of the quality elements “Low”

TABLE OF INDICATORS on “Political Process” Report or activity meets one quality element “Low to Average” of the Electricity Power Sector Management in Kazakhstan Report or activity meets two quality elements “Average” SUMMARY TABLE indicators on “Regulatory Process” of electricity sector management of Kazakhstan Report or activity meets three quality elements “Average to High”

Table of evaluation of “Regulatory Process” Report or activity meets all quality elements “High” indicators of the electricity sector governance in Kazakhstan SUMMARY TABLE of indicators on the evaluation Name of the researcher and organization: Nazarov Eduard Yurievich, PF “CAIR” of ecological and social aspects of the Kazakhstan’s electrical power sector management TABLE OF INDICATORS on the evaluation of ecological and social aspects of Kazakhstan’s electricity sector management FILLED PROJECT INDICATORS REGULATORY PROCESS INDICATORS

109 TABLE OF CONTENT PP 14 Section 1. HISTORY AND CURRENT STATUS OF QUALITY OF LEGAL DEBATES CONCERNING THE ELECTRICITY LAW ELECTRIC POWER INDUSTRY ҚАЗАҚША Quality Ele- Indica- Section 2. DEVELOPMENT OBJECTIVES Explanation ments tor Section 3. MAIN PRINCIPLES AND STRATEGIES FOR ELECTRIC POWER INDUSTRY DEVELOPMENT IN THE REPUBLIC OF Consideration of draft laws complies with the recommended duration: mini- KAZAKHSTAN mum is one month, maximum is one year. Section 4. “TRANSPARENT TARIFF” CIVIL РУССКИЙ INITIATIVE: Example. 8 May 2013, the Chamber of the Parliament of Kazakhstan ap- CONTENT AND WAYS OF IMPLEMENTATION proved the draft law “On Amendments and Additions to Some Legislative Acts of the Republic of Kazakhstan on Supporting the Use of Renewable En- BASIC QUESTIONNAIRE ON INDICATORS ergy Sources” in its first reading. ENGLISH Debates dura- 30 May 2013, the Chamber of the Parliament of the RK approved the draft Yes SUMMARY TABLE of selected indicators of tion law in its second reading. 11 June 2013, a draft law was considered at the “Electricity Governance Initiative” program enlarged meeting in the Committee on the Environment and Rural Develop- SUMMARY TABLE Indicators on the “Political ment of the Senate of the Parliament of the Republic of Kazakhstan. Concep- Process” of Management of the Electricity Power tually approved draft law was submitted for consideration by the Chamber. Sector in Kazakhstan On June 13, the Senate Deputies of the Parliament approved the draft law in TABLE OF INDICATORS on “Political Process” its first reading. 20 June 2013, the Senate of the Parliament of the RK passed of the Electricity Power Sector Management in the draft law “On Amendments and Additions to Some Legislative Acts of the Kazakhstan Republic of Kazakhstan on Supporting the Use of Renewable Energy Sources”. SUMMARY TABLE indicators on “Regulatory Process” of electricity sector management of When considering the draft law “On Amendments and Additions to Some Kazakhstan Legislative Acts of the Republic of Kazakhstan on Supporting the Use of Re- Presence of Yes newable Energy Sources” in the Chamber of the Parliament at the first and Table of evaluation of “Regulatory Process” members indicators of the electricity sector governance in second readings and in the Senate of the Parliament at the first and second Kazakhstan readings, a quorum was present. SUMMARY TABLE of indicators on the evaluation of ecological and social aspects of the The RK Parliament includes 83 representatives from the People’s Democrat- Kazakhstan’s electrical power sector management ic Party “Nur Otan” (80.99%), 8 representatives from the Democratic Party of TABLE OF INDICATORS on the evaluation of Kazakhstan “Ak Zhol” (7.47%), 7 representatives from the Communist People’s ecological and social aspects of Kazakhstan’s Party of Kazakhstan (7.19%) and9 non-aligned persons. electricity sector management Composition of Yes When considering the draft law “On Amendments and Additions to Some FILLED PROJECT INDICATORS speakers Legislative Acts of the Republic of Kazakhstan on Supporting the Use of REGULATORY PROCESS INDICATORS Renewable Energy Sources”, representatives of the two out of three parties expressed their opinion, their statements being of a clarifying and approving kind.

Availability of No Minutes of meetings are not published on the website. the minutes

110 TABLE OF CONTENT DETAILED EXPLANATION: The Parliament of the Republic of Kazakhstan consists of two Chambers: Senate Section 1. HISTORY AND CURRENT STATUS OF ELECTRIC POWER INDUSTRY and Chamber of Deputies that act on a permanent basis. The Senate consists of the deputies that represent ҚАЗАҚША Section 2. DEVELOPMENT OBJECTIVES each district, each city of national status and the capital of the Republic of Kazakhstan by two persons. Half of the elected Senate Deputies are re-elected every three years. Fifteen Senate Deputies are appointed by Section 3. MAIN PRINCIPLES AND STRATEGIES FOR ELECTRIC POWER INDUSTRY the President of the Republic taking into account the necessity to represent national, cultural and other im- DEVELOPMENT IN THE REPUBLIC OF portant interests of society in the Senate. The Chamber consists of one hundred and seven deputies, among KAZAKHSTAN which ninety eight deputies are elected by secret ballot from political parties according to party lists in one Section 4. “TRANSPARENT TARIFF” CIVIL РУССКИЙ INITIATIVE: nationwide constituency on the basis of universal, equal and direct suffrage, nine deputies of the Chamber CONTENT AND WAYS OF are elected by the Assembly of People of Kazakhstan. Proposals for legislative acts submitted by the President IMPLEMENTATION of the Republic, by deputies and by the Government are forwarded for consideration to the relevant standing committees of the Chamber according to the Decree issued by the Chamber and may be considered at its ple- BASIC QUESTIONNAIRE ON INDICATORS

nary meeting only when they are accompanied by the conclusions of the standing committees of the Chamber. ENGLISH The draft law considered and approved by a majority vote of the total number of deputies of the Chamber is SUMMARY TABLE of selected indicators of submitted to the Senate where it is considered within no more than sixty days from the date of receipt of the “Electricity Governance Initiative” program draft by the Senate. If the draft is rejected as a whole by a majority vote of the total number of deputies of SUMMARY TABLE Indicators on the “Political the Senate, it is returned to the Chamber. If the Chamber approves the draft again by a majority of two thirds Process” of Management of the Electricity Power of the total number of deputies, it is submitted to the Senate for reconsideration and voting. The draft law Sector in Kazakhstan rejected by the Senate repeatedly may not be submitted again during the same session. TABLE OF INDICATORS on “Political Process” of the Electricity Power Sector Management in RATING SELECTION Kazakhstan SUMMARY TABLE indicators on “Regulatory The rating is not applicable / Not rated Process” of electricity sector management of Kazakhstan Report or activity meets none of the quality elements “Low” Table of evaluation of “Regulatory Process” indicators of the electricity sector governance in Report or activity meets one quality element “Low to Average” Kazakhstan SUMMARY TABLE of indicators on the evaluation Report or activity meets two quality elements “Average” of ecological and social aspects of the Kazakhstan’s electrical power sector management Report or activity meets three quality elements “Average to High” TABLE OF INDICATORS on the evaluation of ecological and social aspects of Kazakhstan’s Report or activity meets all quality elements “High” electricity sector management FILLED PROJECT INDICATORS Name of the researcher and organization: Kurmanbaeva A. A. PA “Committee for Public Control over the Execu- REGULATORY PROCESS INDICATORS tion of State Programs at the Local Level” Information source: Official website of the Parliament of the Republic of Kazakhstan www.parlam.kz , zakon.kz http://www.zakon.kz/4559523-mazhilis-odobril-proekt-popravok-po.html, tengrinews.kz http://tengrinews.kz/kazakhstan_news/zakonoproekt-po-ispolzovaniyu-vozobnovlyaemyih-istochnikov-energii-odobril- senat-236052/ , zakon.kz http://www.zakon.kz/4561795-senatory-odobrili-popravki-v.html , zakon.kz http:// www.zakon.kz/4561391-senatory-obsudili-voprosy-podderzhki.html.

111 TABLE OF CONTENT PP 15 Section 1. HISTORY AND CURRENT STATUS OF QUALITY OF MEDIA COVERAGE FOR POLICY AND REFORMS IN THE ELECTRICITY ELECTRIC POWER INDUSTRY SECTOR ҚАЗАҚША Section 2. DEVELOPMENT OBJECTIVES Quality Ele- Indica- Section 3. MAIN PRINCIPLES AND STRATEGIES Explanation FOR ELECTRIC POWER INDUSTRY ments tor DEVELOPMENT IN THE REPUBLIC OF KAZAKHSTAN

The part of information about the electricity sector and related matters is only РУССКИЙ Section 4. “TRANSPARENT TARIFF” CIVIL INITIATIVE: 2-3% of the total information flow. Interesting articles were published on CONTENT AND WAYS OF Volume of public news sites and printed quite often. All the most recent news regarding IMPLEMENTATION Yes media coverage the power supply were published directly on the official websites and in the BASIC QUESTIONNAIRE ON INDICATORS other printed reports of the organizations related to this industry in the form

of latest news and reports. ENGLISH

SUMMARY TABLE of selected indicators of The main issues raised in the media during the period of analysis: “Electricity Governance Initiative” program Announcing the introduction of the State Energy Registry. SUMMARY TABLE Indicators on the “Political Process” of Management of the Electricity Power Launch of the second phase of the project “Modernization of National Power Sector in Kazakhstan Grid. Stage 2”. TABLE OF INDICATORS on “Political Process” Decrease, increase of the electricity price in several regions of Kazakhstan. of the Electricity Power Sector Management in Kazakhstan Import and export of electric power in Kazakhstan. SUMMARY TABLE indicators on “Regulatory Events leading to “Green” energy. Process” of electricity sector management of Quality of media Kazakhstan Yes Articles written in positive and neutral tones, are of superficial kind and tell coverage Table of evaluation of “Regulatory Process” only about the event headline, which does not reveal the inside story of a indicators of the electricity sector governance in true facts. Negative materials tell about the true technical problems and the Kazakhstan lack of knowledge about what is happening among the people. The most SUMMARY TABLE of indicators on the evaluation popular cause of negativity is the issue of price policy in the regions. The of ecological and social aspects of the citizens also worry because of the technical condition of power equipment, Kazakhstan’s electrical power sector management overrated estimates of construction projects for power generation and the TABLE OF INDICATORS on the evaluation of poor control of compliance with the safety regulations and the rules for ecological and social aspects of Kazakhstan’s technical operation of power plants by the state energy supervisory authority electricity sector management is particularly noted; moreover, the critical look falls on the receipt and FILLED PROJECT INDICATORS distribution of profits between the monopolists in this industry. REGULATORY PROCESS INDICATORS

112 TABLE OF CONTENT There are 6 (47%) positive articles, 2 (15%) negative and 5 (38%) neutral. Section 1. HISTORY AND CURRENT STATUS OF ELECTRIC POWER INDUSTRY Most of the articles are neutral and informative, and engender further ҚАЗАҚША Section 2. DEVELOPMENT OBJECTIVES development of the public discussions concerning the news item. Neutral Section 3. MAIN PRINCIPLES AND STRATEGIES materials include the messages presented in the form of summary reports FOR ELECTRIC POWER INDUSTRY DEVELOPMENT IN THE REPUBLIC OF Balance of prepared by the authorized bodies for other enterprises and for the public. Yes KAZAKHSTAN media coverage Generally, the information is published according to the programs on media

Section 4. “TRANSPARENT TARIFF” CIVIL coverage of the RK state bodies’ activity that are aimed to create an objective РУССКИЙ INITIATIVE: CONTENT AND WAYS OF public opinion, to make the activity transparent. Positive articles include all IMPLEMENTATION the issues that cover all kinds of achievements and innovations in the area of electric power. Unlike the neutral articles, here the names of supervising BASIC QUESTIONNAIRE ON INDICATORS and responsible persons are given. ENGLISH DETAILED EXPLANATION: As in many developing countries as well as in our country, mass media form the SUMMARY TABLE of selected indicators of opinion about one or the other authority and about officials. I.e., on the one hand, by formulating and expressing “Electricity Governance Initiative” program the public opinion and mass media, by accumulating the people’s experience and will and, on the other hand, SUMMARY TABLE Indicators on the “Political by exerting an influence not only on people’s mind, but also on their deeds and collective actions. Thus, the Process” of Management of the Electricity Power “fourth estate” rules even in the policy of such global resource as electric power. Media selection criteria for Sector in Kazakhstan monitoring were: TABLE OF INDICATORS on “Political Process” of the Electricity Power Sector Management in • Total circulation, frequency of issuance. Kazakhstan • Ownership. SUMMARY TABLE indicators on “Regulatory Process” of electricity sector management of • Type of information source: printed / electronic. Kazakhstan • Content. Table of evaluation of “Regulatory Process” indicators of the electricity sector governance in Total number of mass media considered: 29. Kazakhstan • Of which – 7 printed media SUMMARY TABLE of indicators on the evaluation of ecological and social aspects of the • electronic media – 16 Kazakhstan’s electrical power sector management • TV media – 6. TABLE OF INDICATORS on the evaluation of ecological and social aspects of Kazakhstan’s When analyzing the media products we have studied, we got a feeling that there are three separate “countries” electricity sector management living in different worlds. The first of these “countries” were the electric power entities themselves, the other two FILLED PROJECT INDICATORS were state and public (the end users). Proceeding from the above, we came to a series of recommendations to be taken into account. The following innovations should be introduced into the policy of all regulatory bodies REGULATORY PROCESS INDICATORS and enterprises involved in generation, supply and distribution of electric power: informational, financial, environmental, social and industrial transparency. For full satisfaction of all parties connected with electric power, we need to organize accurate working of the divisions and departments responsible for public relations, to provide them with the access to information necessary for the relevant parties. The websites controlling the regulatory bodies and power industry subjects shall provide the following:

113 TABLE OF CONTENT Provision of the information about the companies’ activities upon the request from entities involved in RK Section 1. HISTORY AND CURRENT STATUS OF ELECTRIC POWER INDUSTRY power industry, national and local state executives. Joint provision of the documents on development to ҚАЗАҚША Section 2. DEVELOPMENT OBJECTIVES relevant state bodies and to other entities involved into RK power industry. Regular announcement of events connected with prospective development of the industry. Provision of informational materials on the activities Section 3. MAIN PRINCIPLES AND STRATEGIES FOR ELECTRIC POWER INDUSTRY of entities involved into RK power industry and regulatory bodies to mass media and other interested parties DEVELOPMENT IN THE REPUBLIC OF upon their official request. KAZAKHSTAN

Section 4. “TRANSPARENT TARIFF” CIVIL Possibility to organize comments and interviews with managers and leading specialists in the area of power РУССКИЙ INITIATIVE: CONTENT AND WAYS OF industry. Substantiation of amendments and additions to price policy by necessary documentation. During IMPLEMENTATION the period specified, from 05/08/2013 to 12/08/2013 (inclusive three days before and three days after the period), the national and local media were being reviewed and monitored once a week. BASIC QUESTIONNAIRE ON INDICATORS Electronic media: www.tengrinews.kz www.24news.kz, www.zakon.kz, www.kt.kz, www.bnews.kz, www.nomad. ENGLISH su, www.capital.kz, www.inform.kz, www.panorama.kz, www.gazeta.kz, www.kursiv.kz, www.today.kz, www.zon- SUMMARY TABLE of selected indicators of akz.net, www.total.kz, www.resurs.kz, www.nur.kz. “Electricity Governance Initiative” program TV media: Khabar TV channel, TC Eurasia, TC 31 channel, TC Kazakh, TC 7 channel, TC KTK. SUMMARY TABLE Indicators on the “Political Process” of Management of the Electricity Power Total publications for the period: 13, among them are: 6 (46%) in printed media, 7 (54%) in electronic media Sector in Kazakhstan (figure no. 1) TABLE OF INDICATORS on “Political Process” of the Electricity Power Sector Management in Kazakhstan SUMMARY TABLE indicators on “Regulatory Process” of electricity sector management of Kazakhstan Table of evaluation of “Regulatory Process” indicators of the electricity sector governance in Kazakhstan SUMMARY TABLE of indicators on the evaluation of ecological and social aspects of the Kazakhstan’s electrical power sector management TABLE OF INDICATORS on the evaluation of ecological and social aspects of Kazakhstan’s electricity sector management FILLED PROJECT INDICATORS REGULATORY PROCESS INDICATORS

114 TABLE OF CONTENT Section 1. HISTORY AND CURRENT STATUS OF RATING SELECTION ELECTRIC POWER INDUSTRY ҚАЗАҚША Section 2. DEVELOPMENT OBJECTIVES The rating is not applicable / Not rated Section 3. MAIN PRINCIPLES AND STRATEGIES FOR ELECTRIC POWER INDUSTRY DEVELOPMENT IN THE REPUBLIC OF Report or activity meets none of the quality elements “Low” KAZAKHSTAN

BASIC QUESTIONNAIRE ON INDICATORS Report or activity meets three quality elements “Average to High” ENGLISH Report or activity meets all quality elements “High” SUMMARY TABLE of selected indicators of “Electricity Governance Initiative” program Name of the researcher and organization: Sara Espenova, PF “KAMEDA” SUMMARY TABLE Indicators on the “Political Process” of Management of the Electricity Power Information source: Printed media: Argumenty i Fakty. Kazakhstan (LLP “AiF in Kazakhstan”, weekly public Sector in Kazakhstan political newspaper, circulation over 90 thous copies), Egemen Kazakhstan (official daily governmental newspaper in Kazakh, circulation 135 thous copies), Kazakhstanskaya Pravda (general national newspaper, TABLE OF INDICATORS on “Political Process” of the Electricity Power Sector Management in circulation over 100 thous copies), Vremya (public political newspaper), Komsomolskaya Pravda, Kazakhstan Kazakhstan (LLP “Komsomolskaya Pravda in Kazakhstan”, daily newspaper, circulation over 10 thous copies), OKO, Legal SUMMARY TABLE indicators on “Regulatory Newspaper of Kazakhstan (weekly public political newspaper, circulation over 15 thous copies), “Energetika” Process” of electricity sector management of magazine. Kazakhstan Table of evaluation of “Regulatory Process” indicators of the electricity sector governance in PP 16 CLEARITY OF THE PROCESS OF PUBLIC PARTICIPATION IN DECISION MAKING Kazakhstan Quality Ele- Indica- Explanations SUMMARY TABLE of indicators on the evaluation ments tor of ecological and social aspects of the Kazakhstan’s electrical power sector management Organizers of the events for public discussion of the program “Energy Responsibility TABLE OF INDICATORS on the evaluation of Conservation – 2020” informed the public about the initiation of these ecological and social aspects of Kazakhstan’s for the decisions Yes events and about the authorized state body. The development of the “Energy electricity sector management made Conservation – 2020” is indicated in this program. FILLED PROJECT INDICATORS REGULATORY PROCESS INDICATORS Unfortunately, the information resources that have been represented and the Clear timeframe data on the organization of the “round tables” discussing the program do not for decision No contain any information on whether any clear timeframe was established or making. not; it is usually announced as soon as possible about the need to provide the proposals.

115 TABLE OF CONTENT Clear timeframe Section 1. HISTORY AND CURRENT STATUS OF No data found concerning the clear timeframe for approving the program ELECTRIC POWER INDUSTRY for submission No and, respectively, for submission of proposals by the researchers. ҚАЗАҚША Section 2. DEVELOPMENT OBJECTIVES of the proposals Section 3. MAIN PRINCIPLES AND STRATEGIES FOR ELECTRIC POWER INDUSTRY According to the information provided by NECK “Atameken”, on June 2 of this DEVELOPMENT IN THE REPUBLIC OF year, a “round table” was conducted on the discussion of the draft program KAZAKHSTAN “Energy Conservation – 2020” with the participation of the deputies of the Section 4. “TRANSPARENT TARIFF” CIVIL РУССКИЙ INITIATIVE: Chamber of the Parliament, independent experts, representatives of industry CONTENT AND WAYS OF ministries and other stakeholders. Participants of the “round table” made the IMPLEMENTATION following presentations: 1. The role of Non-Governmental Organizations for Energy Conservation and Increasing the Energy Efficiency in Housing BASIC QUESTIONNAIRE ON INDICATORS Accountability and Utility Sector 2. Safe and Energy-Saving Glazing as One of the Main ENGLISH of the proposals No Directions of the State Strategy of Transition to “Green Economy” 3. State SUMMARY TABLE of selected indicators of submitted Energy Register, Including the Energy Audit Rules and Accreditation Rules “Electricity Governance Initiative” program in the Energy Conservation 4. The Role of ALE “Kazakhstan Association of SUMMARY TABLE Indicators on the “Political Energy Auditors” Implementing the State Policy in Energy Conservation and Process” of Management of the Electricity Power Increasing the Energy Efficiency. Based on the results of this event, there Sector in Kazakhstan was a decision made to conduct similar “round tables” in all the regions of TABLE OF INDICATORS on “Political Process” Kazakhstan. Recommendation to conduct the “round tables” in all the regions of the Electricity Power Sector Management in of Kazakhstan, as found out from the press, was carried out, but it is unknown Kazakhstan if there were any recommendations directly related to the program. SUMMARY TABLE indicators on “Regulatory Process” of electricity sector management of Documenting No information about the exact outcome, resolution, minutes, lists of Kazakhstan the consulting No participants, materials of public hearings and other socially important events Table of evaluation of “Regulatory Process” process found in publicly available sources. indicators of the electricity sector governance in Kazakhstan Public discussion of the program “Energy Conservation – 2020” was SUMMARY TABLE of indicators on the evaluation organized in June by the regional executive bodies and was aimed to provide Well-timed of ecological and social aspects of the information about the document prepared by the Ministry of Industry and dissemination Kazakhstan’s electrical power sector management New Technologies. Already at the end of August, i.e. within three months, the of information Yes TABLE OF INDICATORS on the evaluation of program was approved by the Government. “Round tables” in the regions about the ecological and social aspects of Kazakhstan’s were conducted within a week or two after the Astana event, following the electricity sector management process criterion of advance informing (page 60 EGI-Toolkit), but no time frame was FILLED PROJECT INDICATORS provided. REGULATORY PROCESS INDICATORS Wide dissemination No facts about wide scale information, the online resources report information of information No about the events that were conducted after the fact. about the process

116 TABLE OF CONTENT Target Information about the “round tables” organized indicates that NGO Section 1. HISTORY AND CURRENT STATUS OF ELECTRIC POWER INDUSTRY dissemination representatives, state officials and entrepreneurs were present at the public ҚАЗАҚША Section 2. DEVELOPMENT OBJECTIVES of information Yes events. At the same time, it is not clear e.g. how the groups of entrepreneurs about the and the NGO’s informed the public or those whom they represented in these Section 3. MAIN PRINCIPLES AND STRATEGIES FOR ELECTRIC POWER INDUSTRY process events. DEVELOPMENT IN THE REPUBLIC OF KAZAKHSTAN DETAILED EXPLANATION: The information disseminated by MINT of RK states that “The annual reduction Section 4. “TRANSPARENT TARIFF” CIVIL РУССКИЙ INITIATIVE: in energy consumption by 10% will occur according to the accelerated scenario. To realize this, the Ministry CONTENT AND WAYS OF of Industry and New Technologies, according to the order issued by the Head of the State, is developing a IMPLEMENTATION program called “Energy Conservation 2020”, the project of which is currently being discussed in the regions. The presentations have already been conducted at the public hearings in Eastern Kazakhstan region, as well BASIC QUESTIONNAIRE ON INDICATORS as in Pavlodar and Karaganda, where the representatives of Mayor’s Offices, industrial and utility enterprises, ENGLISH non-governmental organizations and CSC have been present.” (http://www.nomad.su/?a=4-201306110020). SUMMARY TABLE of selected indicators of Thus, in public relations, the emphasis was placed on non-governmental organizations, no references given “Electricity Governance Initiative” program about general public, and there were no data about how this information and public discussions continued at SUMMARY TABLE Indicators on the “Political the initiative of NGO’s with the participation of the public. Process” of Management of the Electricity Power Sector in Kazakhstan On June 3 of this year, the first public hearing to discuss the Program “Energy Conservation 2020” was held in Karaganda City Hall. It was chaired by the Deputy Mayor of Karaganda region S. Idrisov. It was attended by TABLE OF INDICATORS on “Political Process” the representatives of MINT RK, JSC “Kazahhenergoekspertiza”, JSC “Kazakhstan Center for Modernization and of the Electricity Power Sector Management in Kazakhstan Development of Housing and Utility Services”, National Chamber of Housing and Construction, and Kazakhstan Association of Energy Auditors (http://www.kazee.kz/news/v-akimate-goroda-karaganda-proshlo-pervoe-ob- SUMMARY TABLE indicators on “Regulatory Process” of electricity sector management of schest/). Kazakhstan Table of evaluation of “Regulatory Process” indicators of the electricity sector governance in Kazakhstan SUMMARY TABLE of indicators on the evaluation of ecological and social aspects of the Kazakhstan’s electrical power sector management TABLE OF INDICATORS on the evaluation of ecological and social aspects of Kazakhstan’s electricity sector management FILLED PROJECT INDICATORS REGULATORY PROCESS INDICATORS

117 TABLE OF CONTENT Section 1. HISTORY AND CURRENT STATUS OF RATING SELECTION ELECTRIC POWER INDUSTRY ҚАЗАҚША Section 2. DEVELOPMENT OBJECTIVES The rating is not applicable / Not rated Section 3. MAIN PRINCIPLES AND STRATEGIES FOR ELECTRIC POWER INDUSTRY DEVELOPMENT IN THE REPUBLIC OF Decision making process does not meet any of quality elements “Low” KAZAKHSTAN

Section 4. “TRANSPARENT TARIFF” CIVIL Decision making process meets 1-2 quality elements “Low to Average” РУССКИЙ INITIATIVE: CONTENT AND WAYS OF IMPLEMENTATION Decision making process meets 3-4 quality elements “Average”

BASIC QUESTIONNAIRE ON INDICATORS Decision making process meets 5-6 quality elements “Average to High” ENGLISH Decision making process meets 7-8 quality elements “High” SUMMARY TABLE of selected indicators of “Electricity Governance Initiative” program Name and organization of the researcher: Tnaliev Ulugbek Serikovich, Public Fund “Center for Budget Analysis SUMMARY TABLE Indicators on the “Political and Economic Monitoring” Process” of Management of the Electricity Power Sector in Kazakhstan Information source: Websites of the authorized state bodies (http://www.primeminister.kz/blog/view/327,), NEC “Atameken Union” (http://atamekenunion.kz/expert/out, http://atamekenunion.kz/tops/view/2347), news TABLE OF INDICATORS on “Political Process” of the Electricity Power Sector Management in services (http://www.zakon.kz/4556412-serik-akhmetov-poruchil-razrabotat-i.html, http://www.nomad. Kazakhstan su/?a=3-201308280018, http://www.bnews.kz/ru/news/post/145275/) and the legislation (http://adilet.zan. SUMMARY TABLE indicators on “Regulatory kz/rus/docs/Z1200000541, http://adilet.zan.kz/rus/docs/P1300000904). Process” of electricity sector management of Kazakhstan Table of evaluation of “Regulatory Process” indicators of the electricity sector governance in Kazakhstan SUMMARY TABLE of indicators on the evaluation of ecological and social aspects of the Kazakhstan’s electrical power sector management TABLE OF INDICATORS on the evaluation of ecological and social aspects of Kazakhstan’s electricity sector management FILLED PROJECT INDICATORS REGULATORY PROCESS INDICATORS

118 TABLE OF CONTENT PP 17 Section 1. HISTORY AND CURRENT STATUS OF PUBLIC INFORMATION ABOUT THE BASIS OF POLITICAL REFORM AND ITS ELECTRIC POWER INDUSTRY PURPOSES ҚАЗАҚША Section 2. DEVELOPMENT OBJECTIVES Quality Ele- Indica- Section 3. MAIN PRINCIPLES AND STRATEGIES Explanations FOR ELECTRIC POWER INDUSTRY ments tor DEVELOPMENT IN THE REPUBLIC OF KAZAKHSTAN

Section 4. “TRANSPARENT TARIFF” CIVIL The level of public participation in the decision making processes and par- РУССКИЙ INITIATIVE: ticipation in the discussions on the development of electricity sector re- CONTENT AND WAYS OF IMPLEMENTATION mains low. The decisions on reforming, modernization, planning in this sector are made by the authorized state body, by the representatives of business Wide availability entities from the energy sector and by the National Economic Chamber of BASIC QUESTIONNAIRE ON INDICATORS of documenta- No

Kazakhstan “Atameken Union”. The main documents on the industry develop- ENGLISH tion ment in medium and long terms are available to the public: the Electricity SUMMARY TABLE of selected indicators of Sector Development Program until 2014, Program “Energy Conservation – “Electricity Governance Initiative” program 2020”, the Concept of the RK Transition to “Green Economy” for 2013-2020, SUMMARY TABLE Indicators on the “Political and other documents. Process” of Management of the Electricity Power Sector in Kazakhstan Information about the electricity sector should be available at the websites TABLE OF INDICATORS on “Political Process” of the authorized state bodies like the Ministry of Industry and New Tech- of the Electricity Power Sector Management in nologies and the Committee for State Energy Supervision and Control under Kazakhstan MINT RK. Although the documents may be found at the websites of these SUMMARY TABLE indicators on “Regulatory state bodies, they are on different pages, and this makes them difficult to ac- Process” of electricity sector management of Easy access No cess. E.g. on the website of MINT RK, the industry program is in the section Kazakhstan of Industrialization Program – subsection of Industry Programs – where the Table of evaluation of “Regulatory Process” program is to be found; and the Program “Energy Conservation – 2020” is in indicators of the electricity sector governance in Kazakhstan the section of Program Documents, and then in its subsection. On the website of the Committee, the Program “Energy Conservation – 2020” is missing, SUMMARY TABLE of indicators on the evaluation but the sector’s program for industry development to 2014 is posted. of ecological and social aspects of the Kazakhstan’s electrical power sector management Websites of state bodies do not contain updated information on the stages TABLE OF INDICATORS on the evaluation of of implementation of the industry and other programs. The website of MINT ecological and social aspects of Kazakhstan’s electricity sector management RK contains the report on the implementation of the Electricity Sector De- velopment Program to 2014 for the first half of 2012. The public is informed Timeliness of FILLED PROJECT INDICATORS No mostly at the stage of the program’s approval by the central executive bod- availability REGULATORY PROCESS INDICATORS ies, that’s why the participation of general public at the stage of decision making is complicated. At the same time, the Committee’s website contains the draft orders, as well as the other laws and regulations, and this allows the public to send comments and suggestions.

119 TABLE OF CONTENT Availability of information on the stage of the sector’s reforming and privati- Section 1. HISTORY AND CURRENT STATUS OF ELECTRIC POWER INDUSTRY zation was severely limited. Now there is information on some laws and regulations that are under consideration. The stakeholders from the economic ҚАЗАҚША Section 2. DEVELOPMENT OBJECTIVES Availability for Yes entities of the electricity sector and NEC “Atameken Union” participate in de- Section 3. MAIN PRINCIPLES AND STRATEGIES stakeholders FOR ELECTRIC POWER INDUSTRY cision making processes at the stage of commenting, objecting and proposal DEVELOPMENT IN THE REPUBLIC OF submitting; although, the final results of that participation is unknown, be- KAZAKHSTAN cause the process is not fully transparent Section 4. “TRANSPARENT TARIFF” CIVIL РУССКИЙ INITIATIVE: CONTENT AND WAYS OF DETAILED EXPLANATION: Legislation on the access to information, mainly the RK Law dated 2/01/2007 “On IMPLEMENTATION Consideration Procedure for the Appeals from Individuals and Legal Entities”, allows obtaining information from the state bodies. Where required by law, all laws and regulations must undergo a public discussion, the BASIC QUESTIONNAIRE ON INDICATORS websites of the Committee and the Ministry of Justice of the RK contain the draft laws and regulations to be ENGLISH commented and discussed by the public; but the existing system does not allow to trace the comments and SUMMARY TABLE of selected indicators of their impact on the final decision made by a state body, and whether they are included into the relevant laws “Electricity Governance Initiative” program and regulations, or not. Regarding the draft program “Energy Conservation – 2020”, the discussion of the re- SUMMARY TABLE Indicators on the “Political gions is noted in the press, but mass media did not provide any recommendations and comments from the Process” of Management of the Electricity Power public concerning the proposed program. Also, according to the information given in the press, the public de- Sector in Kazakhstan bates started at the beginning of June, while the program was adopted at the end of August; the researchres TABLE OF INDICATORS on “Political Process” did not find any evidence of the influence made by the public debates on this governmental program. of the Electricity Power Sector Management in Kazakhstan RATING SELECTION SUMMARY TABLE indicators on “Regulatory Process” of electricity sector management of Not assessable / Not assessed Kazakhstan Table of evaluation of “Regulatory Process” No information about the documents that form the base for political decision “Low” indicators of the electricity sector governance in Kazakhstan Information available to the public meets 1-2 quality elements “Average” SUMMARY TABLE of indicators on the evaluation of ecological and social aspects of the Information available to the public meets 3-4 quality elements “High” Kazakhstan’s electrical power sector management

TABLE OF INDICATORS on the evaluation of Name and organization of the researcher: Tnaliev Ulugbek Serikovich, Public Fund “Center for Budget Analysis ecological and social aspects of Kazakhstan’s electricity sector management and Economic Monitoring” FILLED PROJECT INDICATORS Information source: Legislation and other laws and regulations of the Republic of Kazakhstan, websites of the Ministry of Industry and New Technologies of the Republic of Kazakhstan (http://www.mint.gov.kz); the REGULATORY PROCESS INDICATORS Committee for State Energy Supervision and Control (http://www.kgen.gov.kz); the Ministry of Justice of the Republic of Kazakhstan (http://www.adilet.zan.kz), the news sources: http://oilnews.kz/1/novosti/novosti-tek- kazaxstana/proekt-programmy-energosberezhenie-2020-obsuzhdaetsya-v-regionax-kazaxstana/

120 TABLE OF CONTENT PP 18 Section 1. HISTORY AND CURRENT STATUS OF EFFICIENCY OF THE PUBLIC PARTICIPATION PROCESS ELECTRIC POWER INDUSTRY ҚАЗАҚША Quality Ele- Indica- Section 2. DEVELOPMENT OBJECTIVES Explanations ments tor Section 3. MAIN PRINCIPLES AND STRATEGIES FOR ELECTRIC POWER INDUSTRY DEVELOPMENT IN THE REPUBLIC OF The Ministry of Industry and New Technologies and the Committee for State KAZAKHSTAN Energy Supervision and Control under MINT RK together with the regional ex- Section 4. “TRANSPARENT TARIFF” CIVIL РУССКИЙ Volume of par- ecutives held activities to discuss the program “Energy Conservation – 2020”, INITIATIVE: No CONTENT AND WAYS OF ticipation but the volume, quality and breadth of the public and NGO representation IMPLEMENTATION are unknown. No information about attracting the general public to discuss the Concept of Transition to “Green Economy” exists according to the data. BASIC QUESTIONNAIRE ON INDICATORS ENGLISH In the practice of state bodies, the main subjects engaged in discussions on Breadth of par- draft laws and regulations are business entities and specialized national as- SUMMARY TABLE of selected indicators of No “Electricity Governance Initiative” program ticipation sociations. The breadth of public participation in the process of discussing SUMMARY TABLE Indicators on the “Political laws and regulations remains low, close to zero. Process” of Management of the Electricity Power Sector in Kazakhstan The researchers could not find any summaries of meetings and consultations Results of public No with the public, as well as any recommendations and comments, in docu- TABLE OF INDICATORS on “Political Process” participation of the Electricity Power Sector Management in ments accompanying these laws and regulations. Kazakhstan The laws and regulations developed by central executives are usually enact- SUMMARY TABLE indicators on “Regulatory Response to ed by the government or by the legislative branch of government as per the Process” of electricity sector management of public participa- No Kazakhstan relevant procedures and regulations. At the same time, there is no case of tion Table of evaluation of “Regulatory Process” rejection of the electricity laws and regulations based on public objections. indicators of the electricity sector governance in Kazakhstan SUMMARY TABLE of indicators on the evaluation of ecological and social aspects of the Kazakhstan’s electrical power sector management TABLE OF INDICATORS on the evaluation of ecological and social aspects of Kazakhstan’s electricity sector management FILLED PROJECT INDICATORS REGULATORY PROCESS INDICATORS

121 TABLE OF CONTENT DETAILED EXPLANATION: According to the information provided by the Chairman of the Committee for State Section 1. HISTORY AND CURRENT STATUS OF ELECTRIC POWER INDUSTRY Energy Supervision and Control under MINT RK Mr. Turlubek A. A., the basic law “On Electric Power Industry” ҚАЗАҚША Section 2. DEVELOPMENT OBJECTIVES has been adopted in 2004, and now there is a new bill being developed, which is included into the legislative work plan for 2013. Within the framework of rule-making activity in the electricity sector, there were 48 laws Section 3. MAIN PRINCIPLES AND STRATEGIES FOR ELECTRIC POWER INDUSTRY and regulations developed, and among them more than 30 fundamental ones have already been enacted (the DEVELOPMENT IN THE REPUBLIC OF new legal institutions have been introduced, such as state technical inspector, standard operational fuel re- KAZAKHSTAN serve, passport for the readiness of energy organizations to work in the autumn and winter period; certification Section 4. “TRANSPARENT TARIFF” CIVIL РУССКИЙ INITIATIVE: of managers and experts in the energy organizations; accreditation of the organizations for conducting en- CONTENT AND WAYS OF ergy expertise and accreditation of electric laboratories, and number of other legal institutions; the new types IMPLEMENTATION of administrative offence are included into Administrative Offences Code). At the same time, this informative article does not tell about the participation of general public in the decision making processes, or about the BASIC QUESTIONNAIRE ON INDICATORS

way in which the public could have or had the influence on the decisions made. The section concerning the ENGLISH energy literacy states that “More than 104 open public lessons on energy conservation have been conducted SUMMARY TABLE of selected indicators of at the schools all over the country”, page 55, by J. Bakatova, the general manager of strategic analysis depart- “Electricity Governance Initiative” program ment of JSC “Kazenergoekspertiza”, and that “an extensive information campaign has been held, but this work SUMMARY TABLE Indicators on the “Political has been done to promote the energy conservation and to conduct the training activities”. Process” of Management of the Electricity Power Sector in Kazakhstan RATING SELECTION TABLE OF INDICATORS on “Political Process” of the Electricity Power Sector Management in The rating is not applicable / Not rated Kazakhstan SUMMARY TABLE indicators on “Regulatory The process of policy development does not meet any quality element “Low” Process” of electricity sector management of Kazakhstan The process of policy development meets 1 quality element “Low to Average” Table of evaluation of “Regulatory Process” indicators of the electricity sector governance in The process of policy development meets 2 quality elements “Average” Kazakhstan The process of policy development meets 3 quality elements “Average to High” SUMMARY TABLE of indicators on the evaluation of ecological and social aspects of the Kazakhstan’s electrical power sector management The process of policy development meets 4 quality elements “High” TABLE OF INDICATORS on the evaluation of ecological and social aspects of Kazakhstan’s Name and organization of the researcher: Tnaliev Ulugbek Serikovich, Public Fund “Center for Budget Analysis electricity sector management and Economic Monitoring” FILLED PROJECT INDICATORS Information source: Elektroenergetika Kazakhstana, information and analytic magazine, issue 1, 2013 (http:// REGULATORY PROCESS INDICATORS www.kgen.gov.kz/images/part_1_2013.rar); legislation and other laws and regulations of the Republic of Ka- zakhstan, websites of the Ministry of Industry and New Technologies (http://www.mint.gov.kz) and the Com- mittee for State Energy Supervision and Control (http://www.kgen.gov.kz).

122 TABLE OF CONTENT PP 19 Section 1. HISTORY AND CURRENT STATUS OF CONSIDERATION OF ENVIRONMENTAL ISSUES IN THE SECTOR OF LEGISLATION AND ELECTRIC POWER INDUSTRY POLICY REFORMS ҚАЗАҚША Section 2. DEVELOPMENT OBJECTIVES Quality ele- Indica- Section 3. MAIN PRINCIPLES AND STRATEGIES Explanation FOR ELECTRIC POWER INDUSTRY ments tor DEVELOPMENT IN THE REPUBLIC OF KAZAKHSTAN

Consideration РУССКИЙ Section 4. “TRANSPARENT TARIFF” CIVIL Policy documents on economic reforms and transition to the “Green” way of INITIATIVE: of the issues in Yes development contain a separate block devoted to the electricity sector and CONTENT AND WAYS OF fundamental IMPLEMENTATION energy conservation. documents BASIC QUESTIONNAIRE ON INDICATORS

Inclusion of ENGLISH Included into the Concept of Transition of the Republic of Kazakhstan to policy and laws Yes “Green Economy” and in the industry program Zhasyl Damu. SUMMARY TABLE of selected indicators of into reforms “Electricity Governance Initiative” program SUMMARY TABLE Indicators on the “Political Mitigation of the direct im- Included into the Concept of Transition of the Republic of Kazakhstan to Process” of Management of the Electricity Power Yes Sector in Kazakhstan pact of the en- “Green Economy” and in the industry program Zhasyl Damu. TABLE OF INDICATORS on “Political Process” ergy sector of the Electricity Power Sector Management in Kazakhstan Global and economic conse- SUMMARY TABLE indicators on “Regulatory One of the main political trends in the area of environmental protection is Process” of electricity sector management of quences of the Yes the transition to low-carbon way of economic development. Kazakhstan environmental Table of evaluation of “Regulatory Process” impact indicators of the electricity sector governance in Kazakhstan DETAILED EXPLANATION: Electric power industry in Kazakhstan is represented mostly by the coal thermal SUMMARY TABLE of indicators on the evaluation power plant, so this is the main source of greenhouse gas emissions. The State Industry Program for the En- of ecological and social aspects of the vironmental Protection Program “Zhasyl Damu” for 2010-2014 states that the greatest contribution into the Kazakhstan’s electrical power sector management volume of carbon dioxide emissions is made by the power industry and, among the energy sources, by coal, TABLE OF INDICATORS on the evaluation of and the estimates show that the share of coal in emission generation will grow extensively. By 2020, it will ecological and social aspects of Kazakhstan’s be 66 % of the total gross emissions generated as a result of fuel combustion. The program Zhasyl Damu and electricity sector management the Concept of Transition to “Green Economy” includes the organizational arrangements to reduce the envi- FILLED PROJECT INDICATORS ronmental impact of the electricity sector. REGULATORY PROCESS INDICATORS In 1997, the Ministry of Industry and New Technologies adopted the Energy Conservation Act, which provides for basic principles of energy conservation policy. According to the report on the analysis of the efficiency of central and local executives’ activities in the area of technological development prepared by JSC “National Agency for Technological Development” in 2012, it was noted that all of the studied policy documents and strategic plans of the Ministries and departments are focused on the introduction of innovations and resource-power saving technologies.

123 TABLE OF CONTENT Section 1. HISTORY AND CURRENT STATUS OF RATING SELECTION ELECTRIC POWER INDUSTRY ҚАЗАҚША Section 2. DEVELOPMENT OBJECTIVES The rating is not applicable / Not rated Section 3. MAIN PRINCIPLES AND STRATEGIES FOR ELECTRIC POWER INDUSTRY DEVELOPMENT IN THE REPUBLIC OF Consideration of the environmental impact meets none of the quality elements “Low” KAZAKHSTAN

Section 4. “TRANSPARENT TARIFF” CIVIL Consideration of the environmental impact meets one quality element “Low to Average” РУССКИЙ INITIATIVE: CONTENT AND WAYS OF IMPLEMENTATION Consideration of the environmental impact meets two quality elements “Average”

BASIC QUESTIONNAIRE ON INDICATORS Consideration of the environmental impact meets three quality elements “Average to High” ENGLISH Consideration of the environmental impact meets four or more quality elements “High” SUMMARY TABLE of selected indicators of “Electricity Governance Initiative” program Name of the researcher and organization: Vadim Litvinov, expert of Ecology-Youth-Initiative-Development PF, SUMMARY TABLE Indicators on the “Political member of Republican Association NGO “Transparent Tariff”. Process” of Management of the Electricity Power Sector in Kazakhstan Information source: State Program of Accelerated Industrial and Innovative Development of the Republic of Ka- zakhstan for 2010-2014 dated 19 March 2010, No. 958, Industry Program “Zhasyl Damu” for 2010-2014, Strategic TABLE OF INDICATORS on “Political Process” of the Electricity Power Sector Management in Plan of the Ministry of Environment of the Republic of Kazakhstan for 2011-2015, the Program “Regional Devel- Kazakhstan opment” approved by the Resolution of the Government of the Republic of Kazakhstan dated 26 July 2011 No. SUMMARY TABLE indicators on “Regulatory 862, the program “Business Road Map 2020” approved by the Resolution of the Government of the Republic of Process” of electricity sector management of Kazakhstan dated 13 April 2010 No. 301, Strategic Plan of the Ministry of Industry and New Technologies of the Kazakhstan Republic of Kazakhstan 2010-2014, the Program on Nuclear Industry Development in the Republic of Kazakhstan Table of evaluation of “Regulatory Process” for 2011-2014 with the prospect for development to 2020, Strategic Plan of the Nuclear Energy Agency of the RK, indicators of the electricity sector governance in Strategic Plan of the RK Agency Construction, Housing and Utilities for 2011 – 2015. Kazakhstan Additional l information: In spite of the high score of this indicator, it is necessary to note that due to the lack SUMMARY TABLE of indicators on the evaluation of interaction with the public, without enlisting public support, implementation of the best strategies may fail of ecological and social aspects of the Kazakhstan’s electrical power sector management because of the public reluctance to participate in the implementation of these “strange” plans. Analysis of other indicators often shows that this is what happens. By the word public we understand it to mean a wide range of TABLE OF INDICATORS on the evaluation of individuals (including the business and investment communities). ecological and social aspects of Kazakhstan’s electricity sector management FILLED PROJECT INDICATORS REGULATORY PROCESS INDICATORS

124 TABLE OF CONTENT PP 21 Section 1. HISTORY AND CURRENT STATUS OF TRANSPARENT FORMULATION OF THE POLICY IN THE AREA OF INDEPENDENT ELECTRIC POWER INDUSTRY ENERGY PROCUCERS ҚАЗАҚША Section 2. DEVELOPMENT OBJECTIVES Quality Ele- Indica- Section 3. MAIN PRINCIPLES AND STRATEGIES Explanation FOR ELECTRIC POWER INDUSTRY ments tor DEVELOPMENT IN THE REPUBLIC OF KAZAKHSTAN

Section 4. “TRANSPARENT TARIFF” CIVIL National policy concerning the IEP’s is subject to the legislative control and РУССКИЙ INITIATIVE: consideration by discussion connected with the changes in current legisla- CONTENT AND WAYS OF IMPLEMENTATION tion. The issues of national policy concerning the IEP’s are reflected in the Resolution of the Government of the Republic of Kazakhstan dated 28 Sep- Legislative ap- Yes tember 1996 “On Some Measures for Restructuring of Power System Manage- BASIC QUESTIONNAIRE ON INDICATORS proval

ment in the Republic of Kazakhstan” and in the Program for Electricity Sector ENGLISH Development in the Republic of Kazakhstan for 2010 – 2014 approved by the SUMMARY TABLE of selected indicators of Resolution of the Government of the Republic Kazakhstan dated 29 October “Electricity Governance Initiative” program 2010. SUMMARY TABLE Indicators on the “Political Process” of Management of the Electricity Power According to Article 5 of the Law “On Private Entrepreneurship” dated 31 Sector in Kazakhstan January 2006, since 1 July 2006, the business community is entitled to par- TABLE OF INDICATORS on “Political Process” ticipate in the development of laws and regulations affecting the interests of the Electricity Power Sector Management in of business. According to this article, the central state, local government rep- Kazakhstan resentative and executive bodies are obliged to submit the draft laws and SUMMARY TABLE indicators on “Regulatory regulations affecting the interests of private entrepreneurs to the accredited Process” of electricity sector management of associations of private enterprises and to the National Chamber of Entre- Kazakhstan preneurs of the Republic of Kazakhstan through the advisory boards with Table of evaluation of “Regulatory Process” a mandatory application of explanatory note to receive an expert opinion, indicators of the electricity sector governance in included each time when the draft must be agreed on again. Kazakhstan Public consul- SUMMARY TABLE of indicators on the evaluation tations in the According to the same law, p. 4, the expert opinions must be attached to the Yes of ecological and social aspects of the course of policy draft law or regulation before its adoption, including each time when the Kazakhstan’s electrical power sector management development draft must be agreed with the governmental stakeholders again. Preliminary TABLE OF INDICATORS on the evaluation of documents available to the public: According to Art. 5, p. 8 of the Law “On Pri- ecological and social aspects of Kazakhstan’s vate Entrepreneurship” the draft laws and regulations affecting the interests electricity sector management of private entrepreneurs, must be published (disseminated) in mass media, FILLED PROJECT INDICATORS including Internet sources, prior to their consideration by the relevant authority or at the meeting of the expert council. Interested persons can leave REGULATORY PROCESS INDICATORS their comments on the draft law at the website of the Ministry of Justice of the RK http://www.adilet.gov.kz/ru/node/43435. The expert opinions of the National Economic Chamber of Kazakhstan “Atameken Union” are available on the association’s website in the Expert Opinions Register http : // atamekenunion.kz/expert/out?p=0 .

125 TABLE OF CONTENT The structure of the policy requires providing IEP projects, among other Section 1. HISTORY AND CURRENT STATUS OF ELECTRIC POWER INDUSTRY things, on a competitive basis. ҚАЗАҚША Section 2. DEVELOPMENT OBJECTIVES Centralized electricity tenders are conducted in accordance with the Rules Competitive Section 3. MAIN PRINCIPLES AND STRATEGIES Yes for Organization and Functioning of the Centralized Electricity Tenders in the FOR ELECTRIC POWER INDUSTRY tendering DEVELOPMENT IN THE REPUBLIC OF Republic of Kazakhstan approved by the Order of Acting Minister of Energy KAZAKHSTAN and Mineral Resources of the Republic of Kazakhstan dated 10 September

Section 4. “TRANSPARENT TARIFF” CIVIL 2004. The operator at centralized electricity trading market is the Joint Stock РУССКИЙ INITIATIVE: CONTENT AND WAYS OF Company “Kazakhstan Operator of Electric Energy and Power Market”. IMPLEMENTATION The analysis of the demand and supply scenario is reflected in the Strategic BASIC QUESTIONNAIRE ON INDICATORS Plan of the Ministry of Industry and New Technologies of the Republic of

Adequate analy- Kazakhstan for 2011-2015, approved by the Resolution of the Government ENGLISH Yes sis of demand of the Republic of Kazakhstan dated 8 February 2011. The Strategic Plan is SUMMARY TABLE of selected indicators of published on the official website of the Ministry of Industry and New Tech- “Electricity Governance Initiative” program nologies of the Republic of Kazakhstan. SUMMARY TABLE Indicators on the “Political Process” of Management of the Electricity Power Disclosure of Sector in Kazakhstan the electric The terms of final agreements on electric power purchase from the indepen- No TABLE OF INDICATORS on “Political Process” power purchase dent energy producers are not published. of the Electricity Power Sector Management in agreements Kazakhstan SUMMARY TABLE indicators on “Regulatory The detailed analysis of the impact of agreements on electric power pur- Process” of electricity sector management of chase from independent energy producers on the prices is not available to Kazakhstan Financial impact No the public. Table of evaluation of “Regulatory Process” analysis indicators of the electricity sector governance in The method of rate calculation (in particular, the X-factor values) isn’t trans- Kazakhstan parent. SUMMARY TABLE of indicators on the evaluation of ecological and social aspects of the Adequate public Kazakhstan’s electrical power sector management consultations The law does not require public consultation before approving the electric No TABLE OF INDICATORS on the evaluation of before the proj- power purchase agreements with IEP. ecological and social aspects of Kazakhstan’s ect’s approval electricity sector management FILLED PROJECT INDICATORS REGULATORY PROCESS INDICATORS

126 TABLE OF CONTENT DETAILED EXPLANATION: During the restructuring of electric power industry, the Resolution of the Govern- Section 1. HISTORY AND CURRENT STATUS OF ELECTRIC POWER INDUSTRY ment of the Republic of Kazakhstan “On Additional Measures to Improve the Efficiency of the Wholesale Mar- ҚАЗАҚША Section 2. DEVELOPMENT OBJECTIVES ket of Electric Energy and Power in the Republic of Kazakhstan” dated 20.04.2000 engendered the creation of Closed Joint Stock Company “Kazakhstan Operator of Electric Energy and Power Market” (JSC “KOEEPM”) with Section 3. MAIN PRINCIPLES AND STRATEGIES FOR ELECTRIC POWER INDUSTRY a 100% participation of the state in its registered capital and for the function of organizing and conducting DEVELOPMENT IN THE REPUBLIC OF the centralized “day-ahead” tenders, drawing daily schedules and actual balances of the electricity supply/ KAZAKHSTAN consumption. The JSC “KOEEPM” was established by the Committee for State Property and Privatization of the Section 4. “TRANSPARENT TARIFF” CIVIL РУССКИЙ INITIATIVE: Ministry of Finance of the Republic of Kazakhstan. According to the acceptance and transfer certificate dated CONTENT AND WAYS OF 04/10/2000 No. 12, the ownership and use of rights for the state share package of JSC “KOEEPM” have been IMPLEMENTATION transferred to the Ministry of Energy, Industry and Trade of the Republic of Kazakhstan (now the Ministry of En- ergy and Mineral Resources of the Republic of Kazakhstan). According to the Order of MEMR dated 12/03/04 BASIC QUESTIONNAIRE ON INDICATORS

“On the Approval of Amended Charter of JSC “KOEEPM”, JSC “KOEEPM” was reorganized into a corporation. By ENGLISH issuing an Order dated 23 September 2005, the Competition Protection Committee amended the registry so SUMMARY TABLE of selected indicators of as to change the service of “organization of centralized tenders for present (spot) and balancing electric en- “Electricity Governance Initiative” program ergy and power” for the service of “ensuring the readiness of trading system to conduct the centralized elec- SUMMARY TABLE Indicators on the “Political tricity tenders; organizing and conducting centralized electricity tenders” with 100% share of dominance. In Process” of Management of the Electricity Power 2004, in order to realize the Concept of Further Development of Market Relations in Electric Power Industry Sector in Kazakhstan of the Republic of Kazakhstan, approved by the Resolution of the Government of the Republic of Kazakhstan TABLE OF INDICATORS on “Political Process” dated 18 February 2004, the Ministry of Energy and Mineral Resources issued the Order No. 54 dated 4 March of the Electricity Power Sector Management in 2004, according to which JSC “KOEEPM” was appointed as an operator of centralized electric energy trading Kazakhstan market. According to pp. 2, Art. 15 of the Law “On Electric Power Industry”, the operator of centralized electric SUMMARY TABLE indicators on “Regulatory energy trading market has the following functions: Process” of electricity sector management of Kazakhstan • organizing and conducting spot-tenders Table of evaluation of “Regulatory Process” • organizing and conducting centralized electricity tenders in the medium (week, month) and long term indicators of the electricity sector governance in (quarter, year) periods Kazakhstan • provision of equal access to centralized electric energy trading market for entities from the wholesale SUMMARY TABLE of indicators on the evaluation of ecological and social aspects of the electric energy market Kazakhstan’s electrical power sector management • determining whether the wholesale electric energy market meets the requirements established by the TABLE OF INDICATORS on the evaluation of rules of centralized electric energy trading ecological and social aspects of Kazakhstan’s electricity sector management • registration and accounting of the transactions for electric energy sale at the centralized electricity FILLED PROJECT INDICATORS tenders REGULATORY PROCESS INDICATORS • providing, within the limits its competence, entities from the wholesale electric energy market with information on indicative prices for electricity prevailing at the centralized tenders and with the other market information. It is necessary to note that according to the methodology, this indicator only considers the legal base for independent producers. Practical implementation of these principles is described in PP 25.

127 TABLE OF CONTENT Section 1. HISTORY AND CURRENT STATUS OF RATING SELECTION ELECTRIC POWER INDUSTRY ҚАЗАҚША Section 2. DEVELOPMENT OBJECTIVES The rating is not applicable / Not rated Section 3. MAIN PRINCIPLES AND STRATEGIES FOR ELECTRIC POWER INDUSTRY DEVELOPMENT IN THE REPUBLIC OF Report or activity meets none of the quality elements “Low” KAZAKHSTAN

BASIC QUESTIONNAIRE ON INDICATORS Report or activity meets three quality elements “Average to High” ENGLISH Report or activity meets all quality elements “High” SUMMARY TABLE of selected indicators of “Electricity Governance Initiative” program Name of the researcher and organization: Kurmanbaeva A. A. PA “Committee for Public Control over the Execu- SUMMARY TABLE Indicators on the “Political tion of State Programs at the Local Level” Process” of Management of the Electricity Power Sector in Kazakhstan Information source: Review of the power industry in Kazakhstan http://large.stanford.edu/courses/2010/ TABLE OF INDICATORS on “Political Process” ph240/sagatov1/docs/kaz_energy_resources_ru.pdf, Program for the Price Policy in the Republic of Kazakhstan of the Electricity Power Sector Management in for 2010 – 2014 https://www.google.kz/url?sa=t&rct=j&q=&esrc=s&source=web&cd=2&cad=rja&ved=0CC8 Kazakhstan QFjAB&url=http%3A%2F%2Fwww.economy.kz%2Fsgp%2F2030%2Ftarif.doc&ei=Cc5dUoepIOSD4AS454HQ SUMMARY TABLE indicators on “Regulatory Bw&usg=AFQjCNFYSJpNM2LNmp58_3ANYrYrOsfTNA&bvm=bv.54176721,d.bGE, Joint Stock Company “Ka- Process” of electricity sector management of zakhstan Operator of Electric Energy and Power Market”, http://www.korem.kz/, Information and Legal System Kazakhstan of Laws and Regulations of the Republic of Kazakhstan: the Law of the Republic of Kazakhstan dated 31 Janu- Table of evaluation of “Regulatory Process” ary 2006 “On Private Entrepreneurship”, http://adilet.zan.kz/rus/docs/Z060000124_, the Draft Law “On Amend- indicators of the electricity sector governance in ments and Additions to Some Legislative Acts of the Republic of Kazakhstan on the Energy Conservation and Kazakhstan Energy Efficiency”, the Expert Opinions Register of the National Economic Chamber of Kazakhstan “Atame- SUMMARY TABLE of indicators on the evaluation ken Union”, http://atamekenunion.kz/expert/out?p=0, Report on the Electricity Market Research to Assess the of ecological and social aspects of the Kazakhstan’s electrical power sector management Competition, http://www.es-c.org/files/konkurenciya2005_3.pdf, Information and Legal System of Laws and Regulations of the Republic of Kazakhstan “On Strategic Plan of the Ministry of Industry and New Technologies TABLE OF INDICATORS on the evaluation of ecological and social aspects of Kazakhstan’s of the Republic of Kazakhstan for 2011-2015”, http://adilet.zan.kz/rus/docs/P1100000102, Information and electricity sector management Legal System of Laws and Regulations of the Republic of Kazakhstan “On Some Measures for Restructuring FILLED PROJECT INDICATORS of Power System Management in the Republic of Kazakhstan”, http://adilet.zan.kz/rus/docs/P960001188_, the Rules for Organization and Functioning of the Centralized Electricity Tenders in the Republic of Kazakhstan, REGULATORY PROCESS INDICATORS http://www.kegoc.kz/useful_info/legal_acts/prikaz_10-09-2004.

128 TABLE OF CONTENT PP 23 Section 1. HISTORY AND CURRENT STATUS OF TRANSPARENCY OF DONORS’ INVOLVEMENT THROUGH THE LOANS PROVIDED FOR ELECTRIC POWER INDUSTRY POLICY REASONS ҚАЗАҚША Section 2. DEVELOPMENT OBJECTIVES Quality Ele- Indica- Section 3. MAIN PRINCIPLES AND STRATEGIES Explanation FOR ELECTRIC POWER INDUSTRY ments tor DEVELOPMENT IN THE REPUBLIC OF KAZAKHSTAN

The main donors are EBRD and IBRD. Donor organizations observe the trans- РУССКИЙ Section 4. “TRANSPARENT TARIFF” CIVIL INITIATIVE: parency of political position. CONTENT AND WAYS OF IMPLEMENTATION The EBRD website contains the following documents: Strategy for Kazakh- stan, Political Aspects of EBRD Mandate, Report on the Application of Pub- BASIC QUESTIONNAIRE ON INDICATORS lic Information Principles in 2012, Recommendations and Definitions for Private Sector Entities. Principles and procedures of enforcement actions, ENGLISH Agreement on Mutual Application of the Decisions to Terminate Relations, Transparency of SUMMARY TABLE of selected indicators of Policy on Concerning the Risks of Fraudulent Operation, Procurement Princi- “Electricity Governance Initiative” program political posi- Yes ples and Rules for Goods, Works and Services, Standard Bidding Documents tion SUMMARY TABLE Indicators on the “Political and Guidance for Their Application, EBRD’s Policy Concerning the Environ- Process” of Management of the Electricity Power Sector in Kazakhstan ment, Public Informing Principles, Environmental and Social Policy, Evalua- tion Policy, Results of Public Consultations, Complaint Mechanism, Industry TABLE OF INDICATORS on “Political Process” of the Electricity Power Sector Management in Strategy for Energy Sector. Kazakhstan The World Bank’s website contains the World Bank Policy Concerning the Ac- SUMMARY TABLE indicators on “Regulatory cess to Information, the Appeal Procedure, bank search engine for more than Process” of electricity sector management of 100 papers and reports, more than 10,000 projects and operations. Kazakhstan Table of evaluation of “Regulatory Process” Transparency of EBRD and IBRD websites contain information on loans; there are tools for Yes indicators of the electricity sector governance in conditions calling up the project documents. Kazakhstan SUMMARY TABLE of indicators on the evaluation Transparency No information on the mechanisms of loan evaluation: i.e. the criteria, pos- of ecological and social aspects of the of evaluation No sibility of external loan and evaluation results are not available. Kazakhstan’s electrical power sector management mechanisms TABLE OF INDICATORS on the evaluation of ecological and social aspects of Kazakhstan’s electricity sector management FILLED PROJECT INDICATORS REGULATORY PROCESS INDICATORS

129 TABLE OF CONTENT DETAILED EXPLANATION: The funds were borrowed for the following projects: “Modernization of Kazakhstan Section 1. HISTORY AND CURRENT STATUS OF ELECTRIC POWER INDUSTRY National Power Grid” – $ 185 mln borrowed from IBRD and EBRD; “Construction of Second 500 kV Transmis- ҚАЗАҚША Section 2. DEVELOPMENT OBJECTIVES sion Line of North-South Kazakhstan Transit” – $ 100 mln borrowed from IBRD, $ 147.8 mln of syndicated loan provided by EBRD under state guarantee; “Modernization of Kazakhstan National Power Grid, Phase II” – € 255 Section 3. MAIN PRINCIPLES AND STRATEGIES FOR ELECTRIC POWER INDUSTRY mln borrowed form EBRD; “Power Generation by Moinak HPP” – $ 200 mln borrowed from the State Develop- DEVELOPMENT IN THE REPUBLIC OF ment Bank of China, “Construction of 500 kV Alma SS Connected to Kazakhstan National Grid via 500-220 kV KAZAKHSTAN Lines of 500 , 220 kV” – $ 78 mln borrowed from IBRD. Section 4. “TRANSPARENT TARIFF” CIVIL РУССКИЙ INITIATIVE: Total cost of projects in Kazakhstan is € 9.9 bln. EBRD aims to increase the transparency and accountability CONTENT AND WAYS OF IMPLEMENTATION and to promote the proper management in all its activities in order to promote economically and environmentally sustainable transition in the countries of its operation, with the emphasis on private sector. BASIC QUESTIONNAIRE ON INDICATORS EBRD investments contribute to the following: ENGLISH • implementation of structural and sector reforms SUMMARY TABLE of selected indicators of “Electricity Governance Initiative” program • development of competition, privatization and entrepreneurship SUMMARY TABLE Indicators on the “Political • strengthening of financial organizations and legal systems Process” of Management of the Electricity Power Sector in Kazakhstan • development of the necessary infrastructure to support the private sector TABLE OF INDICATORS on “Political Process” • introduction of reliable system for corporate management, particularly in order to solve the of the Electricity Power Sector Management in environmental problems. Kazakhstan Projects in public sector are approved in the course of direct negotiations with governments. SUMMARY TABLE indicators on “Regulatory Process” of electricity sector management of • EBRD’s requirements for approving project funds from € 5 to 250 mln: Kazakhstan • The project facility must be located in one of the countries where EBRD conducts its operations Table of evaluation of “Regulatory Process” indicators of the electricity sector governance in • The project must have good profitability prospects Kazakhstan • The project sponsor must make a major contribution into share capital in cash or in kind SUMMARY TABLE of indicators on the evaluation of ecological and social aspects of the • The project must contribute to the economic development of the country Kazakhstan’s electrical power sector management • The project must meet the environmental standards of EBRD and the standards of country where the TABLE OF INDICATORS on the evaluation of project is implemented. ecological and social aspects of Kazakhstan’s electricity sector management In almost all cases, small-scale projects are financed through intermediaries, but in exceptional circumstances FILLED PROJECT INDICATORS the loans for such projects may be provided directly by EBRD. REGULATORY PROCESS INDICATORS EBRD offers solutions that meet the client’s and project’s needs and take into account the specific situation of the country, region and industry. It creates a target group of experts from project financing and familiar with the region, industry, legal and environmental problems. • EBRD finances up to 35 % of the total cost of the projects for creation of new enterprises or 35 % of the long-term capitalization of already existing company. • If a project requires attracting additional funds from sponsors or from other financing organizations, the Bank can do by syndicated loans. 130 TABLE OF CONTENT • Projects in private sector are usually associated with investments in share capital in amounts not less Section 1. HISTORY AND CURRENT STATUS OF ELECTRIC POWER INDUSTRY than one third of the project’s cost. ҚАЗАҚША Section 2. DEVELOPMENT OBJECTIVES • The sponsors must make large contributions into share capitals. The sponsors must have a controlling Section 3. MAIN PRINCIPLES AND STRATEGIES block of shares or be able to control operations in some other way. Contributions to share capital can FOR ELECTRIC POWER INDUSTRY DEVELOPMENT IN THE REPUBLIC OF be made in the form of fixed assets. KAZAKHSTAN EBRD does not finance the following range of activities: Section 4. “TRANSPARENT TARIFF” CIVIL РУССКИЙ INITIATIVE: • military production CONTENT AND WAYS OF IMPLEMENTATION • manufacture of tobacco products

BASIC QUESTIONNAIRE ON INDICATORS • production of substances prohibited by international law • gambling business. ENGLISH SUMMARY TABLE of selected indicators of Moreover, EBRD may refuse to finance a particular product or manufacturing processes because of their harm- “Electricity Governance Initiative” program ful effects on the environment or due to the impossibility of adequate mitigation of their harmful effects. SUMMARY TABLE Indicators on the “Political Process” of Management of the Electricity Power Sector in Kazakhstan RATING SELECTION TABLE OF INDICATORS on “Political Process” of the Electricity Power Sector Management in The rating is not applicable / Not rated Kazakhstan Report or activity meets none of the quality elements “Low” SUMMARY TABLE indicators on “Regulatory Process” of electricity sector management of Kazakhstan Report or activity meets one quality element “Low to Average” Table of evaluation of “Regulatory Process” indicators of the electricity sector governance in Report or activity meets two quality elements Medium Kazakhstan Report or activity meets three quality elements Medium-“High” SUMMARY TABLE of indicators on the evaluation of ecological and social aspects of the Kazakhstan’s electrical power sector management Report or activity meets all quality elements “High” TABLE OF INDICATORS on the evaluation of ecological and social aspects of Kazakhstan’s Name of the researcher and organization: Kurmanbaeva A. A. PA “Committee for Public Control over the Execu- electricity sector management tion of State Programs at the Local Level” FILLED PROJECT INDICATORS Information source: Construction of 500 kV Alma SS connected to Kazakhstan National Grid via 500-220 kV: , Ka- REGULATORY PROCESS INDICATORS zakhstan Company for KEGOC Power Grids Management http://www.kegoc.kz/press_center/news/2009/11/12, Kazakhstan Development Bank: Financial Statements http://www.kdb.kz/ru/about/financial_statements/, news.kz http://www.bnews.kz/ru/news/post/146952/.

131 TABLE OF CONTENT PP 24 Section 1. HISTORY AND CURRENT STATUS OF TRANSPARENCY OF DONORS’ PARTICIPATION THROUGH TECHNICAL AID ELECTRIC POWER INDUSTRY ҚАЗАҚША Quality Ele- Indica- Section 2. DEVELOPMENT OBJECTIVES Explanations ments tor Section 3. MAIN PRINCIPLES AND STRATEGIES FOR ELECTRIC POWER INDUSTRY DEVELOPMENT IN THE REPUBLIC OF Information about the international donors’ projects is uncoordinated and KAZAKHSTAN not always complete, so the information search is complicated. Activity of Section 4. “TRANSPARENT TARIFF” CIVIL РУССКИЙ INITIATIVE: international agencies like USAID, EBRD and European Commission in Ka- CONTENT AND WAYS OF zakhstan is represented by a brief overview of the project, amount, content IMPLEMENTATION and recipient of technical aid, loan or grant. Information represented on the World Bank’s website is more detailed and extended. Generally, transparency BASIC QUESTIONNAIRE ON INDICATORS of information about the technical aid is presented haphazardly and com- ENGLISH plicates the search, even on the websites of state agencies. The website of SUMMARY TABLE of selected indicators of the Ministry of Industry and New Technologies provides information about “Electricity Governance Initiative” program the government agreements, multilateral and bilateral agreements signed Transparency SUMMARY TABLE Indicators on the “Political and about the dates of their signing, but there are no texts of the docu- of the detailed Process” of Management of the Electricity Power No ments themselves. The section for laws and regulations issued by MINT of Sector in Kazakhstan data concerning RK in the area of international cooperation contains only one document: the technical aid TABLE OF INDICATORS on “Political Process” list of RK state bodies responsible for the Kazakh part of intergovernmental of the Electricity Power Sector Management in agreements. On the website of the Power Committee, the section for inter- Kazakhstan national cooperation contains one document: Memorandum of Understand- SUMMARY TABLE indicators on “Regulatory ing between the Committee of MINT of RK and the Ministry of Energy of the Process” of electricity sector management of Republic of Belarus on cooperation in the area of electricity. Kazakhstan Information about projects supported by international financial institutions Table of evaluation of “Regulatory Process” indicators of the electricity sector governance in is available on JSC “Samruk -Energo”s website, but the quality of this infor- Kazakhstan mation remains low; the data about the sources of financing, project implementation period, the result are available, but the amounts of investment SUMMARY TABLE of indicators on the evaluation of ecological and social aspects of the and the loan or grant agreement are not there. Kazakhstan’s electrical power sector management The websites of Kazakhstan state bodies, international non-profit organiza- TABLE OF INDICATORS on the evaluation of Transparency of tions, international financial institutions, except for the website of JSC “Sam- ecological and social aspects of Kazakhstan’s No electricity sector management the results ruk-Energo” (where the effect of modernization of the facilities is represented FILLED PROJECT INDICATORS in watts) and World Bank (information is available only in English). REGULATORY PROCESS INDICATORS A small part of the information shown on the websites (only 35% of the Widespread ac- No population have access to Internet resources) is presented in Russian and in tivities English, but no detailed and general information in Kazakh.

132 TABLE OF CONTENT DETAILED EXPLANATION: Expansion and reconstruction of Ekibastuz SDPP- 2 and installation of power gen- Section 1. HISTORY AND CURRENT STATUS OF ELECTRIC POWER INDUSTRY erating unit no. 3 (2010-2015): on 7 September 2010, in the course of the Forum of Interregional Coopera- ҚАЗАҚША Section 2. DEVELOPMENT OBJECTIVES tion between Kazakhstan and Russia, Presidents Nazarbayev N. A. and Medvedev D. A. instructed to use new Section 3. MAIN PRINCIPLES AND STRATEGIES technologies in the construction of 3rd power generating unit. (http://samruk-energy.kz). Construction of 45 FOR ELECTRIC POWER INDUSTRY MW WPP near Yereimentau (2011-2014): in April 2013, a loan agreement with EDB on project financing was DEVELOPMENT IN THE REPUBLIC OF KAZAKHSTAN signed. In April 2013, a contract for the design, supply and construction of 45 MW wind power plant (WPP) on

Section 4. “TRANSPARENT TARIFF” CIVIL turnkey basis near Yereimentau was signed. (http://samruk-energy.kz). Modernization of Shardarin HPP (2010- РУССКИЙ INITIATIVE: 2016): in 2012, a Loan Agreement with EBRD was signed. A tender to select a EPC-contractor is being held. CONTENT AND WAYS OF IMPLEMENTATION (http://samruk-energy.kz), information on the loan costing € 50 mln is available on EBRD website (http://www. ebrd.com/english/pages/project/psd/2012/43483.shtml). Construction of Moinak HPP (2006-2012): In 2012, BASIC QUESTIONNAIRE ON INDICATORS Moinak HPP was put into operation. (http://samruk-energy.kz) – the project is financed by the Development

Bank of Kazakhstan and the Development Bank of China. ENGLISH

SUMMARY TABLE of selected indicators of (http://bourabai.kz/toe/moinak.htm). Cost of the project is available on the website of Kazenergy association “Electricity Governance Initiative” program Moinak HPP. Total cost of the project is $ 251.69 mln. Within the framework of SCO, a loan agreement for $ 200 mln was signed between JSC “Moinak HPS” and State Development Bank of China under the guarantee SUMMARY TABLE Indicators on the “Political Process” of Management of the Electricity Power of the RK Government in the amount of $ 100 mln (http://old.kazenergy.com). Construction of Balkhash TPP Sector in Kazakhstan (2010-2018): in 2011, the Agreement between the RK Government and the Government of the Republic of Ko- TABLE OF INDICATORS on “Political Process” rea was signed for the development, financing, design, construction, operation and maintenance of Balkhash of the Electricity Power Sector Management in TPP. In September 2012, construction of the first module of the Balkhash TPP was started in the presence of Kazakhstan the Heads of State of the Republic of Kazakhstan and the Republic of Korea. In December 2012, the results SUMMARY TABLE indicators on “Regulatory of open international tender were obtained and the following companies won: Siemens AG (steam turbine Process” of electricity sector management of generator); Dongfang Electric Corporation Limited (boiler plant). In April 2013, the Law of the Republic of Ka- Kazakhstan zakhstan “On Ratification of the Agreement Between the Government of the Republic of Kazakhstan and the Table of evaluation of “Regulatory Process” Government of the Republic of Korea in the Area of Development, Financing, Design, Construction, Operation indicators of the electricity sector governance in and Maintenance of Balkhash Thermal Power Plant” was signed. (http://samruk-energy.kz) the text of ratifica- Kazakhstan tion agreement and law are available on the website of the Ministry of Justice (http://adilet.zan.kz/rus/docs/ SUMMARY TABLE of indicators on the evaluation P1100000947). Ongoing projects financed by European Commission: http://eeas.europa.eu/delegations/ka( - of ecological and social aspects of the Kazakhstan’s electrical power sector management zakhstan/projects/list_of_projects/projects_ru.htm): TABLE OF INDICATORS on the evaluation of • Initiative of Energy Conservation in Eastern Europe and Central Asia(http://eeas.europa.eu/delega- ecological and social aspects of Kazakhstan’s tions/kazakhstan/projects/list_of_projects/216206_en.htm), and electricity sector management • The Program for Sustainable Energy in CA, page does not open (http://eeas.europa.eu/delegations/ FILLED PROJECT INDICATORS kazakhstan/projects/list_of_projects/316640_en.htm). REGULATORY PROCESS INDICATORS Information provided by European Bank for Reconstruction and Development on the projects supported for the period 1997-2013 by an amount of about $ 1 bln, information on the projects is available in the form of a short single-page conclusion. (http://www.ebrd.com/saf/search.html?type=project&country=Kazakhstan):

133 TABLE OF CONTENT Sector: State/ Section 1. HISTORY AND CURRENT STATUS OF Date Project name ELECTRIC POWER INDUSTRY Privatee power industry ҚАЗАҚША Section 2. DEVELOPMENT OBJECTIVES Section 3. MAIN PRINCIPLES AND STRATEGIES 17 Jan 2013 CAEPCO Energy Efficiency Project Power and energy Private S FOR ELECTRIC POWER INDUSTRY DEVELOPMENT IN THE REPUBLIC OF KAZAKHSTAN 30 Apr 2012 Aktobe District Heating Energy efficiency Public

Section 4. “TRANSPARENT TARIFF” CIVIL РУССКИЙ INITIATIVE: 06 Jan 2012 Shardara HPP Modernization Project Power and energy Public S CONTENT AND WAYS OF IMPLEMENTATION 07 Oct 2011 Aktau District Heating Energy efficiency Public S

BASIC QUESTIONNAIRE ON INDICATORS KazREFF: Kazakhstan Renewable Energy Fi- PCR, 18 Mar 2011 Power and energy Private nancing Facility PFR ENGLISH

SUMMARY TABLE of selected indicators of 03 Feb 2011 KEGOC Osakarovka Restructuring Loan Power and energy Public S “Electricity Governance Initiative” program Kazakhstan District Heating Modernization SUMMARY TABLE Indicators on the “Political 17 Dec 2010 Energy efficiency Private Cn Process” of Management of the Electricity Power Framework Sector in Kazakhstan TABLE OF INDICATORS on “Political Process” 22 Oct 2010 CAEPCO District Heating – Pavlodar Energy efficiency Private S of the Electricity Power Sector Management in Kazakhstan 06 Aug 2010 AES Sogrinsk CHP Power and energy Private S SUMMARY TABLE indicators on “Regulatory Process” of electricity sector management of 15 Jan 2009 CAEPCO (F. Northern Lights) Power and energy Private S Kazakhstan 05 Sep 2008 Aktobe CHP rehabilitation Power and energy Public Cn Table of evaluation of “Regulatory Process” indicators of the electricity sector governance in Kazakhstan 19 Mar 2008 KEGOC Modernization II Loan Power and energy Public S SUMMARY TABLE of indicators on the evaluation 28 Sep 2007 Pavlodar Energo Power and energy Private S of ecological and social aspects of the Kazakhstan’s electrical power sector management KEGOC: Ekibastuz-YukGres power transmis- 27 Jun 2005 Power and energy Public C TABLE OF INDICATORS on the evaluation of sion ecological and social aspects of Kazakhstan’s electricity sector management 01 Aug 2003 KEGOC: North-South Power transmission Power and energy Public C FILLED PROJECT INDICATORS KEGOC Power Transmission and Rehabilita- REGULATORY PROCESS INDICATORS 14 May 1999 Power and energy Public S tion Project

18 Sep 1998 Karaganda Power Power and energy Private C

Almaty Power Consolidated Company Corpo- 04 Aug 1997 Power and energy Private Cn rate Loan

134 TABLE OF CONTENT The World Bank invested $ 123 mln into 3 projects, i.e. 5% of total loans hhtp://maps.worldbank.org/eca/kaz Section 1. HISTORY AND CURRENT STATUS OF ELECTRIC POWER INDUSTRY akhstan#&location=48.806853,69.521482,5§ors=energy,&indicator=Poverty)/ ҚАЗАҚША Section 2. DEVELOPMENT OBJECTIVES USAID projects (http://map.usaid.gov/) total amount for CA is $ 18.4 mln: Section 3. MAIN PRINCIPLES AND STRATEGIES FOR ELECTRIC POWER INDUSTRY • Central Asian Energy Efficiency Support Program, $ 1.9 mln, 2011-2013. http://map.usaid.gov/Project( DEVELOPMENT IN THE REPUBLIC OF KAZAKHSTAN Detail?id=a0cd00000012s4AAAQ),

Section 4. “TRANSPARENT TARIFF” CIVIL • Regional project for power security, efficiency and trading, $ 16.5 mln, 2011-2013 http://map.usaid.( РУССКИЙ INITIATIVE: CONTENT AND WAYS OF gov/ProjectDetail?id=a0cd00000012s3gAAA) IMPLEMENTATION The website of the Ministry of Industry and New Technologies provides information on international activ- BASIC QUESTIONNAIRE ON INDICATORS ity of the Ministry. There are about 60 bilateral agreements with different countries (http://www.mint.gov.

kz/?id=319) and 29 of them are being negotiated (http://www.mint.gov.kz/?id=321), 17 multilateral agree- ENGLISH ments within the framework of international governmental organizations (http://www.mint.gov.kz/?id=320), SUMMARY TABLE of selected indicators of but the subsection for law and regulation on “International Cooperation” contains only the list of the state “Electricity Governance Initiative” program bodies of the Republic of Kazakhstan responsible for Kazakhstan’s part of joint intergovernmental commis- SUMMARY TABLE Indicators on the “Political sions. Process” of Management of the Electricity Power Sector in Kazakhstan TABLE OF INDICATORS on “Political Process” RATING SELECTION of the Electricity Power Sector Management in Kazakhstan The rating is not applicable / Not rated Not rated SUMMARY TABLE indicators on “Regulatory Process” of electricity sector management of Transparency of donors participation through the technical aid meets 1 quality element Kazakhstan Table of evaluation of “Regulatory Process” Transparency of donors participation through the technical aid meets 2 quality elements indicators of the electricity sector governance in Kazakhstan Transparency of donors participation through the technical aid meets 3 quality elements SUMMARY TABLE of indicators on the evaluation of ecological and social aspects of the Name and organization of the researcher: Tnaliev Ulugbek Serikovich, Public Fund “Center for Budget Analysis Kazakhstan’s electrical power sector management and Economic Monitoring” TABLE OF INDICATORS on the evaluation of Information source: Legislation of the Republic of Kazakhstan and international agreements, the websites of ecological and social aspects of Kazakhstan’s electricity sector management state bodies and companies from the electricity sector, and websites of international donors represented by companies, governments and governmental organizations. FILLED PROJECT INDICATORS REGULATORY PROCESS INDICATORS

135 TABLE OF CONTENT PP 25 Section 1. HISTORY AND CURRENT STATUS OF TRANSPARENT AND ACCOUNTABLE IMPLEMENTATION OF POLICIES/ LEGISLATION ELECTRIC POWER INDUSTRY CONCERNING INDEPENDENT POWER PRODUCERS (IPP) ҚАЗАҚША Section 2. DEVELOPMENT OBJECTIVES Quality Ele- Indica- Section 3. MAIN PRINCIPLES AND STRATEGIES Explanations FOR ELECTRIC POWER INDUSTRY ments tor DEVELOPMENT IN THE REPUBLIC OF KAZAKHSTAN

There are Government Resolutions of the Republic of Kazakhstan dated 4 РУССКИЙ Section 4. “TRANSPARENT TARIFF” CIVIL INITIATIVE: June 2012 № 740 “On the Approval of the Rules for Organization and Func- CONTENT AND WAYS OF IMPLEMENTATION tioning of the Electric Energy Wholesale Market in the Republic of Kazakh- stan” and “On the Approval of the Rules for Organization and Functioning of BASIC QUESTIONNAIRE ON INDICATORS Electric Energy Retail Market and of the Access to the Services and Render-

ing Them for This Market”, data provided by these legal acts involve partici- ENGLISH pation of the private service providers. Also the web-site of JSC “KOEEPM” Competitive SUMMARY TABLE of selected indicators of No contains the tender documents that provide methodological support for or- tendering “Electricity Governance Initiative” program ganizing and conducting tenders. It is necessary to have access to the trad- SUMMARY TABLE Indicators on the “Political ing system of JSC “KOEEPM” to obtain the right to participate in the central- Process” of Management of the Electricity Power ized electric energy spot-tender “in the day-before”, in retail electric energy Sector in Kazakhstan spot-tender “during an operating day” or in centralized electric energy tender TABLE OF INDICATORS on “Political Process” for mid-term and long-term periods. The employees of the enterprises who of the Electricity Power Sector Management in wish to take part in the centralized tender are trained by the Department of Kazakhstan Exchange Business and Marketing of JSC “KOEEPM”. SUMMARY TABLE indicators on “Regulatory Process” of electricity sector management of Disclosure of Kazakhstan information Table of evaluation of “Regulatory Process” concerning con- No Electric energy supply contracts are not available to the public. indicators of the electricity sector governance in tracts on electric Kazakhstan energy supply SUMMARY TABLE of indicators on the evaluation of ecological and social aspects of the Demand and supply are analyzed by the initiator of the tender in the elec- Kazakhstan’s electrical power sector management trical energy market. Quarterly reports contain statistical and analytical in- Adequate analy- TABLE OF INDICATORS on the evaluation of Yes formation about the volumes of electrical energy consumption. At the same ecological and social aspects of Kazakhstan’s sis of demand electricity sector management time, this analysis could be complemented with a large amount of information, if available in a language, which is understandable to the public. FILLED PROJECT INDICATORS Financial analysis contained in analytical reports of JSC “KOEEPM” does not REGULATORY PROCESS INDICATORS Financial impact No contain detailed data concerning the sensitivity to the changes in exchange analysis rates, prices for energy resources and expected demand.

136 TABLE OF CONTENT Adequate public Section 1. HISTORY AND CURRENT STATUS OF ELECTRIC POWER INDUSTRY consultations No No public consultations were provided. ҚАЗАҚША Section 2. DEVELOPMENT OBJECTIVES before project approval Section 3. MAIN PRINCIPLES AND STRATEGIES FOR ELECTRIC POWER INDUSTRY DEVELOPMENT IN THE REPUBLIC OF DETAILED EXPLANATION KAZAKHSTAN

Section 4. “TRANSPARENT TARIFF” CIVIL RATING SELECTION РУССКИЙ INITIATIVE: CONTENT AND WAYS OF IMPLEMENTATION The rating is not applicable / Not rated

BASIC QUESTIONNAIRE ON INDICATORS Case of IPP does not meet any quality element “Low” ENGLISH Case of IPP meets 1 quality element “Low to Average” SUMMARY TABLE of selected indicators of “Electricity Governance Initiative” program Case of IPP meets 2 quality elements Medium SUMMARY TABLE Indicators on the “Political Process” of Management of the Electricity Power Case of IPP meets 3-4 quality elements Medium-“High” Sector in Kazakhstan TABLE OF INDICATORS on “Political Process” Case of IPP meets all 5 quality elements “High” of the Electricity Power Sector Management in Kazakhstan SUMMARY TABLE indicators on “Regulatory Name and organization of the researcher: Tnaliev Ulugbek Serikovich, Public Fund “Center for Budget Analysis Process” of electricity sector management of and Economic Monitoring” Kazakhstan Information source: Website of JSC “KOEEPM”, laws and regulations of the Republic of Kazakhstan, provisions Table of evaluation of “Regulatory Process” and procedures of the regulator. indicators of the electricity sector governance in Kazakhstan SUMMARY TABLE of indicators on the evaluation of ecological and social aspects of the Kazakhstan’s electrical power sector management TABLE OF INDICATORS on the evaluation of ecological and social aspects of Kazakhstan’s electricity sector management FILLED PROJECT INDICATORS REGULATORY PROCESS INDICATORS

137 TABLE OF CONTENT PP 26 Section 1. HISTORY AND CURRENT STATUS OF TRANSPARENT SELECTION OF SERVICE PROVIDERS FROM PRIVATE SECTOR ELECTRIC POWER INDUSTRY ҚАЗАҚША Quality Ele- Indica- Section 2. DEVELOPMENT OBJECTIVES Explanations ments tor Section 3. MAIN PRINCIPLES AND STRATEGIES FOR ELECTRIC POWER INDUSTRY DEVELOPMENT IN THE REPUBLIC OF At present time, the electric energy wholesale market represents “rigid oli- KAZAKHSTAN gopoly”, this is the result the structure of electrical energy generation, i.e., Section 4. “TRANSPARENT TARIFF” CIVIL РУССКИЙ INITIATIVE: up to 50% of electric energy supply are provided by the three largest power CONTENT AND WAYS OF plants of the country, and this resulted into the limitation of consumer’s IMPLEMENTATION rights and freedom in selection of electric energy supplier. In consequence Transparency in of a decrease in competition by receiving high profitability thru maximum BASIC QUESTIONNAIRE ON INDICATORS the request for No rates, the energy producing organizations, being already an existing oligop- ENGLISH proposals oly at the market, “shared” the consumers of wholesale market and dictated SUMMARY TABLE of selected indicators of to them conditions concerning the terms and volumes of supply, and terms “Electricity Governance Initiative” program of payment in contractual matters. Energy saving organizations affiliated SUMMARY TABLE Indicators on the “Political with them were provided with prior rights of contracting and energy supply. Process” of Management of the Electricity Power (Project for Further Improvement of Market Relations in Electric Power In- Sector in Kazakhstan dustry of the Republic of Kazakhstan). TABLE OF INDICATORS on “Political Process” of the Electricity Power Sector Management in Sector of centralized electric energy trading was not properly developing. Kazakhstan The electric energy spot-market turned out to be not in as much need cur- SUMMARY TABLE indicators on “Regulatory rently, such that the spot-tender market could not implement their most Process” of electricity sector management of important role in forming a variable component of load curve in accordance Information Kazakhstan with market principles as per the subjects of the market. Overwhelming vol- provided to the Table of evaluation of “Regulatory Process” ume of electric power is sold under closed bilateral contracts, and the mar- bidders is also No indicators of the electricity sector governance in ket of centralized tendering was not properly developed. (Project for Further available to the Kazakhstan Improvement of Market Relations in Electric Power Industry of the Repub- public SUMMARY TABLE of indicators on the evaluation lic of Kazakhstan). Tender is done via the closed platform of JSC “KOEEPM” of ecological and social aspects of the where registration is necessary, and at the same time, analytical reports (dai- Kazakhstan’s electrical power sector management ly, weekly, monthly and quarterly) on the prices and other information are TABLE OF INDICATORS on the evaluation of periodically issued. ecological and social aspects of Kazakhstan’s electricity sector management Transparency in FILLED PROJECT INDICATORS selection crite- No Information on the website is opened only for registered users. REGULATORY PROCESS INDICATORS ria and process

Substantia- Substantiation of decision made is not provided; criteria for public purchas- tion of decision No es in accordance with the legislation may only be price and local content made (Kazakh producer).

138 TABLE OF CONTENT DETAILED EXPLANATION Section 1. HISTORY AND CURRENT STATUS OF ELECTRIC POWER INDUSTRY RATING SELECTION ҚАЗАҚША Section 2. DEVELOPMENT OBJECTIVES Section 3. MAIN PRINCIPLES AND STRATEGIES FOR ELECTRIC POWER INDUSTRY The rating is not applicable / Not rated DEVELOPMENT IN THE REPUBLIC OF KAZAKHSTAN There is no clearness in the authorities to issue the ecological permissions for the

“Low” РУССКИЙ Section 4. “TRANSPARENT TARIFF” CIVIL projects in energy sector INITIATIVE: CONTENT AND WAYS OF IMPLEMENTATION The process of private participation does not meet any quality element “Low to Average”

BASIC QUESTIONNAIRE ON INDICATORS The process of private participation meets 1 quality element Medium ENGLISH The process of private participation meets 2 quality elements Medium-“High” SUMMARY TABLE of selected indicators of “Electricity Governance Initiative” program The process of private participation meets 3 quality elements “High” SUMMARY TABLE Indicators on the “Political Process” of Management of the Electricity Power Sector in Kazakhstan Name and organization of the researcher: Tnaliev Ulugbek Serikovich, Public Fund “Center for Budget Analysis TABLE OF INDICATORS on “Political Process” and Economic Monitoring”. of the Electricity Power Sector Management in Kazakhstan Information source: Websites of authorized state bodies, website of JSC “Kazakhstan Operator of Electric En- ergy and Power Market”, (Project for Further Improvement of Market Relations in Electric Power Industry of SUMMARY TABLE indicators on “Regulatory the RK: www.korem.kz/uploads/file/Concept_draft.doc. The website of JSC “KOEEPM” contains laws and regu- Process” of electricity sector management of Kazakhstan lations that regulate the activity for organizing and conducting tenders (http://www.korem.kz/rus/zakonodatelstvo/normativno-pravovye_akty/, http://www.korem.kz/rus/zakonodatelstvo/dokumenty_po_torgam/), list Table of evaluation of “Regulatory Process” indicators of the electricity sector governance in of bidders (http://www.korem.kz/rus/centralizovannye_torgi/uchastniki_torgov/) and information on how to Kazakhstan become a bidder (http://www.korem.kz/rus/centralizovannye_torgi/kak_stat_uchastn_torgov/). SUMMARY TABLE of indicators on the evaluation of ecological and social aspects of the Kazakhstan’s electrical power sector management TABLE OF INDICATORS on the evaluation of ecological and social aspects of Kazakhstan’s electricity sector management FILLED PROJECT INDICATORS REGULATORY PROCESS INDICATORS

139 TABLE OF CONTENT PP 27 Section 1. HISTORY AND CURRENT STATUS OF TRANSPARENCY OF ASSET VALUATION / BALANCE RESTRUCTURING ELECTRIC POWER INDUSTRY ҚАЗАҚША Quality Ele- Indica- Section 2. DEVELOPMENT OBJECTIVES Explanation ments tor Section 3. MAIN PRINCIPLES AND STRATEGIES FOR ELECTRIC POWER INDUSTRY DEVELOPMENT IN THE REPUBLIC OF Rules of Fixed Assets Evaluation by Natural Monopolies of ARNM of RK dated KAZAKHSTAN Description and 21 July 2005 No. 226-OD, sp. 1-5, p. 7, Chapter 2, methods of fixed assets Section 4. “TRANSPARENT TARIFF” CIVIL justification of No РУССКИЙ re-evaluation. This document understandably justifies the asset valuation INITIATIVE: methods CONTENT AND WAYS OF methodology. IMPLEMENTATION Explanation of Rules dated 21 July 2005 No. 226-OD, sp. 1-5, p. 12, Ch. 4 Procedure of Coordi- BASIC QUESTIONNAIRE ON INDICATORS method’s appli- No nation with Competent Authority clearly explains how to apply the methodol- ENGLISH cation ogy described. SUMMARY TABLE of selected indicators of “Electricity Governance Initiative” program According to the Rules, re-evaluation of fixed assets by direct estimate method is carried out by independent valuators in accordance with the legislation. SUMMARY TABLE Indicators on the “Political Process” of Management of the Electricity Power Fixed assets are re-evaluated by the Entity no more than once a year. If re- Sector in Kazakhstan evaluation is necessary on the grounds set out in paragraph 4 of the Rules, Independent the Entity shall submit an application to the authorized body to coordinate TABLE OF INDICATORS on “Political Process” No of the Electricity Power Sector Management in monitoring the re-evaluation of fixed assets and shall apply for the supporting materi- Kazakhstan als. Re-evaluation of fixed assets by direct estimate method is carried out SUMMARY TABLE indicators on “Regulatory by independent valuators in accordance with the legislation. Process” of electricity sector management of Independent consulting companies like LLP “Laboratoriya Otsenki” (Kara- Kazakhstan ganda) and ТОО LLP (Astana) Table of evaluation of “Regulatory Process” indicators of the electricity sector governance in Public disclo- Kazakhstan No No public disclosure of review exist in the Rules. sure of review SUMMARY TABLE of indicators on the evaluation of ecological and social aspects of the Kazakhstan’s electrical power sector management TABLE OF INDICATORS on the evaluation of ecological and social aspects of Kazakhstan’s electricity sector management FILLED PROJECT INDICATORS REGULATORY PROCESS INDICATORS

140 TABLE OF CONTENT DETAILED EXPLANATION: Valuation of fixed assets is the process of reviewing the book value that allows Section 1. HISTORY AND CURRENT STATUS OF ELECTRIC POWER INDUSTRY making financial statements more accurate when representing tax reports. Re-evaluation allows assessing the ҚАЗАҚША Section 2. DEVELOPMENT OBJECTIVES cost of fixed assets, which are included in the tariff estimate. 4. Grounds for the necessity to re-evaluate the fixed assets are as follows: Section 3. MAIN PRINCIPLES AND STRATEGIES FOR ELECTRIC POWER INDUSTRY DEVELOPMENT IN THE REPUBLIC OF 1) bringing the present value of fixed assets to the fair value KAZAKHSTAN 2) discrepancy between the standard service life of fixed assets specified in the manufacturer’s technical Section 4. “TRANSPARENT TARIFF” CIVIL РУССКИЙ INITIATIVE: documentation and the actual period of use CONTENT AND WAYS OF IMPLEMENTATION 3) technical obsolescence as a result of scientific and technical progress, changes in business conditions, impact from economic factors BASIC QUESTIONNAIRE ON INDICATORS 4) the impact of other adverse and unforeseen factors that result in poor performance of fixed assets ENGLISH 5) The principal terms used in the Rules: SUMMARY TABLE of selected indicators of “Electricity Governance Initiative” program depreciation is the cost expression of wear represented by systematic distribution of the depreciable cost of asset over its life period SUMMARY TABLE Indicators on the “Political Process” of Management of the Electricity Power depreciable cost is the cost of an asset or other amount reflected in financial statements instead of its prime Sector in Kazakhstan cost after deduction of its residual value TABLE OF INDICATORS on “Political Process” of the Electricity Power Sector Management in book value is the amount at which an asset is recognized in the balance sheet after deducting all accumulated Kazakhstan depreciation of fixed assets and accumulated loss from the asset impairment SUMMARY TABLE indicators on “Regulatory wear is the process of losing the physical and moral characteristics of fixed assets Process” of electricity sector management of Kazakhstan 1) physical deterioration is the loss of facility value of the property as a result of the damage (defects) caused by wear and destruction connected with the operating conditions and maintenance under the influence of Table of evaluation of “Regulatory Process” indicators of the electricity sector governance in climatic and other factors Kazakhstan 2) functional wear is the loss of facility value as a result of its inability to perform functions inherent in modern SUMMARY TABLE of indicators on the evaluation buildings and structures with improved architecture, space-planning, design or other characteristics of ecological and social aspects of the Kazakhstan’s electrical power sector management 3) economic obsolescence is the loss of facility value as a result of changes in the real estate market, due to environmental impact (the ratio of the demand and the volume of offers at existing market caused by TABLE OF INDICATORS on the evaluation of ecological and social aspects of Kazakhstan’s economic and demographic conditions, consumer solvency and by other regional factors) electricity sector management competent authority is the state body authorized to regulate the Entity’s activity in the relevant industry, and FILLED PROJECT INDICATORS for the Entity, which belongs to municipal property or provides services of water and (or) sewage systems; it REGULATORY PROCESS INDICATORS is the local executive body fixed assets are the tangible assets used by the entity to produce or deliver the finished products (goods, works, services)and to lease for administrative purposes, which are supposed to be used for a long period of time (more than one year ) valuator is an individual or a legal entity, which has a license for evaluation activities

141 TABLE OF CONTENT initial cost is the cost of actual expenditures for the construction or acquisition of fixed assets, including the Section 1. HISTORY AND CURRENT STATUS OF ELECTRIC POWER INDUSTRY non-refundable taxes and fees paid, as well as expenditures for delivery, assembly, installation, commissioning ҚАЗАҚША Section 2. DEVELOPMENT OBJECTIVES and any other costs directly attributable to bringing the asset into operating condition Section 3. MAIN PRINCIPLES AND STRATEGIES useful life is the period during which the use of fixed assets is supposed to bring some economic benefit FOR ELECTRIC POWER INDUSTRY DEVELOPMENT IN THE REPUBLIC OF prime cost is the amount of money or the fair value of any other compensation provided to acquire an asset KAZAKHSTAN at the moment of its acquisition or construction Section 4. “TRANSPARENT TARIFF” CIVIL РУССКИЙ INITIATIVE: fair value is the amount provided to exchange the asset with one well informed and independent party that CONTENT AND WAYS OF IMPLEMENTATION wants to carry out such operation for another guideline life is the period determined by the Entity, according to the technical documentation, as the life BASIC QUESTIONNAIRE ON INDICATORS time of fixed assets ENGLISH current value is the value of fixed assets according to the current market prices at a certain date. SUMMARY TABLE of selected indicators of “Electricity Governance Initiative” program RATING SELECTION SUMMARY TABLE Indicators on the “Political Process” of Management of the Electricity Power The rating is not applicable / Not rated Sector in Kazakhstan TABLE OF INDICATORS on “Political Process” Reports or activity do not meet any quality element “Low” of the Electricity Power Sector Management in Kazakhstan Reports or activity meet one quality element “Low to Average” SUMMARY TABLE indicators on “Regulatory Process” of electricity sector management of Reports or activity meet two quality elements Medium Kazakhstan Table of evaluation of “Regulatory Process” Reports or activity meet three quality elements Medium-“High” indicators of the electricity sector governance in Kazakhstan Reports or activity meet all quality elements “High” SUMMARY TABLE of indicators on the evaluation of ecological and social aspects of the Kazakhstan’s electrical power sector management Name of the researcher and organization: Sara Espenova, PF “KAMEDA” TABLE OF INDICATORS on the evaluation of Information source: The Rules of Fixed Assets Revaluation by Natural Monopolies. Approved by the Order is- ecological and social aspects of Kazakhstan’s sued by the Chairman of the Agency of the Republic of Kazakhstan for the Regulation of Natural Monopolies electricity sector management dated 21 July No. 226-OD. The Order has been worked out in accordance with the Laws of the Republic of FILLED PROJECT INDICATORS Kazakhstan: “On Natural Monopolies”, “On Evaluation Activities”, “On Accounting and Financial Statements”. REGULATORY PROCESS INDICATORS Supplemental information: Official request No. 30 dated 11/09/2013 was sent to the ARNM. The letter was lost in the Agency office. No official response received.

142 TABLE OF CONTENT PP 28 TRANSPARENCY AND ACCOUNTABILITY IN SUBSIDY DEVELOPMENT AND Section 1. HISTORY AND CURRENT STATUS OF ELECTRIC POWER INDUSTRY IMPLEMENTATION ҚАЗАҚША Section 2. DEVELOPMENT OBJECTIVES Quality Ele- Section 3. MAIN PRINCIPLES AND STRATEGIES Indicator Explanations FOR ELECTRIC POWER INDUSTRY ments DEVELOPMENT IN THE REPUBLIC OF KAZAKHSTAN The criteria for industry subsidization and access to services are the develop- Section 4. “TRANSPARENT TARIFF” CIVIL РУССКИЙ INITIATIVE: ment programs adopted by the Government, such as Territory Development CONTENT AND WAYS OF Program, Business Roadmap, the State Program of Accelerated Industrial and Transparency of IMPLEMENTATION No Innovative Development, etc. At the same time, these programs do not pro- criteria vide for the direct subsidies, but for financial support to existing business BASIC QUESTIONNAIRE ON INDICATORS entities in modernization and expansion, and to new entities in the construc- ENGLISH tion of different stations. These programs are financed from the budget. SUMMARY TABLE of selected indicators of “Electricity Governance Initiative” program Substantiation of the decisions SUMMARY TABLE Indicators on the “Political No Information to substantiate the decisions made is not available to the public. Process” of Management of the Electricity Power concerning allo- Sector in Kazakhstan cations

TABLE OF INDICATORS on “Political Process” Monitoring and reporting are carried out in accordance with the budget legis- of the Electricity Power Sector Management in Monitoring and No lation, rules and procedures. Monitoring and reporting are carried out by the Kazakhstan reporting relevant ministries and agencies, but are not always available to the public. SUMMARY TABLE indicators on “Regulatory Process” of electricity sector management of Evaluation results are not available to the public, and the evaluation itself is Kazakhstan Evaluation No not carried out on a regular basis. Table of evaluation of “Regulatory Process” indicators of the electricity sector governance in Kazakhstan DETAILED EXPLANATION: The legislation does not provide any special direct subsidies for the low-income families in the electricity sector; there are indirect subsidies for low-income families whose costs for food bas- SUMMARY TABLE of indicators on the evaluation of ecological and social aspects of the ket and utility services (including the electricity) are lower than the subsistence level. At the same time, there Kazakhstan’s electrical power sector management are significant budget allocations for construction of infrastructure facilities in electricity sector. As regards the construction of wind power plants and solar batteries in Shchuchinsk-Borovsk resort area, renewable en- TABLE OF INDICATORS on the evaluation of ecological and social aspects of Kazakhstan’s ergy sources will be installed and introduced as far as investment proposals can be made. “In total, 2 projects electricity sector management for construction of a wind power plant near Ereimentau with the participation of JSC “Samruk Energo” are FILLED PROJECT INDICATORS now implemented in the region, implementation period is 2012-2016” – blog of the Mayor of Akmola region, http://blog.akmo.kz/home/esp. As reports the Kazakhstan Today, JSC “Kazakhstan Company for KEGOC Power REGULATORY PROCESS INDICATORS Grids Management” announces the successful completion of voltage tests and putting into operation of a new 500 kV substation in Alma. According to the data provided by Public Relations Department of JSC “KEGOC”, the total cost of the project is about 30 bn KZT. The construction is financed by JSC “KEGOC”s own funds, by national budget and by IBRD loans (loan agreement for $ 78 mln) issued under the RK state guarantee. – http:// kt.kz/rus/energetics/vvedena_v_rabotu_novaja_podstancija_500_kv_alma_1153566870.html

143 TABLE OF CONTENT Section 1. HISTORY AND CURRENT STATUS OF RATING SELECTION ELECTRIC POWER INDUSTRY ҚАЗАҚША Section 2. DEVELOPMENT OBJECTIVES The rating is not applicable / Not rated Section 3. MAIN PRINCIPLES AND STRATEGIES FOR ELECTRIC POWER INDUSTRY DEVELOPMENT IN THE REPUBLIC OF Subsidy assistance program does not meet any quality element “Low” KAZAKHSTAN

Section 4. “TRANSPARENT TARIFF” CIVIL Subsidy assistance program meets 1 quality element “Low to Average” РУССКИЙ INITIATIVE: CONTENT AND WAYS OF IMPLEMENTATION Subsidy assistance program meets 2 quality elements Medium

BASIC QUESTIONNAIRE ON INDICATORS Subsidy assistance program meets 3 quality elements Medium-“High” ENGLISH Subsidy assistance program meets all 4 quality elements “High” SUMMARY TABLE of selected indicators of “Electricity Governance Initiative” program Name and organization of the researcher: Tnaliev Ulugbek Serikovich, Public Fund “Center for Budget Analysis SUMMARY TABLE Indicators on the “Political and Economic Monitoring” Process” of Management of the Electricity Power Sector in Kazakhstan Information source: RK legislation, information provided by news agencies, websites of state bodies and their affiliated organizations. TABLE OF INDICATORS on “Political Process” of the Electricity Power Sector Management in Kazakhstan SUMMARY TABLE indicators on “Regulatory Process” of electricity sector management of Kazakhstan Table of evaluation of “Regulatory Process” indicators of the electricity sector governance in Kazakhstan SUMMARY TABLE of indicators on the evaluation of ecological and social aspects of the Kazakhstan’s electrical power sector management TABLE OF INDICATORS on the evaluation of ecological and social aspects of Kazakhstan’s electricity sector management FILLED PROJECT INDICATORS REGULATORY PROCESS INDICATORS

144 TABLE OF CONTENT PP 29 Section 1. HISTORY AND CURRENT STATUS OF CLARITY OF AUTHORITY AND JURISDICTION TO GRANT ENVIRONMENTAL ELECTRIC POWER INDUSTRY APPROVALS FOR PROJECTS IN ELECTRICITY SECTOR. ҚАЗАҚША Section 2. DEVELOPMENT OBJECTIVES Quality Indica- Section 3. MAIN PRINCIPLES AND STRATEGIES Explanation FOR ELECTRIC POWER INDUSTRY Elements tor DEVELOPMENT IN THE REPUBLIC OF KAZAKHSTAN

Section 4. “TRANSPARENT TARIFF” CIVIL Article 17, p. 12 of the RK Environmental Code provides competence for the РУССКИЙ INITIATIVE: authorized body in the area of environmental protection to conduct the state CONTENT AND WAYS OF IMPLEMENTATION ecological examination within that competence. Conditions of The competence for the authorized body in the area of environmental pro- BASIC QUESTIONNAIRE ON INDICATORS authorities and Yes tection and MA to conduct the state ecological examination is defined in Art. jurisdictions 48 of the Code. ENGLISH

SUMMARY TABLE of selected indicators of According to Art. 20 p. 3 of the Code, state ecological examination shall be “Electricity Governance Initiative” program carried out by local executive bodies in the regions, in the cities that have SUMMARY TABLE Indicators on the “Political national status and in the Capital according to their competence. Process” of Management of the Electricity Power Sector in Kazakhstan According to Article 4, p. 10 of the Order issued by the Minister of Environ- TABLE OF INDICATORS on “Political Process” ment of the Republic of Kazakhstan, on 28 June 2007 “On Approval of State of the Electricity Power Sector Management in Ecological Examination Rules”, the state ecological examination shall be Kazakhstan carried out by the following entities: SUMMARY TABLE indicators on “Regulatory • authorized body in the area of environmental protection and Process” of electricity sector management of Kazakhstan its territorial units – for the organization and conduction of state ecological examination in category I facilities Table of evaluation of “Regulatory Process” indicators of the electricity sector governance in • local executives bodies – the part of the organization conducting Kazakhstan state ecological examination at II, III and IV category facilities. SUMMARY TABLE of indicators on the evaluation of ecological and social aspects of the Clear separation The category I facilities subject to state ecological examination shall be Yes Kazakhstan’s electrical power sector management of powers distributed among the competent authority and its territorial units by the authorized body in the area of environmental protection in accordance with TABLE OF INDICATORS on the evaluation of ecological and social aspects of Kazakhstan’s the Criteria for the Distribution of Category I Facilities Subject to State Eco- electricity sector management logical Examination Among the Authorized Bodies in the Area of Environ- FILLED PROJECT INDICATORS mental Protection and Its Territorial Units approved by the Resolution of the Government of the Republic of Kazakhstan dated 31 March 2009 “On REGULATORY PROCESS INDICATORS Approval of the Criteria for the Distribution of I Category Facilities Subject to State Ecological Examination Among the Authorized Bodies in the Area of Environmental Protection and Its Territorial Units”. This Resolution also defines the Criteria for the Distribution of Category I Facilities Subject to Receive Permits for Emissions into the Environment Among the Authorized Bodies in the Area of Environmental Protection and Its Territorial Units.

145 TABLE OF CONTENT Annex № 5 to the “Guidelines for State Ecological Examination of Pre-project Section 1. HISTORY AND CURRENT STATUS OF and Project Materials” approved by the Order issued by the Minister of Envi- ELECTRIC POWER INDUSTRY ronment of the Republic of Kazakhstan dated 16 February 2005 defines the ҚАЗАҚША Section 2. DEVELOPMENT OBJECTIVES “Criteria for Categorizations of Ecologically Examined Facilities to Strategic, Section 3. MAIN PRINCIPLES AND STRATEGIES FOR ELECTRIC POWER INDUSTRY Trans-boundary and Environmentally Hazardous”. DEVELOPMENT IN THE REPUBLIC OF KAZAKHSTAN After obtaining the results of state ecological examination, according to p.

Section 4. “TRANSPARENT TARIFF” CIVIL 1 Art. 51 of the Code, a conclusion of state ecological examination is issued РУССКИЙ INITIATIVE: containing the opinion on admissibility of taking decisions concerning the re- CONTENT AND WAYS OF IMPLEMENTATION alization of ecologically examined facility. Well-timed publi- The time limits for state ecological examination are regulated by Art. 50 of No BASIC QUESTIONNAIRE ON INDICATORS cation of approval the Code, according to which the duration of the state ecological examination shall not exceed two months for the facilities of category I and one month for ENGLISH the facilities of categories II, III and IV from the moment when all necessary SUMMARY TABLE of selected indicators of documentation that passed the preliminary examination is transferred to the “Electricity Governance Initiative” program bodies that carry out the state ecological examination. The law does not re- SUMMARY TABLE Indicators on the “Political quire publishing the approvals. Process” of Management of the Electricity Power Sector in Kazakhstan According to Art. 57 «Publicity of the State Ecological Examination and Public TABLE OF INDICATORS on “Political Process” Access to Decision Making» dated 9 January 2007 No. 212-III of the “Environ- of the Electricity Power Sector Management in mental Code of the Republic of Kazakhstan”. Kazakhstan 1. Application for state ecological examination, except for applications for SUMMARY TABLE indicators on “Regulatory state ecological examination of standard emissions into the environment, Process” of electricity sector management of must be published in mass media by the customer of planned activities. Kazakhstan Comprehensive Yes 2. All interested citizens and public associations have an opportunity to Table of evaluation of “Regulatory Process” disclosure indicators of the electricity sector governance in express their views during the performance of state ecological examination. Kazakhstan 3. The public hearings are held for projects, implementation of which may SUMMARY TABLE of indicators on the evaluation have direct effect on the environment and public health. of ecological and social aspects of the The action plans for environmental protection worked out for facilities of Kazakhstan’s electrical power sector management category I and II to obtain permits for emissions into the environment shall be TABLE OF INDICATORS on the evaluation of presented at public hearings. ecological and social aspects of Kazakhstan’s electricity sector management The provisions are available on the websites of state bodies. The provisions may be provided free of charge upon request in accordance with the Law of FILLED PROJECT INDICATORS Easy access Yes the Republic of Kazakhstan dated 12 January 2007 “On Consideration Proce- REGULATORY PROCESS INDICATORS dure for Appeals from Individuals and Legal Entities”. Explanative examples are available on the websites of public authorities. The Process Scheme for Carrying Out State Ecological Examination in EKR Accessible format Yes of the Department for Natural Resources and Natural Use Regulation of the Eastern Kazakhstan Region: http://e-priroda.gov.kz/index.php?page=top_ expertiza&hl=ru_RU .

146 TABLE OF CONTENT DETAILED EXPLANATION: The procedure is carried out in accordance with the Environmental Code of the Section 1. HISTORY AND CURRENT STATUS OF ELECTRIC POWER INDUSTRY Republic of Kazakhstan dated 9 January 2007, the “Rules of State Ecological Examination in the Republic of ҚАЗАҚША Section 2. DEVELOPMENT OBJECTIVES Kazakhstan” (approved by the Order of the Minister of Environment of the Republic of Kazakhstan, dated 28 June 2007, N 207-p), the Regulations of the Assessment of Environmental Effects from Planned Economic Section 3. MAIN PRINCIPLES AND STRATEGIES FOR ELECTRIC POWER INDUSTRY and Other Activities When Working Out the Pre-planned, Planned , Pre-project and Project Documentation DEVELOPMENT IN THE REPUBLIC OF (approved by the Order of the Minister of Environment of the Republic of Kazakhstan, dated 28 June 2007 N KAZAKHSTAN 204-p). The customer shall submit the application to a local executive authority to approve the allocation of Section 4. “TRANSPARENT TARIFF” CIVIL РУССКИЙ INITIATIVE: a land plot (there it is necessary to specify the purpose of the land use, land size and location, and to provide CONTENT AND WAYS OF a copy of cartographic material), to conduct a state ecological examination, or to approve the project docu- IMPLEMENTATION mentation. The application shall be considered within 1-2 days. After consideration, the application is accepted, registered and sent to the executor for execution. The clerk warns the customer that within two days BASIC QUESTIONNAIRE ON INDICATORS

the customer must verify the completeness and accuracy of the documents submitted. Applicant receives the ENGLISH information about the executor of his documents (phone number, room number). The department for environ- SUMMARY TABLE of selected indicators of mental examination conducts the stage of preliminary examination. Consideration period is 3-4 days for pre- “Electricity Governance Initiative” program project documentation, 14 days for project documentation. The documents are taken for state environmental SUMMARY TABLE Indicators on the “Political examination, the name of specific executor of the documentation is known. If the documents submitted are Process” of Management of the Electricity Power incomplete, the applicant receives a letter about their incompleteness. The department for environmental ex- Sector in Kazakhstan amination examines the documents in order of precedence. Consideration period shall not exceed three months TABLE OF INDICATORS on “Political Process” (according to paragraph 1 of Article 50 of the RK Environmental Code, from 3 days to 3 months). As a result, the of the Electricity Power Sector Management in land allocation certificate or the project is approved (the conclusion is issued) (or not approved), the applicant Kazakhstan receives the conclusion of state ecological examination, or motivated refusal of the approval. SUMMARY TABLE indicators on “Regulatory Process” of electricity sector management of The process is completed. Kazakhstan RATING SELECTION Table of evaluation of “Regulatory Process” indicators of the electricity sector governance in Kazakhstan The rating is not applicable / Not rated SUMMARY TABLE of indicators on the evaluation of ecological and social aspects of the Reports or activity do not meet any quality element “Low” Kazakhstan’s electrical power sector management Reports or activity meet one quality element “Low to Average” TABLE OF INDICATORS on the evaluation of ecological and social aspects of Kazakhstan’s electricity sector management Reports or activity meet two quality elements Medium FILLED PROJECT INDICATORS Reports or activity meet three quality elements Medium-“High” REGULATORY PROCESS INDICATORS Reports or activity meet all quality elements “High”

147 TABLE OF CONTENT Name of the researcher and organization: Kurmanbaeva A. A. PA “Committee for Public Control over the Execu- Section 1. HISTORY AND CURRENT STATUS OF ELECTRIC POWER INDUSTRY tion of State Programs at the Local Level” ҚАЗАҚША Section 2. DEVELOPMENT OBJECTIVES Information source: Information and Legal System of Laws and Regulations of the Republic of Kazakhstan: the Section 3. MAIN PRINCIPLES AND STRATEGIES Order issued by the Minister of Environment of the Republic of Kazakhstan dated 28 June 2007, N 207-p “On FOR ELECTRIC POWER INDUSTRY DEVELOPMENT IN THE REPUBLIC OF Approval of State Ecological Examination Rules” http://adilet.zan.kz/rus/docs/V070004844 , Information and KAZAKHSTAN Legal System of Laws and Regulations of the Republic of Kazakhstan: the Resolution of the Government of

Section 4. “TRANSPARENT TARIFF” CIVIL the Republic of Kazakhstan dated 31 March 2009 “On Approval of the Criteria for the Distribution of Category РУССКИЙ INITIATIVE: CONTENT AND WAYS OF I Facilities Subject to State Ecological Examination Among the Authorized Bodies in the Area of Environmen- IMPLEMENTATION tal Protection and Its Territorial Units” http://adilet.zan.kz/rus/docs/P090000449_#z7 , Department for Natu- ral Resources and Nature Use Regulation of Akmola Region: Samples (state ecological examination) http:// BASIC QUESTIONNAIRE ON INDICATORS upr.akmol.kz/obrazci__provedenie_gosydarstvennoj_ekologicheskoj_ekspertizi_.html , Department for Natural Resources and Nature Use Regulation of the East Kazakhstan Region: the Process Scheme for Carrying Out of ENGLISH the State Ecological Examination in EKR , SUMMARY TABLE of selected indicators of http://e-priroda.gov.kz/index.php?page=top_expertiza&hl=ru_RU “Electricity Governance Initiative” program response from the RK Ministry of Environmental Protection. SUMMARY TABLE Indicators on the “Political Process” of Management of the Electricity Power Sector in Kazakhstan TABLE OF INDICATORS on “Political Process” of the Electricity Power Sector Management in Kazakhstan SUMMARY TABLE indicators on “Regulatory Process” of electricity sector management of Kazakhstan Table of evaluation of “Regulatory Process” indicators of the electricity sector governance in Kazakhstan SUMMARY TABLE of indicators on the evaluation of ecological and social aspects of the Kazakhstan’s electrical power sector management TABLE OF INDICATORS on the evaluation of ecological and social aspects of Kazakhstan’s electricity sector management FILLED PROJECT INDICATORS REGULATORY PROCESS INDICATORS

148 TABLE OF CONTENT PP 31 PUBLIC PARTICIPATION IN THE DEVELOPMENT OF THE POLICY TO REDUCE Section 1. HISTORY AND CURRENT STATUS OF ELECTRIC POWER INDUSTRY ENVIRONMENTAL EFFECTS ҚАЗАҚША Section 2. DEVELOPMENT OBJECTIVES Quality Ele- Section 3. MAIN PRINCIPLES AND STRATEGIES Index Explanation FOR ELECTRIC POWER INDUSTRY ments DEVELOPMENT IN THE REPUBLIC OF KAZAKHSTAN Consideration Section 4. “TRANSPARENT TARIFF” CIVIL РУССКИЙ INITIATIVE: of multiple ap- No The policy to reduce the environmental effects is developed by ME & WR. CONTENT AND WAYS OF proaches IMPLEMENTATION Proof of consul- No documents found for the analysis of public proposals or the reasons for No BASIC QUESTIONNAIRE ON INDICATORS tations their acceptance or rejection. ENGLISH Systematic ef- SUMMARY TABLE of selected indicators of forts to consult “Electricity Governance Initiative” program No Consultations are held only within the framework and extent required by law. the affected SUMMARY TABLE Indicators on the “Political communities Process” of Management of the Electricity Power Sector in Kazakhstan Multiple mecha- Only one standard mechanism of participation is usually used: public hear- TABLE OF INDICATORS on “Political Process” nisms for public No ing (for construction projects) or delivery to the experts (draft laws and regu- of the Electricity Power Sector Management in Kazakhstan participation lations). SUMMARY TABLE indicators on “Regulatory DETAILED EXPLANATION: Process” of electricity sector management of Kazakhstan RATING SELECTION Table of evaluation of “Regulatory Process” indicators of the electricity sector governance in The rating is not applicable / Not rated Kazakhstan SUMMARY TABLE of indicators on the evaluation Management and technological capabilities that have low impact on the environment “Low” of ecological and social aspects of the were not considered. Kazakhstan’s electrical power sector management TABLE OF INDICATORS on the evaluation of Consideration of management and technological capabilities that have low impact on “Low to Average” ecological and social aspects of Kazakhstan’s the environment meets one quality element electricity sector management FILLED PROJECT INDICATORS Consideration of management and technological capabilities that have low impact on Medium REGULATORY PROCESS INDICATORS the environment meets two quality elements

Consideration of management and technological capabilities that have low impact on Medium-“High” the environment meets three quality elements

Consideration of management and technological capabilities that have low impact on “High” the environment meets four quality elements

149 TABLE OF CONTENT Name of the researcher and organization: Vadim Litvinov, expert of Ecology-Youth-Initiative-Development PF, Section 1. HISTORY AND CURRENT STATUS OF ELECTRIC POWER INDUSTRY member of Republican Association NGO “Transparent Tariff”. ҚАЗАҚША Section 2. DEVELOPMENT OBJECTIVES Information source: Electricity Sector Development Program, publications in mass media, official website of Section 3. MAIN PRINCIPLES AND STRATEGIES MINT. FOR ELECTRIC POWER INDUSTRY DEVELOPMENT IN THE REPUBLIC OF Supplemental information: According to the conclusion made by the Accounts Committee, a number of facil- KAZAKHSTAN ity construction measures in the area of renewable energy sources were not implemented in 2010-2012 Section 4. “TRANSPARENT TARIFF” CIVIL РУССКИЙ INITIATIVE: due to the absence of potential investors. Thus, the small 42 MW HPP’s on Coxu river were not put into CONTENT AND WAYS OF operation, as well as the 4.37 MW Baskan, 5 MW Issyk, 4.8 MW Lepsy and 51 MW WPP’s near the Shelek IMPLEMENTATION passage, 51 MW WPP near Dzhungar gates in Almaty region, 24 MW WPP in East Kazakhstan Region and 40 MW WPP in Mangistau Region. Thus, the measures provided by the program to reduce the environment BASIC QUESTIONNAIRE ON INDICATORS impact of the electricity sector were not supported by the business community. ENGLISH

SUMMARY TABLE of selected indicators of “Electricity Governance Initiative” program SUMMARY TABLE Indicators on the “Political Process” of Management of the Electricity Power Sector in Kazakhstan TABLE OF INDICATORS on “Political Process” of the Electricity Power Sector Management in Kazakhstan SUMMARY TABLE indicators on “Regulatory Process” of electricity sector management of Kazakhstan Table of evaluation of “Regulatory Process” indicators of the electricity sector governance in Kazakhstan SUMMARY TABLE of indicators on the evaluation of ecological and social aspects of the Kazakhstan’s electrical power sector management TABLE OF INDICATORS on the evaluation of ecological and social aspects of Kazakhstan’s electricity sector management FILLED PROJECT INDICATORS REGULATORY PROCESS INDICATORS

150 TABLE OF CONTENT PP 32 Section 1. HISTORY AND CURRENT STATUS OF INCLUSION OF ENVIRONMENTAL ISSUE CONSIDERATION INTO THE NATIONAL PLAN ELECTRIC POWER INDUSTRY FOR ELECTRICITY SECTOR ҚАЗАҚША Section 2. DEVELOPMENT OBJECTIVES Quality Ele- Indica- Section 3. MAIN PRINCIPLES AND STRATEGIES Explanation FOR ELECTRIC POWER INDUSTRY ments tor DEVELOPMENT IN THE REPUBLIC OF KAZAKHSTAN

The issues of environmental security are out of the competence of MINT, РУССКИЙ Section 4. “TRANSPARENT TARIFF” CIVIL Consideration of INITIATIVE: that’s why the measures to reduce the environmental impact are not planned environmental No CONTENT AND WAYS OF and are not considered when preparing plans for the electricity sector’s de- IMPLEMENTATION issues velopment. BASIC QUESTIONNAIRE ON INDICATORS

Power Supply Act does not contain any conservation standards and refer- ENGLISH Comprehensive ences to Energy Conservation Act. consideration of No SUMMARY TABLE of selected indicators of Competence of MINT does not include the consideration of environmental “Electricity Governance Initiative” program the impact issues. SUMMARY TABLE Indicators on the “Political Process” of Management of the Electricity Power Multilateral Public participation is based on a standard and not always effective mecha- Sector in Kazakhstan mechanism for nism of posting draft laws on the websites of state bodies, mailing to accred- No TABLE OF INDICATORS on “Political Process” public participa- ited organizations and experts. Other mechanisms for public participation of the Electricity Power Sector Management in Kazakhstan tion are not widespread. SUMMARY TABLE indicators on “Regulatory Systematic ef- Process” of electricity sector management of Kazakhstan forts to obtain The energy sector development plan is prepared with the assistance of ac- contributions credited private business entities and the National Chamber of Entrepre- No Table of evaluation of “Regulatory Process” from various neurs. No information about the systematic attraction of other stakeholders indicators of the electricity sector governance in Kazakhstan types of stake- or about the use of different channels to obtain feedback from the public. holders SUMMARY TABLE of indicators on the evaluation of ecological and social aspects of the The Energy Sector Development Program provides a detailed description Kazakhstan’s electrical power sector management Disclosure of Yes and prospects for the development of energy sector, including some envi- TABLE OF INDICATORS on the evaluation of comments ecological and social aspects of Kazakhstan’s ronmental indexes. electricity sector management Explanation of FILLED PROJECT INDICATORS the implemen- Neither MINT, nor ME & WR analyze the public propositions and explana- REGULATORY PROCESS INDICATORS tation of public No tions submitted in connection with the acceptance or rejection of applica- contribution tions. into the final decision

151 TABLE OF CONTENT DETAILED EXPLANATION: The only document that indirectly affects the environmental situation is the Energy Section 1. HISTORY AND CURRENT STATUS OF ELECTRIC POWER INDUSTRY Conservation Program, but it does not contain any environmental indicators (reduction of emissions, discharges, ҚАЗАҚША Section 2. DEVELOPMENT OBJECTIVES waste, etc.). The Energy Sector Development Program does not provide an analysis of the increase or decrease in environmental load or any other environmental effects from the program’s implementation. Section 3. MAIN PRINCIPLES AND STRATEGIES FOR ELECTRIC POWER INDUSTRY DEVELOPMENT IN THE REPUBLIC OF RATING SELECTION KAZAKHSTAN

Section 4. “TRANSPARENT TARIFF” CIVIL РУССКИЙ INITIATIVE: The rating is not applicable / Not rated CONTENT AND WAYS OF IMPLEMENTATION Environmental issues are not included into the electricity sector development plan in “Low” full BASIC QUESTIONNAIRE ON INDICATORS Consideration of environmental issues in the electricity sector development plan meets ENGLISH “Low to Average” one quality element SUMMARY TABLE of selected indicators of “Electricity Governance Initiative” program Consideration of environmental issues in the electricity sector development plan meets Medium SUMMARY TABLE Indicators on the “Political two quality elements Process” of Management of the Electricity Power Sector in Kazakhstan Consideration of environmental issues in the electricity sector development plan meets Medium-“High” TABLE OF INDICATORS on “Political Process” three quality elements of the Electricity Power Sector Management in Kazakhstan Consideration of environmental issues in the electricity sector development plan meets “High” SUMMARY TABLE indicators on “Regulatory four or more quality elements Process” of electricity sector management of Kazakhstan Table of evaluation of “Regulatory Process” Name of the researcher and organization: Vadim Litvinov, expert of Ecology-Youth-Initiative-Development PF, indicators of the electricity sector governance in member of Republican Association NGO “Transparent Tariff”. Kazakhstan Information source: Responses from the authorized bodies, Program for Electricity Sector Development in the SUMMARY TABLE of indicators on the evaluation of ecological and social aspects of the Republic of Kazakhstan 2010 – 20141, Energy Conservation Program until 2015. Kazakhstan’s electrical power sector management TABLE OF INDICATORS on the evaluation of ecological and social aspects of Kazakhstan’s electricity sector management FILLED PROJECT INDICATORS REGULATORY PROCESS INDICATORS

152 TABLE OF CONTENT PP 33 Section 1. HISTORY AND CURRENT STATUS OF COMPLETENESS ASSESSMENT OF THE LAWS IMPACTS ON THE ENVIRONMENT, ELECTRIC POWER INDUSTRY POLICY AND PROCEDURES ҚАЗАҚША Section 2. DEVELOPMENT OBJECTIVES Quality Ele- Indica- Section 3. MAIN PRINCIPLES AND STRATEGIES Explanation FOR ELECTRIC POWER INDUSTRY ments tor DEVELOPMENT IN THE REPUBLIC OF KAZAKHSTAN

Requirements for the assessment of environmental impact are legally fixed РУССКИЙ Section 4. “TRANSPARENT TARIFF” CIVIL Requirements INITIATIVE: by an Order issued by the Minister of Environment of the Republic of Kazakh- for environmen- CONTENT AND WAYS OF Yes stan dated 28 June 2007 in the “Regulations on the Assessment of Environ- IMPLEMENTATION tal impact as- mental Effect from Planned Economic and Other Activities When Working sessment BASIC QUESTIONNAIRE ON INDICATORS Out the Pre-planned, Planned, Pre-project and Project Documentation”. ENGLISH According to the Resolution of the Government of the Republic of Kazakh- SUMMARY TABLE of selected indicators of stan dated 21 August 2003 “On Approval of the Rules for Organization of “Electricity Governance Initiative” program Legislative Work in the Authorized Bodies of the Republic of Kazakhstan”, SUMMARY TABLE Indicators on the “Political when predicting the social consequences of adopting a legislative act, it is Process” of Management of the Electricity Power Recommenda- necessary to analyze the possible impact of that act on the development of Sector in Kazakhstan tions for social the entire society and its separate social groups, the impact on the increase Yes TABLE OF INDICATORS on “Political Process” impact assess- of living standards: impact on the level of education and employment of of the Electricity Power Sector Management in ment the population, social structure, the availability of health care, the improve- Kazakhstan ment of housing conditions, the development of civil society institutions SUMMARY TABLE indicators on “Regulatory and on other such consequences. The analysis is performed according to the Process” of electricity sector management of “Guidelines for the Prediction of Social and Economic Consequences from Kazakhstan the Adoption of Draft Laws and Regulations”. Table of evaluation of “Regulatory Process” indicators of the electricity sector governance in According to the Resolution of the Government of the Republic of Kazakhstan Kazakhstan dated 18 March 2010 “On Approval of the Rules for Sectorial Programs’ De- SUMMARY TABLE of indicators on the evaluation velopment, Implementation, Monitoring, Evaluation and Control”, the struc- of ecological and social aspects of the ture of sectorial programs shall contain a section “Analysis of the Current Kazakhstan’s electrical power sector management Situation”. TABLE OF INDICATORS on the evaluation of Recommenda- ecological and social aspects of Kazakhstan’s Content of this section “Analysis of the Current Situation” shall be as follows: electricity sector management tions for strate- Yes gic assessment • assessment of current situation in the industry (sector), condition and FILLED PROJECT INDICATORS the impact of this sector on social, economic, public and political REGULATORY PROCESS INDICATORS development of the country • analysis of strengths, weaknesses, opportunities and threats to the industry (sector); main problems, trends and background for development in the relevant industry (sector)

153 TABLE OF CONTENT • analysis of innovation and technological development in the industry Section 1. HISTORY AND CURRENT STATUS OF ELECTRIC POWER INDUSTRY (sector), including the list of critical technologies realized through ҚАЗАҚША Section 2. DEVELOPMENT OBJECTIVES the target technological programs (if available). It is also necessary to analyze the innovative component of the activities aimed to improve Section 3. MAIN PRINCIPLES AND STRATEGIES FOR ELECTRIC POWER INDUSTRY management techniques and the provision of public services to the DEVELOPMENT IN THE REPUBLIC OF KAZAKHSTAN population

Section 4. “TRANSPARENT TARIFF” CIVIL • analysis of current state policy in force for the industry (sector) РУССКИЙ INITIATIVE: CONTENT AND WAYS OF development, including the description of existing regulatory IMPLEMENTATION framework, existing practices and results of the implementation of measures to ensure the industry (sector) development BASIC QUESTIONNAIRE ON INDICATORS • overview of positive foreign experience in resolving existing problems, ENGLISH which can be adapted to the conditions of the Republic of Kazakhstan, SUMMARY TABLE of selected indicators of and of the results of market research, if necessary. “Electricity Governance Initiative” program The Order issued by the Minister of Economic Development and Trade of SUMMARY TABLE Indicators on the “Political the Republic of Kazakhstan dated 30 May 2012 approved the “Methods for Process” of Management of the Electricity Power Evaluation of the Efficiency in Achieving and Realization of Strategic Tasks Sector in Kazakhstan and Objectives in the Sector / Area / Region Supervised”. TABLE OF INDICATORS on “Political Process” of the Electricity Power Sector Management in Program for Electricity Sector Development in the Republic of Kazakhstan Kazakhstan for 2010-2014 contains the following: SUMMARY TABLE indicators on “Regulatory Process” of electricity sector management of • Analysis of current situation Kazakhstan • Assessment of the current situation of the condition of the industry Table of evaluation of “Regulatory Process” indicators of the electricity sector governance in • Analysis of the strengths, weaknesses, opportunities and threats to Kazakhstan the industry Accomplished SUMMARY TABLE of indicators on the evaluation strategic assess- Yes • Main problems, trends and background for development in the industry of ecological and social aspects of the ment Kazakhstan’s electrical power sector management • Analysis of current state policy in force for the industry development, TABLE OF INDICATORS on the evaluation of including the description of the existing regulatory framework, ecological and social aspects of Kazakhstan’s existing practices and results of the implementation of measures to electricity sector management ensure the industry development FILLED PROJECT INDICATORS • Overview of positive foreign experience in resolving existing problems, REGULATORY PROCESS INDICATORS which can be adapted to the conditions of the Republic of Kazakhstan, and of the results of market research.

154 TABLE OF CONTENT DETAILED EXPLANATION Section 1. HISTORY AND CURRENT STATUS OF ELECTRIC POWER INDUSTRY RATING SELECTION ҚАЗАҚША Section 2. DEVELOPMENT OBJECTIVES Section 3. MAIN PRINCIPLES AND STRATEGIES FOR ELECTRIC POWER INDUSTRY The rating is not applicable / Not rated DEVELOPMENT IN THE REPUBLIC OF KAZAKHSTAN Reports or activity do not meet any quality element “Low” Section 4. “TRANSPARENT TARIFF” CIVIL РУССКИЙ INITIATIVE: CONTENT AND WAYS OF Reports or activity meet one quality element “Low to Average” IMPLEMENTATION Reports or activity meet two quality elements Medium BASIC QUESTIONNAIRE ON INDICATORS Reports or activity meet three quality elements Medium-“High” ENGLISH

SUMMARY TABLE of selected indicators of “Electricity Governance Initiative” program Reports or activity meet all quality elements “High” SUMMARY TABLE Indicators on the “Political Process” of Management of the Electricity Power Name of the researcher and organization: Kurmanbaeva A. A. PA “Committee for Public Control over the Execu- Sector in Kazakhstan tion of State Programs at the Local Level” TABLE OF INDICATORS on “Political Process” of the Electricity Power Sector Management in Information source: Information and Legal System of Laws and Regulations of the Republic of Kazakhstan: Kazakhstan Resolution of the Government of the Republic of Kazakhstan dated 18 March 2010 “On Approval of the Rules for Sectorial Programs Development, Implementation, Monitoring, Evaluation and Control” http://adilet.zan. SUMMARY TABLE indicators on “Regulatory Process” of electricity sector management of kz/rus/docs/P100000218_ , Information and Legal System of Laws and Regulations of the Republic of Kazakh- Kazakhstan stan: Regulations on the Assessment of Environmental Effect from Planned Economic and Other Activities Table of evaluation of “Regulatory Process” When Working Out the Pre-planned, Planned, Pre-project and Project Documentation http://adilet.zan.kz/rus/ indicators of the electricity sector governance in docs/V070004825_ , Information and Legal System of Laws and Regulations of the Republic of Kazakhstan: Kazakhstan Methods for Evaluation of the Efficiency in Achieving and Realization of Strategic Tasks and Objectives in the SUMMARY TABLE of indicators on the evaluation Sector / Area / Region Supervised http://adilet.zan.kz/rus/docs/V1200007761 , Program for Electricity Sector of ecological and social aspects of the Development in the Republic of Kazakhstan for 2010-2014 http://www.mint.gov.kz/?id=124 . Kazakhstan’s electrical power sector management TABLE OF INDICATORS on the evaluation of ecological and social aspects of Kazakhstan’s electricity sector management FILLED PROJECT INDICATORS REGULATORY PROCESS INDICATORS

155 TABLE OF CONTENT PP 34 Section 1. HISTORY AND CURRENT STATUS OF PUBLIC PARTICIPATION IN THE ASSESSMENT OF ENVIRONMENTAL IMPACT ELECTRIC POWER INDUSTRY ҚАЗАҚША Quality Ele- Indica- Section 2. DEVELOPMENT OBJECTIVES Explanation ments tor Section 3. MAIN PRINCIPLES AND STRATEGIES FOR ELECTRIC POWER INDUSTRY DEVELOPMENT IN THE REPUBLIC OF Public participa- KAZAKHSTAN tion within the Yes Formally, the legislation provides for the public participation in EIA processes Section 4. “TRANSPARENT TARIFF” CIVIL РУССКИЙ INITIATIVE: framework CONTENT AND WAYS OF IMPLEMENTATION Use of more than one mech- Use of any mechanisms other than public hearings for a draft EIA project in No BASIC QUESTIONNAIRE ON INDICATORS anisms for pub- an already existing project is rather an exception than the usual practice. ENGLISH lic participation SUMMARY TABLE of selected indicators of Adequate period Process of collection and analysis of comments from the public has not been “Electricity Governance Initiative” program No for comments adjusted. SUMMARY TABLE Indicators on the “Political Process” of Management of the Electricity Power Sector in Kazakhstan Public dissemination of EIA No Public dissemination of the EIA reports is out of the normal practice. TABLE OF INDICATORS on “Political Process” of the Electricity Power Sector Management in reports Kazakhstan Guidelines for SUMMARY TABLE indicators on “Regulatory There is instruction on holding of public hearings approved by the Order of public consulta- Yes Process” of electricity sector management of ME & WR, at the legislative level. Kazakhstan tion Table of evaluation of “Regulatory Process” Public comments are either not taken into account at all, or are considered indicators of the electricity sector governance in Disclosure of Kazakhstan formally, in the form of questions asked during public hearings (there are public com- No cases when such questions either remain unanswered, or are not included in SUMMARY TABLE of indicators on the evaluation ments on EIA of ecological and social aspects of the the minutes) Kazakhstan’s electrical power sector management TABLE OF INDICATORS on the evaluation of Public comments are ad- Statutory form of EIA report does not provide for the analysis and consider- ecological and social aspects of Kazakhstan’s No electricity sector management dressed in the ation of public comments FILLED PROJECT INDICATORS final EIA report REGULATORY PROCESS INDICATORS

156 TABLE OF CONTENT DETAILED EXPLANATION: According to the accepted practice, the public is only informed about the results Section 1. HISTORY AND CURRENT STATUS OF ELECTRIC POWER INDUSTRY of all the work carried out to assess the environmental impact of the project proposed. Furthermore, ac- ҚАЗАҚША Section 2. DEVELOPMENT OBJECTIVES cording to the response of ME & WR, familiarization with reports before the EIA and the EIA itself are only possible in the case of the owner’s written consent. Instruction on the Holding of Public Hearings does Section 3. MAIN PRINCIPLES AND STRATEGIES FOR ELECTRIC POWER INDUSTRY not contain any requirements for the extent of disclosure of the information contained in the EIA report. DEVELOPMENT IN THE REPUBLIC OF Moreover, reports on EIA projects may not be published by state bodies, regardless of the kind of environ- KAZAKHSTAN mental risk that these projects carry for the population. Section 4. “TRANSPARENT TARIFF” CIVIL РУССКИЙ INITIATIVE: CONTENT AND WAYS OF IMPLEMENTATION RATING SELECTION

BASIC QUESTIONNAIRE ON INDICATORS The rating is not applicable / Not rated ENGLISH Reports or activity do not meet any quality element “Low” SUMMARY TABLE of selected indicators of “Electricity Governance Initiative” program Reports or activity meet one quality element “Low to Average” SUMMARY TABLE Indicators on the “Political Process” of Management of the Electricity Power Reports or activity meet two quality elements Medium Sector in Kazakhstan TABLE OF INDICATORS on “Political Process” Reports or activity meet three quality elements Medium-“High” of the Electricity Power Sector Management in Kazakhstan Reports or activity meet all quality elements “High” SUMMARY TABLE indicators on “Regulatory Process” of electricity sector management of Name of the researcher and organization: Vadim Litvinov, expert of Ecology-Youth-Initiative-Development PF, Kazakhstan member of Republican Association NGO “Transparent Tariff”. Table of evaluation of “Regulatory Process” indicators of the electricity sector governance in Information source: Rules for Holding of Public Hearings, official websites of the authorized bodies. Kazakhstan Supplemental information: The only record of a public hearing on EIA published on the website of National SUMMARY TABLE of indicators on the evaluation Center of Aarhus was made on 23 November 2013, and information about the hearing was published 22 of ecological and social aspects of the November 2013. Now the Rules for Holding of Public Hearings are amended so that an announcement shall Kazakhstan’s electrical power sector management be issued at least 20 days before the hearing date. According to the requirements of the Environmental Code, TABLE OF INDICATORS on the evaluation of holding of public hearings is necessary only for the companies of category I and II, therefore companies of other ecological and social aspects of Kazakhstan’s electricity sector management categories (e.g. Eastern Kazakhstan Regional Electric Company is an company of category IV) have the right not to apply this or any other instrument for public participation. FILLED PROJECT INDICATORS REGULATORY PROCESS INDICATORS

157 TABLE OF CONTENT

Section 1. HISTORY AND CURRENT STATUS OF REGULATORY PROCESS INDICATORS ELECTRIC POWER INDUSTRY ҚАЗАҚША Section 2. DEVELOPMENT OBJECTIVES RP 1 INSTITUTIONAL STRUCTURE FOR REGULATORY DECISIONS Section 3. MAIN PRINCIPLES AND STRATEGIES FOR ELECTRIC POWER INDUSTRY Quality Elements Indicator Explanation DEVELOPMENT IN THE REPUBLIC OF KAZAKHSTAN Not applicable / Not rated

Section 4. “TRANSPARENT TARIFF” CIVIL РУССКИЙ INITIATIVE: According to the “Provision Concerning the Agency of CONTENT AND WAYS OF IMPLEMENTATION the Republic of Kazakhstan for the Regulation of Natural Monopolies” approved by the Resolution of the Govern- BASIC QUESTIONNAIRE ON INDICATORS ment of the Republic of Kazakhstan dated 12 October

2007, Art. 1. p. 7, the Agency, acting within its compe- ENGLISH tence according to the applicable law of the Republic of SUMMARY TABLE of selected indicators of Kazakhstan, takes decisions that are formalized by the “Electricity Governance Initiative” program orders of Agency Chairman and other acts prescribed by SUMMARY TABLE Indicators on the “Political the legislation of the Republic of Kazakhstan. According Process” of Management of the Electricity Power to Art. 23, the collegiate management body of the Agency Sector in Kazakhstan Regulatory decisions are made is the Board, which consists of seven members. Agency TABLE OF INDICATORS on “Political Process” through the normal executive Board is headed by the Agency Chairman and consists of of the Electricity Power Sector Management in No the Agency Chairman, his deputies and representatives Kazakhstan decision-making process within the ministry framework from the Government of the Republic of Kazakhstan. SUMMARY TABLE indicators on “Regulatory Process” of electricity sector management of Agency Board is entitled to consider and to make deci- Kazakhstan sions on any matters within the competence of the Agen- Table of evaluation of “Regulatory Process” cy, except for the matters referred to the competence of indicators of the electricity sector governance in executive secretary. Decisions taken at the Board Meet- Kazakhstan ing are formalized by the resolutions of Agency Board SUMMARY TABLE of indicators on the evaluation and form a basis for Agency Chairman’s decisions. Ac- of ecological and social aspects of the cording to the Law of the Republic of Kazakhstan “On Kazakhstan’s electrical power sector management Natural Monopolies” Art. 12, position, structure and staff TABLE OF INDICATORS on the evaluation of size of an authorized body are established by the Gov- ecological and social aspects of Kazakhstan’s ernment of the Republic of Kazakhstan. electricity sector management FILLED PROJECT INDICATORS Most of the regulatory decisions are made through normal executive REGULATORY PROCESS INDICATORS decision-making process within the ministry framework. However there The structure of the Agency of the Republic of Kazakh- is a separate unit within the ministry, Yes stan for the Regulation of Natural Monopolies includes which is responsible for certain the Department for Electricity and Heat Regulation. decisions (e.g. revision of prices and licensing), individual departments or groups with specific responsibility.

158 TABLE OF CONTENT Resolution of the Government of the Republic of Kazakh- Section 1. HISTORY AND CURRENT STATUS OF ELECTRIC POWER INDUSTRY stan dated 12 October 2007 approves the “Issues of the Agency of the Republic of Kazakhstan for the Regulation ҚАЗАҚША Section 2. DEVELOPMENT OBJECTIVES A separate independent regulatory of Natural Monopolies. This Resolution also approves Section 3. MAIN PRINCIPLES AND STRATEGIES body is responsible for the Yes the “Provision Concerning the Agency of the Republic of FOR ELECTRIC POWER INDUSTRY decisions concerning regulation and DEVELOPMENT IN THE REPUBLIC OF Kazakhstan for the Regulation of Natural Monopolies”. KAZAKHSTAN supervision. Antimonopoly regulation provided by the Agency in- Section 4. “TRANSPARENT TARIFF” CIVIL РУССКИЙ INITIATIVE: cludes the entire range of economic, administrative and CONTENT AND WAYS OF legislative measures implemented by the state. IMPLEMENTATION DETAILED EXPLANATION: In 2003, implementation of the state antimonopoly policy in the Republic of Ka- BASIC QUESTIONNAIRE ON INDICATORS zakhstan was entrusted to the Agency of the Republic of Kazakhstan for the Regulation of Natural Monopo- lies and Protection of Competition, which is directly subordinated and accountable to the President of the ENGLISH Republic. Thus, when exercising its powers, the Agency was legally independent from the country Government SUMMARY TABLE of selected indicators of “Electricity Governance Initiative” program and Parliament. In 2004, as a result of administrative reform, the Head of the State took a decision to create the Competition Protection Committee under the Ministry of Industry and Trade of the Republic of Kazakh- SUMMARY TABLE Indicators on the “Political stan and the Agency of the Republic of Kazakhstan for the Regulation of Natural Monopolies. Separation of Process” of Management of the Electricity Power Sector in Kazakhstan antimonopoly authorities concretized their functions and powers. In 2007, the Ministry of Energy and Mineral Resources and the Ministry of Transport and Communications transferred the following technical issues of TABLE OF INDICATORS on “Political Process” regulation: licensing, determination of technical specifications for non-discriminatory access, standartization of the Electricity Power Sector Management in Kazakhstan issues, approval of investment programs to the infrastructural regulator. Agency of the Republic of Kazakhstan for the Regulation of Natural Monopolies is focused on the state price regulation in the monopolistic sectors SUMMARY TABLE indicators on “Regulatory of economy, except for telecommunications services. Process” of electricity sector management of Kazakhstan RATING SELECTION Table of evaluation of “Regulatory Process” indicators of the electricity sector governance in The rating is not applicable / Not rated Kazakhstan SUMMARY TABLE of indicators on the evaluation Reports or activity do not meet any quality element “Low” of ecological and social aspects of the Kazakhstan’s electrical power sector management Reports or activity meet one quality element “Low to Average” TABLE OF INDICATORS on the evaluation of Reports or activity meet two quality elements “Average” ecological and social aspects of Kazakhstan’s electricity sector management Reports or activity meet three quality elements “Average to High” FILLED PROJECT INDICATORS Reports or activity meet all quality elements “High” REGULATORY PROCESS INDICATORS

Name of the researcher and organization: Kurmanbaeva A. A. PA “Committee for Public Control over the Execu- tion of State Programs at the Local Level” Information source: Official website of ARNM: Agency CA Structure and data about the heads of departments http://www.arem.gov.kz/ru/103/#!prettyPhoto , Official website of ARNM: Agency Provision http://www.arem. gov.kz/ru/101/ , Official website of ARNM: History of Agency Establishmenthttp://www.arem.gov.kz/ru/3/ .

159 TABLE OF CONTENT RP 2 POWERS OF REGULATORY BODY Section 1. HISTORY AND CURRENT STATUS OF ELECTRIC POWER INDUSTRY Quality Elements Indicator Explanation ҚАЗАҚША Section 2. DEVELOPMENT OBJECTIVES Section 3. MAIN PRINCIPLES AND STRATEGIES Powers FOR ELECTRIC POWER INDUSTRY DEVELOPMENT IN THE REPUBLIC OF KAZAKHSTAN To perform its functions, an authorized body may, under Art. 14 of the Law of

Section 4. “TRANSPARENT TARIFF” CIVIL the Republic of Kazakhstan “On Natural Monopolies”, request and receive the РУССКИЙ INITIATIVE: information necessary to exercise its powers from individuals and legal enti- CONTENT AND WAYS OF ties, including state bodies, local governments, and their officers in compli- IMPLEMENTATION Information and Yes ance with the requirements established by the legislative acts of the Republic proof BASIC QUESTIONNAIRE ON INDICATORS Kazakhstan on the disclosure of the information, which represents commer-

cial and other secrets protected by law. Licensor may require the licensee, ENGLISH acting within its competence, to represent the relevant documents and may SUMMARY TABLE of selected indicators of obtain information necessary to perform his control functions. “Electricity Governance Initiative” program SUMMARY TABLE Indicators on the “Political As regards the facts of antimonopoly law violations, the Agency of the Repub- Process” of Management of the Electricity Power lic of Kazakhstan for Protection of Competition completed 35 investigations Sector in Kazakhstan since the beginning of 2013. At the same time, the share of investigations TABLE OF INDICATORS on “Political Process” where violations detected was 88.6 % of the total number of completed in- of the Electricity Power Sector Management in vestigations. Kazakhstan Investigations were structured by violation types: 4 ea anticompetitive con- SUMMARY TABLE indicators on “Regulatory certed action and agreement of market participants; 8 ea abuse of dominant Process” of electricity sector management of Kazakhstan position; 8 ea violation connected with unfair competition; 11 ea anti- com- petitive actions of state bodies. Table of evaluation of “Regulatory Process” indicators of the electricity sector governance in According to the results of these investigations, the following decisions have Kazakhstan been taken: SUMMARY TABLE of indicators on the evaluation 12 investigations with a decision to initiate proceedings on administrative of ecological and social aspects of the Investigation: Yes Kazakhstan’s electrical power sector management offences, 17 investigations with a decision to prescribe the elimination of violations of antimonopoly legislation of the Republic of Kazakhstan and its con- TABLE OF INDICATORS on the evaluation of ecological and social aspects of Kazakhstan’s sequences, 4 investigations stopped due to the absence of violations of the electricity sector management antimonopoly legislation of Kazakhstan (in respect of 8 market participants and 1 state agency), 2 investigations with a decision to initiate proceedings FILLED PROJECT INDICATORS on administrative offence against an officer and with a decision to prescribe REGULATORY PROCESS INDICATORS the elimination of violations of the antimonopoly legislation of the Republic of Kazakhstan (in respect of 1 market participant and 1 public authority). Con- cerning the facts of antimonopoly law violations, the Agency of the Republic of Kazakhstan for Protection of Competition completed 170 investigations in 2012, that is 33 % more than in 2011 (128 investigations completed in 2011). At the same time, in 2012, the share of investigations where violations detected was 89.4 % of the total number of completed investigations.

160 TABLE OF CONTENT According to the Provision Concerning the Agency of the Republic of Kazakh- Section 1. HISTORY AND CURRENT STATUS OF ELECTRIC POWER INDUSTRY stan for the Regulation of Natural Monopolies, the Agency’s functions are: ҚАЗАҚША Section 2. DEVELOPMENT OBJECTIVES • Control of compliance of the activities of natural monopoly entities Section 3. MAIN PRINCIPLES AND STRATEGIES as per the requirements provided by the legislation of the Republic of FOR ELECTRIC POWER INDUSTRY DEVELOPMENT IN THE REPUBLIC OF Kazakhstan for natural monopolies and regulated markets KAZAKHSTAN • License control Section 4. “TRANSPARENT TARIFF” CIVIL РУССКИЙ INITIATIVE: • Control within its competence on the observance of the Law of CONTENT AND WAYS OF IMPLEMENTATION the Republic of Kazakhstan “On Electric Power Industry” by energy producing and supplying organizations BASIC QUESTIONNAIRE ON INDICATORS • Control over the price fixing by the participants of regulated markets, as well as over the execution of their obligations provided by legislation ENGLISH SUMMARY TABLE of selected indicators of of the Republic of Kazakhstan for natural monopolies and regulated “Electricity Governance Initiative” program markets, and over set prices regulated by the state. Subordination: Yes SUMMARY TABLE Indicators on the “Political According to Art. 17, the Agency has the following rights and obligations: Process” of Management of the Electricity Power Sector in Kazakhstan • To give mandatory prescriptions to natural monopoly entities and state bodies when they violate the legislation of the Republic of TABLE OF INDICATORS on “Political Process” of the Electricity Power Sector Management in Kazakhstan for natural monopolies and regulated markets, including Kazakhstan the legislation for reorganization of natural monopoly entities and/ SUMMARY TABLE indicators on “Regulatory or for disposal of property Process” of electricity sector management of • To provide the participants of regulated market with mandatory Kazakhstan prescriptions on the performance of their obligations under the Law Table of evaluation of “Regulatory Process” of the Republic of Kazakhstan “On Natural Monopolies and Regulated indicators of the electricity sector governance in Kazakhstan Markets” SUMMARY TABLE of indicators on the evaluation • To take within its competence decisions concerning the violation of ecological and social aspects of the of the legislation of the Republic of Kazakhstan for combatting Kazakhstan’s electrical power sector management violations and elimination of their consequences in the areas of TABLE OF INDICATORS on the evaluation of natural monopolies ecological and social aspects of Kazakhstan’s electricity sector management FILLED PROJECT INDICATORS REGULATORY PROCESS INDICATORS

161 TABLE OF CONTENT According to the Provision Concerning the Agency of the Republic of Kazakh- Section 1. HISTORY AND CURRENT STATUS OF ELECTRIC POWER INDUSTRY stan for the Regulation of Natural Monopolies, the Agency’s functions are: ҚАЗАҚША Section 2. DEVELOPMENT OBJECTIVES • Causing and consideration of proceedings concerning administrative Section 3. MAIN PRINCIPLES AND STRATEGIES offences, as well as imposition of administrative penalties according to FOR ELECTRIC POWER INDUSTRY DEVELOPMENT IN THE REPUBLIC OF the procedure established by the Code of the Republic of Kazakhstan KAZAKHSTAN “On Administrative Offences”

Section 4. “TRANSPARENT TARIFF” CIVIL РУССКИЙ INITIATIVE: • To give prescriptions in case of violation of the legislation of the CONTENT AND WAYS OF Republic of Kazakhstan; According to the Code of the Republic of IMPLEMENTATION Penalties for Kazakhstan “On Administrative Offences” Art. 147-3, failure to comply violation of or- Yes with the instruction or not complying with it in full, failure to provide BASIC QUESTIONNAIRE ON INDICATORS ders: information or providing incomplete information to antimonopoly ENGLISH authority within a prescribed period, providing unreliable and/or SUMMARY TABLE of selected indicators of false information to antimonopoly authority, obstructing the access “Electricity Governance Initiative” program to premises and territory for the officers of antimonopoly authority SUMMARY TABLE Indicators on the “Political who conduct an investigation entail a fine in an amount of fifty to one Process” of Management of the Electricity Power hundred monthly calculation indexes for individuals, of two hundred Sector in Kazakhstan fifty to three hundred for officers and individual entrepreneurs, of three TABLE OF INDICATORS on “Political Process” hundred fifty to four hundred for legal entities or small or medium of the Electricity Power Sector Management in business and non-profit organizations, of one thousand five hundred Kazakhstan to two thousand for legal entities of large entrepreneurship. SUMMARY TABLE indicators on “Regulatory Process” of electricity sector management of Practice Kazakhstan Table of evaluation of “Regulatory Process” Agency for Regulation of Natural Monopolies exacted over 205 mln KZT in indicators of the electricity sector governance in penalties from the monopolist enterprises in 2012. Within the framework Kazakhstan of control over the compliance with the law and prevention of violations SUMMARY TABLE of indicators on the evaluation of consumer rights, 471 inspection of natural monopoly entities, including of ecological and social aspects of the 175 inspections following customers’ complaints, were held in 2012. There Kazakhstan’s electrical power sector management Exercise of pow- were 744 prescriptions given to eliminate violations of the law, including 71 Yes TABLE OF INDICATORS on the evaluation of ers cases of inspections following complaints, 382 resolutions passed concern- ecological and social aspects of Kazakhstan’s electricity sector management ing cases of administrative offences, and376 proceedings attended. In the first quarter of 2013, there were 128 inspections conducted, 134 proceedings FILLED PROJECT INDICATORS attended, 318 prescriptions given , and54 resolutions passed and as a result, REGULATORY PROCESS INDICATORS the amount of fines imposed is 146.8 mln KZT, and the amount exacted is about 22 mln KZT.

162 TABLE OF CONTENT DETAILED EXPLANATION: According to the Decree of the President of RK dated 13 October 2007, the Agency Section 1. HISTORY AND CURRENT STATUS OF ELECTRIC POWER INDUSTRY of the Republic of Kazakhstan for Protection of Competition was reorganized by removing it from the struc- ҚАЗАҚША Section 2. DEVELOPMENT OBJECTIVES ture of the Ministry of Industry and Trade of the RK. Thus, an extra-departmental antimonopoly authority of the RK with an independent status for implementation of the state antimonopoly policy was established in Section 3. MAIN PRINCIPLES AND STRATEGIES FOR ELECTRIC POWER INDUSTRY the economic sector of the country. APC RK is not only provided with the power to protect competition and re- DEVELOPMENT IN THE REPUBLIC OF strict monopolistic activity, but has also a very important function of control over the activities of state bodies, KAZAKHSTAN and may cancel illegal resolutions issued by the state bodies. The function of pricing plus pricing and tariffs Section 4. “TRANSPARENT TARIFF” CIVIL РУССКИЙ INITIATIVE: approval, that are not suited for the APC, were transferred to three industry regulators: Agency for Regulation CONTENT AND WAYS OF of Natural Monopolies (ARNM), Agency for Information and Communication (AIC) and Agency for Control of IMPLEMENTATION Financial Misconduct (AFC). At present, the mission of Competition Protection Committee of the Republic of Kazakhstan is to develop competition at commodity markets of the republic by the following means: BASIC QUESTIONNAIRE ON INDICATORS

• Combatting unfair competition ENGLISH • Control over the anticompetitive actions SUMMARY TABLE of selected indicators of “Electricity Governance Initiative” program • Control over the prevention of dominant (monopolistic) position abuse at commodity market SUMMARY TABLE Indicators on the “Political • Control over the prevention of the establishment of monopolistically high or low prices by a monopolist Process” of Management of the Electricity Power Sector in Kazakhstan • Control of economic concentration TABLE OF INDICATORS on “Political Process” Antimonopoly legislation of the Republic of Kazakhstan performs restrictive, warning and suppressive func- of the Electricity Power Sector Management in tions. Kazakhstan SUMMARY TABLE indicators on “Regulatory RATING SELECTION Process” of electricity sector management of Kazakhstan The rating is not applicable / Not rated Table of evaluation of “Regulatory Process” indicators of the electricity sector governance in Reports or activity do not meet any quality element “Low” Kazakhstan SUMMARY TABLE of indicators on the evaluation Reports or activity meet one quality element “Low to Average” of ecological and social aspects of the Kazakhstan’s electrical power sector management Reports or activity meet two quality elements “Average” TABLE OF INDICATORS on the evaluation of ecological and social aspects of Kazakhstan’s Reports or activity meet three quality elements “Average to High” electricity sector management Reports or activity meet all quality elements “High” FILLED PROJECT INDICATORS REGULATORY PROCESS INDICATORS Name of the researcher and organization: Kurmanbaeva A. A. PA “Committee for Public Control over the Execu- tion of State Programs at the Local Level” Information source: Code of the Republic of Kazakhstan “On Administrative Offences” dated 30 January 2001 N 155-II http://online.zakon.kz/Document/?doc_id=1021682 , International Information Agency News-Kazakhstan, http://newskaz.ru/incidents/20130201/4713004.html, Forbes Kazakhstan http://forbes.kz/news/2013/04/22/ newsid_25833.

163 TABLE OF CONTENT RP 3 JURISDICTION OF REGULATORY BODY Section 1. HISTORY AND CURRENT STATUS OF ELECTRIC POWER INDUSTRY Quality Elements Indicator Explanation ҚАЗАҚША Section 2. DEVELOPMENT OBJECTIVES Section 3. MAIN PRINCIPLES AND STRATEGIES ARNM functions are determined by a Resolution of the Government of the FOR ELECTRIC POWER INDUSTRY DEVELOPMENT IN THE REPUBLIC OF Republic of Kazakhstan dated 12 October 2007 N943 via the Provision Con- KAZAKHSTAN cerning the Agency of the Republic of Kazakhstan for the Regulation of Natu- Section 4. “TRANSPARENT TARIFF” CIVIL ral Monopolies. Control of power for regulatory bodies in natural monopoly РУССКИЙ INITIATIVE: CONTENT AND WAYS OF sectors is fixed in the Law of the Republic of Kazakhstan “On Natural Monop- IMPLEMENTATION olies”. At the same time, according to Art. 23, collegiate management body of How clearly the the Agency is the Board, which consists of seven members. Agency Board is functions are BASIC QUESTIONNAIRE ON INDICATORS headed by the Agency Chairman. Agency Board consists of the Agency Chair-

defined in ap- ENGLISH No man, his deputies and representatives from the Government of the Republic plicable laws, of Kazakhstan. Agency Board is entitled to consider and to make decisions on SUMMARY TABLE of selected indicators of regulations or any matters within the competence of the Agency, except for matters refer- “Electricity Governance Initiative” program ordinances ring to the competence of executive secretary. Decisions taken at the Board SUMMARY TABLE Indicators on the “Political Meeting are formalized by resolutions of Agency Board and form a basis for Process” of Management of the Electricity Power Sector in Kazakhstan Agency Chairman’s decisions. According to the Law of the Republic of Ka- zakhstan “On Natural Monopolies” Art. 12, position, structure and staff size TABLE OF INDICATORS on “Political Process” of the Electricity Power Sector Management in for an authorized body are established by the Government of the Republic of Kazakhstan Kazakhstan.

SUMMARY TABLE indicators on “Regulatory Regulatory body acts in accordance with the tasks and powers assigned to Process” of electricity sector management of Kazakhstan it and are stated in the Provision: 1) Controls the compliance of activities of natural monopolies via the requirements provided by legislation of the Re- Table of evaluation of “Regulatory Process” indicators of the electricity sector governance in public of Kazakhstan for natural monopolies 2) Inspects the activity of natu- Kazakhstan ral monopoly entities 3) Considers cases on administrative violations of the legislation of the Republic of Kazakhstan for natural monopolies on its own SUMMARY TABLE of indicators on the evaluation of ecological and social aspects of the initiative, on the basis of media reports and other available materials in its Kazakhstan’s electrical power sector management possession and on the basis of written statements and reports provided by TABLE OF INDICATORS on the evaluation of Range of func- state bodies, individuals and legal entities 4) Gives recommendations in the tions assigned case of violation of the legislation of the Republic of Kazakhstan 5) License ecological and social aspects of Kazakhstan’s Yes electricity sector management to a regulatory control; control over compliance of the activities of natural monopolies with- FILLED PROJECT INDICATORS body in the requirements provided by the legislation of the Republic of Kazakhstan for natural monopolies and regulated markets includes the following: REGULATORY PROCESS INDICATORS • Control of procurement costs, which are taken into account when establishing tariffs (prices, rates) or their limit levels and tariff estimates for regulated services (goods, work) provided by a natural monopoly entity (subparagraph 12) of paragraph 1 of Article 14 of the Law of the Republic of Kazakhstan “On Natural Monopolies”) • Monitors the compliance of a natural monopoly entity

164 TABLE OF CONTENT with tariff estimates (subparagraph 13) as per paragraph 1 of Article 14 of Section 1. HISTORY AND CURRENT STATUS OF ELECTRIC POWER INDUSTRY the Law of the Republic of Kazakhstan “On Natural Monopolies”). ҚАЗАҚША Section 2. DEVELOPMENT OBJECTIVES In order to avoid any infringement of the rights and legitimate interests of Section 3. MAIN PRINCIPLES AND STRATEGIES the consumers of regulated services (goods, works) provided by a natural mo- FOR ELECTRIC POWER INDUSTRY DEVELOPMENT IN THE REPUBLIC OF nopoly entity or in order to restrict the economically sound transition from KAZAKHSTAN natural monopoly to competitive market of any relevant commodity market,

Section 4. “TRANSPARENT TARIFF” CIVIL the authorized body controls the following: 1) Alienation and/or other trans- РУССКИЙ INITIATIVE: CONTENT AND WAYS OF actions with the property of natural monopoly entity if the book value of the IMPLEMENTATION alienated property exceeds 0.05 percent of the book value of the entity’s assets, provided that this will not entail increase in tariffs or violation of con- BASIC QUESTIONNAIRE ON INDICATORS sumer rights 2) Cases when a natural monopoly entity hires property for pro-

vision of regulated services (goods, work), book value of which exceeds 0.05 ENGLISH percent of the book value of the entity’s assets, provided that stipulation of SUMMARY TABLE of selected indicators of contract to hire will not entail increase in tariffs or violation of consumer “Electricity Governance Initiative” program rights 3) Carrying out other lawful activities by a natural monopoly entity 4) SUMMARY TABLE Indicators on the “Political Acquisition of shares (stock) by a natural monopoly entity or any other form Process” of Management of the Electricity Power Sector in Kazakhstan of its participation in commercial organizations carrying out activities allowed by the Law; 4-1) acquisition by individuals or legal entities (or group TABLE OF INDICATORS on “Political Process” of entities) of more than ten percent of voting shares (stock) in share capital of the Electricity Power Sector Management in Kazakhstan of a natural monopoly entity 5) Reorganization and liquidation of a natural monopoly entity. To carry out the above actions, the natural monopoly entity SUMMARY TABLE indicators on “Regulatory Process” of electricity sector management of shall submit an application for consent for carrying out such actions to the Kazakhstan competent authority and provide any information necessary for the decision making. Table of evaluation of “Regulatory Process” indicators of the electricity sector governance in Kazakhstan DETAILED EXPLANATION SUMMARY TABLE of indicators on the evaluation of ecological and social aspects of the RATING SELECTION Kazakhstan’s electrical power sector management The rating is not applicable / Not rated TABLE OF INDICATORS on the evaluation of ecological and social aspects of Kazakhstan’s electricity sector management Reports or activity do not meet any quality element “Low” FILLED PROJECT INDICATORS Reports or activity meet one quality element “Low to Average” REGULATORY PROCESS INDICATORS Reports or activity meet two quality elements “Average”

Reports or activity meet three quality elements “Average to High”

Reports or activity meet all quality elements “High”

165 TABLE OF CONTENT Name of the researcher and organization: Kurmanbaeva A. A. PA “Committee for Public Control over the Execu- Section 1. HISTORY AND CURRENT STATUS OF ELECTRIC POWER INDUSTRY tion of State Programs at Local Level” ҚАЗАҚША Section 2. DEVELOPMENT OBJECTIVES Information source: Official website of ARNM: Agency Provision http://www.arem.gov.kz/ru/101/ , Law of the Section 3. MAIN PRINCIPLES AND STRATEGIES Republic of Kazakhstan dated 9 July 1998 N 272-I “On Natural Monopolies and Regulated Markets” http:// FOR ELECTRIC POWER INDUSTRY DEVELOPMENT IN THE REPUBLIC OF online.zakon.kz/Document/?doc_id=1009803. KAZAKHSTAN

Section 4. “TRANSPARENT TARIFF” CIVIL РУССКИЙ INITIATIVE: CONTENT AND WAYS OF IMPLEMENTATION

BASIC QUESTIONNAIRE ON INDICATORS ENGLISH

166 TABLE OF CONTENT RP 6 Section 1. HISTORY AND CURRENT STATUS OF SELECTING OF REGULATORY BODY STAFF ELECTRIC POWER INDUSTRY ҚАЗАҚША Indica- Section 2. DEVELOPMENT OBJECTIVES Quality features Explanation Section 3. MAIN PRINCIPLES AND STRATEGIES tor FOR ELECTRIC POWER INDUSTRY DEVELOPMENT IN THE REPUBLIC OF KAZAKHSTAN According to the Law of the Republic of Kazakhstan dated July 23, 1999, «On Civil Service», Art. 14, «Administrative Civil Position Competition», p. 2, terms Section 4. “TRANSPARENT TARIFF” CIVIL РУССКИЙ INITIATIVE: and conditions of competition for administrative public positions including CONTENT AND WAYS OF the procedure of forming a competition committee are determined by the IMPLEMENTATION Authorized Body; p. 3, competition is held by a public body which has vacancies or by the Authorized Body on the decision of the President of the Repub- BASIC QUESTIONNAIRE ON INDICATORS

Independence lic of Kazakhstan, after publication of announcement about the competition ENGLISH of selection pro- No in national and Russian languages. According to art. 12 p. 3, political and SUMMARY TABLE of selected indicators of cess public officials have the right to occupy administrative positions determined “Electricity Governance Initiative” program by competitive selection. Administrative public positions occupied by public SUMMARY TABLE Indicators on the “Political or political officials are determined by the order President of the Republic of Process” of Management of the Electricity Power Kazakhstan. In accordance with that, under the «Statute of Agency on Regu- Sector in Kazakhstan lation of Natural Monopolies of the Republic of Kazakhstan» art. 3. p. 19., TABLE OF INDICATORS on “Political Process” Agency chairman can only be appointed and dismissed from this position by of the Electricity Power Sector Management in the Government of the Republic of Kazakhstan. Kazakhstan SUMMARY TABLE indicators on “Regulatory Selection process is determined by the Government of the Republic of Ka- Clearly deter- Process” of electricity sector management of Yes zakhstan enacted on the 27th of September, 2007, No. 849 «On Regulations on mined process Kazakhstan Civil Service Officials Competition and Approval» art. 3 «Competition Order». Table of evaluation of “Regulatory Process” indicators of the electricity sector governance in Candidate data No Information on candidates is not published. Kazakhstan transparency SUMMARY TABLE of indicators on the evaluation of ecological and social aspects of the Selection process is carried out in accordance with the Order of President Kazakhstan’s electrical power sector management of the Republic of Kazakhstan on Civil Service Affairs enacted on the 19th of TABLE OF INDICATORS on the evaluation of Criteria for the March, 2013 “On Amendments to Order concerning the First Deputy Chair- Yes ecological and social aspects of Kazakhstan’s acceptability man of Agency on Civil Service Affairs of the Republic of Kazakhstan” and electricity sector management enacted on the 9th of January, 2008 «On Approval of Representative Qualifi- FILLED PROJECT INDICATORS cation Requirements for Administrative Categories». REGULATORY PROCESS INDICATORS In accordance with the law «On Civil Service» art. 18-1 civil and political of- Different ten- ficials’ rotation may be carried out. Terms and conditions of civil and political Yes ures officials’ rotation procedure are determined by President of the Republic of Kazakhstan at the request of the Authorized Body.

167 TABLE OF CONTENT DETAILED EXPLANATION Section 1. HISTORY AND CURRENT STATUS OF ELECTRIC POWER INDUSTRY EVALUATION DECISION ҚАЗАҚША Section 2. DEVELOPMENT OBJECTIVES Section 3. MAIN PRINCIPLES AND STRATEGIES FOR ELECTRIC POWER INDUSTRY Evaluation not applicable / Not evaluated DEVELOPMENT IN THE REPUBLIC OF KAZAKHSTAN Reporting or activity meets none of the quality elements “Low” Section 4. “TRANSPARENT TARIFF” CIVIL РУССКИЙ INITIATIVE: CONTENT AND WAYS OF Reporting or activity meets one quality element “Low to Average” IMPLEMENTATION Reporting or activity meets two quality elements “Average” BASIC QUESTIONNAIRE ON INDICATORS Reporting or activity meets three quality elements “Average to High” ENGLISH

SUMMARY TABLE of selected indicators of “Electricity Governance Initiative” program Reporting or activity meets all the quality elements “High” SUMMARY TABLE Indicators on the “Political Process” of Management of the Electricity Power Name of the researcher and organization: Kurmanbaeva A. A. PA “Committee for Public Control over the Execu- Sector in Kazakhstan tion of State Programs at Local Level” TABLE OF INDICATORS on “Political Process” of the Electricity Power Sector Management in Information source: Official website of ARNM: Regulation on Sivil Service Procedurehttp://www.arem.gov.kz/ Kazakhstan ru/71/ , On approving of Rules for getting on duty and holding a competition for civil employment vacancy SUMMARY TABLE indicators on “Regulatory http://adilet.zan.kz/rus/docs/P070000849_ , Briefing note on strategic Plan of the Agency on Regulation of Process” of electricity sector management of Natural Monopolies of the Republic of Kazakhstan 2011 – 2015, approved by the decision No. 99 of the Gov- Kazakhstan ernment of the Republic of Kazakhstan dated February 8, 2011, Period 2012. Table of evaluation of “Regulatory Process” https://www.google.ru/url?sa=t&rct=j&q=&esrc=s&source=web&cd=5&cad=rja&ved=0CEQQFjAE&url=http indicators of the electricity sector governance in Kazakhstan %3A%2F%2Fwww.arem.gov.kz%2Fupload%2Fdspsa%2FAnalitik_Zap_StrPlan_RUS.doc&ei=oLhcUuT7G4XFt Qa56YH4BA&usg=AFQjCNGDzZ19cYxYq8NlOjI7DlLNkNv3uQ&bvm=bv.53899372,d.Yms SUMMARY TABLE of indicators on the evaluation of ecological and social aspects of the Additional information: The Rules for getting on duty and holding a competition for civil employment vacancy Kazakhstan’s electrical power sector management are approved by the decision of the Government of the Republic of Kazakhstan dated September 27, 2007, TABLE OF INDICATORS on the evaluation of which specifies the procedure for holding a competition. In case of availability of civil employment vacancy ecological and social aspects of Kazakhstan’s in any organization, a relevant organization shall place an advertisement for competition to fill the vacancy electricity sector management in periodically printed publications distributed through all of the territory of the Republic of Kazakhstan, at FILLED PROJECT INDICATORS least 15 calendar days before the submission finalization date. Persons submitting all required documents REGULATORY PROCESS INDICATORS before the specified finalization date become competitors. Persons accepted to be interviewed under by the committee are considered to be candidates for the vacant civil employment post (hereinafter referred to as candidates). The committee is a collegial body. The committee shall consist of at least five members. The committee consists of a chairman, secretary (a representative of personnel department) and committee members. The competition committee can include representatives of other government agencies and other organizations subject to a prior agreement with them.

168 TABLE OF CONTENT The organization shall: Section 1. HISTORY AND CURRENT STATUS OF ELECTRIC POWER INDUSTRY • Make decisions on holding the competition; ҚАЗАҚША Section 2. DEVELOPMENT OBJECTIVES • Specify date and place of the competition; Section 3. MAIN PRINCIPLES AND STRATEGIES FOR ELECTRIC POWER INDUSTRY • Ensure placing an advertisement for the competition using the funds of the organization; DEVELOPMENT IN THE REPUBLIC OF KAZAKHSTAN • Receive, register and keep submitted documents for participation in the competition; Section 4. “TRANSPARENT TARIFF” CIVIL РУССКИЙ INITIATIVE: • Form the committee and assign a chairman for the committee from among the representatives of the CONTENT AND WAYS OF IMPLEMENTATION organization; • Arrange the meeting of the committee. BASIC QUESTIONNAIRE ON INDICATORS

An advertisement forthe competition should include the following information: name of the civil employment ENGLISH vacancy; name of the organization and its location, postal address, phone number, brief summary of its general SUMMARY TABLE of selected indicators of activity; qualifying requirements of the competitors; final date and time of application for the vacancy. The ad- “Electricity Governance Initiative” program vertisement cannot contain additional information inconsistent with the laws of the Republic of Kazakhstan. SUMMARY TABLE Indicators on the “Political A person, who states his/her willingness to participate in the competition, within the application time limits Process” of Management of the Electricity Power specified in the advertisement shall submit their documents to the organization by hand or by post. A com- Sector in Kazakhstan petitor may provide additional information regarding his/her education, professional experience, level of pro- TABLE OF INDICATORS on “Political Process” ficiency (copies of professional development , graduation, scientific publications documents, references, etc.). of the Electricity Power Sector Management in The competition consists of the following stages: qualification assessment of competitors; interview with Kazakhstan the candidates; announcement of the results of the competition. Within five working days after the submis- SUMMARY TABLE indicators on “Regulatory sion finalization date, the committee shall assess a competitor’s compliance with the qualifying requirements. Process” of electricity sector management of Based on the assessment of a competitor’s compliance with the qualifying requirements, the committee, by Kazakhstan virtue of a vote, shall make a decision on approving the list of the candidates meeting the qualifying require- Table of evaluation of “Regulatory Process” ments, and/or on denial of access to the interview. Within three working days, the organization shall inform: indicators of the electricity sector governance in Kazakhstan the competitors, which meet the qualifying requirements, about their approval as candidates, and about the date, place and time of the interview (and the date of the interview shall be specified taking into account the SUMMARY TABLE of indicators on the evaluation time necessary for a candidate to arrive to the place of interview); and inform competitors, who do not meet of ecological and social aspects of the Kazakhstan’s electrical power sector management the qualifying requirements about the reasons of their denial. During the interview carried out by the commission, candidates’ professional knowledge and skills necessary for performing functional duties of the posi- TABLE OF INDICATORS on the evaluation of ecological and social aspects of Kazakhstan’s tion are determined. The commission’s meeting is held under the condition of not less than two thirds of its electricity sector management general structure members being present. The decision of the results of the commission’s meeting is made in the absence of the candidate by open voting within one day. The candidate receives a positive decision in FILLED PROJECT INDICATORS case it was so voted by the majority of members of the commission structure present. In case of equality of REGULATORY PROCESS INDICATORS votes during voting, commission chairman’s voice is decisive. In case of any commission member’s disagreement with the commission’s decision, the commission member has the right for a dissenting opinion that shall be stipulated in writing and attached to the commission’s minutes. Commission ‘s decision is documented by the minutes signed by the commission chairman and its members as well as the secretary who carried out the recording. The organization shall inform those candidates who were interviewed on the results of the competition within three working days starting from the date of its termination, in writing. A copy of Commission’s meeting minutes certified by the organization shall be sent to candidates together with any notice.

169 TABLE OF CONTENT On obtaining the competition voting results the commission brings to the organization head the decision of Section 1. HISTORY AND CURRENT STATUS OF ELECTRIC POWER INDUSTRY the commission with a recommendation about the competition winner’s acceptance for the civil service posi- ҚАЗАҚША Section 2. DEVELOPMENT OBJECTIVES tion. In case there is no candidate to be accepted for civil service position after the competition is held, the competition is considered cancelled. The organization head signs an employment contract with the candidate Section 3. MAIN PRINCIPLES AND STRATEGIES FOR ELECTRIC POWER INDUSTRY who has received a positive decision by the commission and issues an act of acceptance for the service the DEVELOPMENT IN THE REPUBLIC OF KAZAKHSTAN civil servant has to be acquainted with.

Section 4. “TRANSPARENT TARIFF” CIVIL РУССКИЙ INITIATIVE: CONTENT AND WAYS OF IMPLEMENTATION

BASIC QUESTIONNAIRE ON INDICATORS ENGLISH

170 TABLE OF CONTENT RP 8 Section 1. HISTORY AND CURRENT STATUS OF INDEPENDENCE OF REGULATORY BODY ELECTRIC POWER INDUSTRY ҚАЗАҚША Quality Ele- Indica- Section 2. DEVELOPMENT OBJECTIVES Explanation Section 3. MAIN PRINCIPLES AND STRATEGIES ments tor FOR ELECTRIC POWER INDUSTRY DEVELOPMENT IN THE REPUBLIC OF KAZAKHSTAN According to the Law “On Civil Service” art. 18-1. “Rotation” of political civil servants may be carried out for public service. The order and terms and con- Section 4. “TRANSPARENT TARIFF” CIVIL РУССКИЙ INITIATIVE: ditions of political civil servants rotation are determined by President of the CONTENT AND WAYS OF Republic of Kazakhstan via the representation of Authorized Body. Rotation IMPLEMENTATION of territorial department heads was carried out at the request of the chairman of Agency on Regulation of Natural Monopolies of the Republic of Ka- BASIC QUESTIONNAIRE ON INDICATORS

zakhstan in 2013. Head of the Department of Western Kazakhstan region was ENGLISH transferred to a similar position in Karaganda region. Head of Department of SUMMARY TABLE of selected indicators of the Agency on Regulation of Natural Monopolies in Karaganda region was “Electricity Governance Initiative” program transferred as head of Agency on Regulation of Natural Monopolies Depart- SUMMARY TABLE Indicators on the “Political ment in the Akmolinsky region. Head of territorial Department of Agency on Process” of Management of the Electricity Power Regulation of Natural Monopolies of Akmolinsky region, headed Western Ka- Sector in Kazakhstan zakhstan region Department and the former director of Central Administra- Fixed tenure tive Office Control and Work Claims Department was transferred as deputy TABLE OF INDICATORS on “Political Process” Yes of the Electricity Power Sector Management in terms head of Agency on Regulation of Natural Monopolies Department of the Kazakhstan Akmolinsky region. The Institute of Transfer was used in 2012. 12 (11.1%) SUMMARY TABLE indicators on “Regulatory people were transferred to central office from other Government bodies in Process” of electricity sector management of coordination with the Civil Service Agency of the Republic of Kazakhstan. 4 Kazakhstan persons (3.7%) were appointed for civil service from Agency of the Repub- Table of evaluation of “Regulatory Process” lic of Kazakhstan personnel reserve. 13 administrative civil servants (12%) indicators of the electricity sector governance in were appointed for transfer within the regional center, rotated from territo- Kazakhstan rial bodies of the Agency and local executive bodies. 39 administrative civil SUMMARY TABLE of indicators on the evaluation servants (16.1%) were appointed to territorial bodies of the Agency from of ecological and social aspects of the Kazakhstan’s electrical power sector management other Government bodies, 30 civil servants (12.3%) were appointed for rotation, 19 people (7.8%) were appointed for civil service from the Agency of the TABLE OF INDICATORS on the evaluation of Republic of Kazakhstan’s personnel reserve. 5 administrative state positions ecological and social aspects of Kazakhstan’s electricity sector management (4.6%) of the S-5, S-6 categories were replaced in 2012. 14 administrative state positions (5.7%) were transferred to territorial departments. FILLED PROJECT INDICATORS REGULATORY PROCESS INDICATORS Financial auton- Agency on Regulation of Natural Monopolies financing isn’t autonomous and no omy is functioned according to the Budgetary Code of the Republic of Kazakhstan.

171 TABLE OF CONTENT According to the Law of the Republic of Kazakhstan as of 23 of July, 1999, No. Section 1. HISTORY AND CURRENT STATUS OF ELECTRIC POWER INDUSTRY 453, «On Civil Service» art. 14. and «Competition for Administrative State Po- ҚАЗАҚША Section 2. DEVELOPMENT OBJECTIVES sition Occupation» p. 2., terms and conditions and order of holding a competition for occupying an administrative state position, including order of for- Section 3. MAIN PRINCIPLES AND STRATEGIES FOR ELECTRIC POWER INDUSTRY mation of a competition committee, are determined by the Authorized Body; DEVELOPMENT IN THE REPUBLIC OF p. 3., Competition is held by the Government body which has the vacancies, KAZAKHSTAN or by the Authorized Body according to the decision of the President of the Section 4. “TRANSPARENT TARIFF” CIVIL РУССКИЙ Staff selecting Republic of Kazakhstan after the announcement and publication about the INITIATIVE: no CONTENT AND WAYS OF discretion competition in national and Russian languages. According to Art. 12 of p. 3, IMPLEMENTATION political civil servants have the right to occupy an administrative state position based on competitive selection. Order of occupying an administrative BASIC QUESTIONNAIRE ON INDICATORS state position for political civil servants is determined by the President of the ENGLISH Republic of Kazakhstan. According to «The Provision on Agency on Regulation SUMMARY TABLE of selected indicators of of Natural Monopolies of the Republic of Kazakhstan» Art. 3, p. 19, chairman “Electricity Governance Initiative” program of the Agency can only be appointed as well as dismissed from his position SUMMARY TABLE Indicators on the “Political by the Government of the Republic of Kazakhstan. Process” of Management of the Electricity Power Sector in Kazakhstan DETAILED EXPLANATION: According to the Law of the Republic of Kazakhstan «On Natural Monopolies» Art. TABLE OF INDICATORS on “Political Process” 12, «Authorized Body», the position, structure and the total number of regular authorized bodies are deter- of the Electricity Power Sector Management in mined by the Government of the Republic of Kazakhstan. According to the Resolution of the Government of Kazakhstan the Republic of Kazakhstan as of 12 of October, 2007, No. 943 «Provision on Agency on Regulation of Natural SUMMARY TABLE indicators on “Regulatory Monopolies of the Republic of Kazakhstan» Art. 23., joint governing body of the Agency board consists of sev- Process” of electricity sector management of en people. Board of Agency is headed by the Chairman of Agency. Agency Board consists of Agency Chairman, Kazakhstan his deputies, and representatives of the Government of the Republic of Kazakhstan. Agency Board has the right Table of evaluation of “Regulatory Process” to consider and make decisions on any questions covered by the Agency’s competence, except for the cases indicators of the electricity sector governance in of the responsible secretary’s competence. Decisions made during the board meeting shall be documented by Kazakhstan the Agency board resolutions and are the basis for decision-making for the Agency Chairman. SUMMARY TABLE of indicators on the evaluation of ecological and social aspects of the EVALUATION DECISION Kazakhstan’s electrical power sector management TABLE OF INDICATORS on the evaluation of Evaluation not applicable / Not evaluated ecological and social aspects of Kazakhstan’s electricity sector management Reporting or activity meets none of the quality elements “Low” FILLED PROJECT INDICATORS REGULATORY PROCESS INDICATORS Reporting or activity meets one quality element “Low to Average” Reporting or activity meets two quality elements Average

Reporting or activity meets three quality elements Average “High”

Reporting or activity meets all the quality elements “High”

172 TABLE OF CONTENT Researcher and Organization names: Kurmanbayeva А.А. ОО «Committee for Public Control over the Govern- Section 1. HISTORY AND CURRENT STATUS OF ELECTRIC POWER INDUSTRY ment Program Execution at Local Level» ҚАЗАҚША Section 2. DEVELOPMENT OBJECTIVES Information source: The Law of the Republic of Kazakhstan as of 23 of July, 1999 No. 453 “On Civil Service” Section 3. MAIN PRINCIPLES AND STRATEGIES http://www.stat.kz/about/Pages/zakon_gos_slujbe.aspx , Official website of Agency on Regulation of Natu- FOR ELECTRIC POWER INDUSTRY DEVELOPMENT IN THE REPUBLIC OF ral Monopolies, provision for the Agency http://www.arem.gov.kz/ru/101/, news agency news.kz http://www. KAZAKHSTAN bnews.kz/ru/news/post/155990/, Analytical note according to the Strategic Plan of Agency of Regulation of Section 4. “TRANSPARENT TARIFF” CIVIL Natural Monopolies of the Republic of Kazakhstan for 2011 – 2015, approved by the Government Resolution РУССКИЙ INITIATIVE: CONTENT AND WAYS OF of the Republic of Kazakhstan on February 8, 2011 No. 99., 2012 year period. https://www.google.ru/url?sa IMPLEMENTATION =t&rct=j&q=&esrc=s&source=web&cd=5&cad=rja&ved=0CEQQFjAE&url=http%3A%2F%2Fwww.arem.gov. kz%2Fupload%2Fdspsa%2FAnalitik_Zap_StrPlan_RUS.doc&ei=oLhcUuT7G4XFtQa56YH4BA&usg=AFQjCNG BASIC QUESTIONNAIRE ON INDICATORS DzZ19cYxYq8NlOjI7DlLNkNv3uQ&bvm=bv.53899372,d.Yms. ENGLISH

173 TABLE OF CONTENT RP 9 Section 1. HISTORY AND CURRENT STATUS OF APPEAL MECHANISM ELECTRIC POWER INDUSTRY ҚАЗАҚША Quality Ele- Indica- Section 2. DEVELOPMENT OBJECTIVES Explanation Section 3. MAIN PRINCIPLES AND STRATEGIES ments tor FOR ELECTRIC POWER INDUSTRY DEVELOPMENT IN THE REPUBLIC OF KAZAKHSTAN According to the Law of the Republic of Kazakhstan No. 221, dated 12 January, 2007, «On Procedure for Consideration of Natural and Legal Entities Applica- Section 4. “TRANSPARENT TARIFF” CIVIL РУССКИЙ INITIATIVE: tions» Art. 12., «The Appeal of Decisions Made by Considering Application CONTENT AND WAYS OF Results» the complaint on officials’ action (inaction), and also on relavant IMPLEMENTATION Any mentioned decisions is submitted to a higher official or entity in accordance with its party can appeal Yes subordination no later than three months after the moment when the natu- BASIC QUESTIONNAIRE ON INDICATORS against the de-

ral or legal entity becomes aware about the action or decision-making of an ENGLISH cision appropriate entity or official. A delayed period for appeal isn’t a basis for en- SUMMARY TABLE of selected indicators of tities’ or officials’ to refuse considering the application. The reasons of miss- “Electricity Governance Initiative” program ing the time of appeal shall be clarified during the application consideration SUMMARY TABLE Indicators on the “Political and can become one of the bases for refusal in satisfying the complaint. Process” of Management of the Electricity Power Sector in Kazakhstan According to the Law of the Republic of Kazakhstan No. 221, dated 12 Janu- ary, 2007, «On Procedure for Consideration of Natural and Legal Entities Ap- TABLE OF INDICATORS on “Political Process” It is possible to of the Electricity Power Sector Management in plications» Art. 12. « The Appeal of Decisions Made by Considering Applica- apply for appeal Kazakhstan Yes tion Results» in the absence of a higher official or entity or the disagreement on procedural SUMMARY TABLE indicators on “Regulatory of the applicant with the decision made, shall be submitted directly to the bases Process” of electricity sector management of court. At the same time it should be noted that the judicial system needs to Kazakhstan be improved. Table of evaluation of “Regulatory Process” indicators of the electricity sector governance in According to the Law of the Republic of Kazakhstan dated 12 January, 2007, Kazakhstan “On Procedure for Consideration the Applications of Natural and Legal Enti- SUMMARY TABLE of indicators on the evaluation ties’ “ Art. 14 p. 5, natural and legal entities have the right to demand indem- of ecological and social aspects of the nification if they are faced with order violations established during the ap- Kazakhstan’s electrical power sector management It is possible to plication consideration. According to the Law of the Republic of Kazakhstan TABLE OF INDICATORS on the evaluation of apply for appeal th Yes of 9 of July, 1998 «On Natural Monopolies and Controlled Markets» Art.19, ecological and social aspects of Kazakhstan’s on legal mate- electricity sector management in case of violation of the present Law, subjects of natural monopolies and rial grounds controlled markets, Government bodies, their heads are obliged to: FILLED PROJECT INDICATORS • to adopt measures for compensation of the damage caused and (or) REGULATORY PROCESS INDICATORS losses directly, or by means of temporary decrease in tariffs (prices, collecting rates);

174 TABLE OF CONTENT • to cancel or change the act not corresponding with the present Law. Section 1. HISTORY AND CURRENT STATUS OF ELECTRIC POWER INDUSTRY According to Art. 21 «Compensation by a subject of natural monopoly, ҚАЗАҚША Section 2. DEVELOPMENT OBJECTIVES the losses caused in a controlled market by violation of the present Law», action (inaction) of the subject of natural monopoly in a controlled Section 3. MAIN PRINCIPLES AND STRATEGIES FOR ELECTRIC POWER INDUSTRY market, contradicting the present Law and causing losses to another DEVELOPMENT IN THE REPUBLIC OF natural or legal entity, including by overestimating tariffs (prices, KAZAKHSTAN collecting rates) or limiting the same, unreasonable refusal to conclude Section 4. “TRANSPARENT TARIFF” CIVIL РУССКИЙ INITIATIVE: contracts for providing adjustable services (goods, works) and in their CONTENT AND WAYS OF execution, involve compensation by the subject of natural monopoly IMPLEMENTATION in a controlled market, of losses according to the civil legislation of the Republic of Kazakhstan; According to the Art. 22 «Compensation BASIC QUESTIONNAIRE ON INDICATORS of losses caused to the subject of natural monopoly in a controlled ENGLISH market by illegal decisions, actions (inaction) of authorized body and SUMMARY TABLE of selected indicators of also its officials» in case of illegal decisions, and also actions (inaction) “Electricity Governance Initiative” program of authorized body and its officials causing losses to the subject of SUMMARY TABLE Indicators on the “Political natural monopoly in a controlled market, he has the right to demand Process” of Management of the Electricity Power compensation of these losses by an order established by the Civil Sector in Kazakhstan Legislation of the Republic of Kazakhstan. TABLE OF INDICATORS on “Political Process” of the Electricity Power Sector Management in Example. On 3 April, 2013 District Court of Almaty’s Auezovsky region made Kazakhstan The appeal a decision on public application against Nord Vest, by consumer rights pro- SUMMARY TABLE indicators on “Regulatory mechanism in- tection association of the city branch of Agency on Regulation of Natural Process” of electricity sector management of fluences deci- Yes Monopolies of the Republic of Kazakhstan. Nord Vest challenged the order Kazakhstan sions in at least of department of the Agency on Regulation of Natural Monopolies of the Re- Table of evaluation of “Regulatory Process” one case. public of Kazakhstan, which represented by the ALTS enterprise allowed tariff indicators of the electricity sector governance in rates to rise as of the 1 of September, 2012. Kazakhstan SUMMARY TABLE of indicators on the evaluation DETAILED EXPLANATION of ecological and social aspects of the Kazakhstan’s electrical power sector management EVALUATION DECISION TABLE OF INDICATORS on the evaluation of ecological and social aspects of Kazakhstan’s Evaluation not applicable / Not evaluated electricity sector management Reporting or activity meets none of the quality elements “Low” FILLED PROJECT INDICATORS REGULATORY PROCESS INDICATORS Reporting or activity meets one quality element “Low to Average”

Reporting or activity meets two quality elements “Average”

Reporting or activity meets three quality elements “Average to High”

Reporting or activity meets all the quality elements “High”

175 TABLE OF CONTENT The Researcher and Organization names: Kurmanbayeva А.А. ОО «Committee for Public Control over the Gov- Section 1. HISTORY AND CURRENT STATUS OF ELECTRIC POWER INDUSTRY ernment Program Execution at Local Level» ҚАЗАҚША Section 2. DEVELOPMENT OBJECTIVES Information source: Law of the Republic of Kazakhstan No. 272-I dated 9 July, 1998 “On Natural Monopolies and Section 3. MAIN PRINCIPLES AND STRATEGIES Controlled Markets “http://online.zakon.kz/Document/?doc_id=1009803, Law of the Republic of Kazakhstan FOR ELECTRIC POWER INDUSTRY DEVELOPMENT IN THE REPUBLIC OF No. 221 dated 12 January, 2007 “Order of Consideration of Natural and Legal Entities Application” http://adilet. KAZAKHSTAN zan.kz/rus/docs/Z070000221_, Internet resource – Dialogue http://www.dialog.kz/?lan=ru&id=92&pub=3350.

Section 4. “TRANSPARENT TARIFF” CIVIL РУССКИЙ INITIATIVE: CONTENT AND WAYS OF IMPLEMENTATION

BASIC QUESTIONNAIRE ON INDICATORS ENGLISH

176 TABLE OF CONTENT RP 11 REGULATORY BODY STAFF TRAINING Section 1. HISTORY AND CURRENT STATUS OF ELECTRIC POWER INDUSTRY Quality Elements Indicator Explanation ҚАЗАҚША Section 2. DEVELOPMENT OBJECTIVES Section 3. MAIN PRINCIPLES AND STRATEGIES According to the Law «On Civil Service» civil servants have a right for re- FOR ELECTRIC POWER INDUSTRY DEVELOPMENT IN THE REPUBLIC OF training (requalification) and professional development at the expense of the KAZAKHSTAN relevant budget. On the 13 of November, 2000, the Government Resolution Section 4. “TRANSPARENT TARIFF” CIVIL Definition Yes «On the Approval of the Concept of Civil Servants Training» was accepted. РУССКИЙ INITIATIVE: CONTENT AND WAYS OF The President of the Republic of Kazakhstan’s Order dated October 11, 2004 IMPLEMENTATION approved Rules of retraining and professional development of civil servants of the Republic of Kazakhstan including professional development abroad. BASIC QUESTIONNAIRE ON INDICATORS

9 administrative civil servants of the Agency’s central office were trained in ENGLISH the Academy of Public Administration according to the President of the Re- SUMMARY TABLE of selected indicators of public of Kazakhstan during reporting period, they included: 7 employees “Electricity Governance Initiative” program who passed advanced training courses and 2 who were appointed for senior SUMMARY TABLE Indicators on the “Political positions. 27 employees of central office were trained in Kazakh Humani- Process” of Management of the Electricity Power tarian and Legal University of the Republic of Kazakhstan plus 14 people – Sector in Kazakhstan from the Agency’s territorial branches; one employee was trained in the A.N. TABLE OF INDICATORS on “Political Process” Nazarbayev University. Examples: RESET team held a seminar on advanced of the Electricity Power Sector Management in Kazakhstan international practices in the power sector regulation, using the example of Southeastern European countries, for the Agency on Regulation of Natural SUMMARY TABLE indicators on “Regulatory Monopolies on 21 of April, 2011; on 30.10.2012 a training seminar for civil Process” of electricity sector management of Kazakhstan Training in sev- servants took place in the Agency on Regulation of Natural Monopolies of the eral subject-mat- Yes Republic of Kazakhstan, its subject was: « Opposing Corruption «; On 30 of Table of evaluation of “Regulatory Process” indicators of the electricity sector governance in ters March, 2012 a UNDP /GEF seminar on «Development of power service com- Kazakhstan panies for energy efficiency advance in Kazakhstan» took place in Astana; On 26 of September, 2013 representatives of Agency on Regulation of Natural SUMMARY TABLE of indicators on the evaluation of ecological and social aspects of the Monopolies participated in the national seminar put on by the Kazakhstan Kazakhstan’s electrical power sector management Electrical Power Association, on Power Supply Problems of Kazakh organiza- TABLE OF INDICATORS on the evaluation of tions in Shymkent; On 18 of March, 2013 a seminar organized by JSC “Center ecological and social aspects of Kazakhstan’s for Development and Protection of Competition Policy“« on “Topical issues electricity sector management of state regulation of natural monopolies and controlled markets subjects FILLED PROJECT INDICATORS activity: problems and ways of their decision» took place in Astana; in April, 2013 an international technological seminar was organized by the Union of REGULATORY PROCESS INDICATORS power engineers of the Republic of Kazakhstan on the subject: «Service of the chief power engineer of the modern enterprise»;

Examples: RESET, UNDP/GEF, Kazakhstan Electrical power Association, JSC “Center on the Competition Policy Development and Protection” and Union Variety Yes of power engineers of the Republic of Kazakhstan were organizers of abovementioned seminars. Financing sources: International funds, own budget.

177 TABLE OF CONTENT DETAILED EXPLANATION: Civil servants training system shall include training directly in the workplace, in var- Section 1. HISTORY AND CURRENT STATUS OF ELECTRIC POWER INDUSTRY ious forms of professional development, branch courses, regional institutes, and by preparation in civil service ҚАЗАҚША Section 2. DEVELOPMENT OBJECTIVES Academy, Diplomatic academy and, other training centers including special programs, training systems at a number of international organizations, training by other countries Government bodies. «Civil Service Agency» Section 3. MAIN PRINCIPLES AND STRATEGIES FOR ELECTRIC POWER INDUSTRY and its territorial branches together with regional Mayors created a regional network of civil servants train- DEVELOPMENT IN THE REPUBLIC OF KAZAKHSTAN ing centers. The main difficulties are training program financing, from national and local budgets; especially for training employees abroad. Civil service academy of the President of the Republic of Kazakhstan carries Section 4. “TRANSPARENT TARIFF” CIVIL РУССКИЙ INITIATIVE: out an educational and methodical role along with scientific centers and center of information and analysis, CONTENT AND WAYS OF coordinating the activity of educational institutions, that provide civil servants with training. With the assis- IMPLEMENTATION tance of the European Commission the Eurasian Training Center was created. Organizational and administrative structures of the center were established, educational modules were developed, competitive selection of BASIC QUESTIONNAIRE ON INDICATORS

teachers for participating in the «training» program was carried out and advanced training courses for civil ENGLISH servants were organized. Annually one third of the civil servants on an average are re-trained in professional SUMMARY TABLE of selected indicators of development courses, thanks to the results civil servant training has provided over a three-year period. “Electricity Governance Initiative” program SUMMARY TABLE Indicators on the “Political EVALUATION DECISION Process” of Management of the Electricity Power Sector in Kazakhstan Evaluation not applicable / Not evaluated TABLE OF INDICATORS on “Political Process” of the Electricity Power Sector Management in Reporting or activity meets none of the quality elements “Low” Kazakhstan SUMMARY TABLE indicators on “Regulatory Reporting or activity meets one quality element “Low to Average” Process” of electricity sector management of Kazakhstan Reporting or activity meets two quality elements “Average” Table of evaluation of “Regulatory Process” indicators of the electricity sector governance in Reporting or activity meets three quality elements “Average to High” Kazakhstan SUMMARY TABLE of indicators on the evaluation Reporting or activity meets all the quality elements “High” of ecological and social aspects of the Kazakhstan’s electrical power sector management Researcher and Organization names: Kurmanbayeva А.А. ОО «Committee for Public Control over the Govern- TABLE OF INDICATORS on the evaluation of ecological and social aspects of Kazakhstan’s ment Program Execution at Local Level». electricity sector management Information source: Order 0f the President of the Republic of Kazakhstan dated 21 July, 2011 № 119 “Concept FILLED PROJECT INDICATORS of the New Model of Civil Service in the Republic of Kazakhstan”, http://www.nomad.su/?a=3-201108010034, REGULATORY PROCESS INDICATORS «Analytical Note on the Strategic Plan of Agency of Natural Monopoly Regulation of the Republic of Ka- zakhstan for 2011 – 2015», approved by the Government Resolution of the Republic of Kazakhstan on the 8 of February, 2011 No. 99. https://www.google.ru/url?sa=t&rct=j&q=&esrc=s&source=web&cd=5&cad=rja&v ed=0CEQQFjAE&url=http%3A%2F%2Fwww.arem.gov.kz%2Fupload%2Fdspsa%2FAnalitik_Zap_StrPlan_RUS. doc&ei=oLhcUuT7G4XFtQa56YH4BA&usg=AFQjCNGDzZ19cYxYq8NlOjI7DlLNkNv3uQ&bvm=bv.53899372 ,d.Yms, archive-kz.com http://archive-kz.com/page/1641475/2013-03-16/ http://www.businessgazeta.kz/articles.php?id=1015.

178 TABLE OF CONTENT RP 12 REGULATORY BODY’S CAPACITY IN ESTIMATING ENVIRONMENTAL ISSUES Section 1. HISTORY AND CURRENT STATUS OF ELECTRIC POWER INDUSTRY Quality Elements Indicator Explanation ҚАЗАҚША Section 2. DEVELOPMENT OBJECTIVES Section 3. MAIN PRINCIPLES AND STRATEGIES Resources for environmental issue solution aren’t provided by the MINT of FOR ELECTRIC POWER INDUSTRY Financial re- the Republic of Kazakhstan, because environmental protection is under the DEVELOPMENT IN THE REPUBLIC OF sources allocat- No KAZAKHSTAN MOSIVR of the Republic of Kazakhstan’s competence according to the current

ed РУССКИЙ Section 4. “TRANSPARENT TARIFF” CIVIL legislation. INITIATIVE: CONTENT AND WAYS OF Environmental examination is separated from the regulatory body in the IMPLEMENTATION Access to exami- No power industry area and concentrated in the Authorized Body on environ- nation BASIC QUESTIONNAIRE ON INDICATORS mental protection ENGLISH Responsible per- There is no competent authorized officer for environmental issues in the No SUMMARY TABLE of selected indicators of son regulatory body “Electricity Governance Initiative” program Developing SUMMARY TABLE Indicators on the “Political There were no special courses/training carried out on expansion of knowl- knowledge in Process” of Management of the Electricity Power No edge in the field of environmental protection for the staff of regulatory body Sector in Kazakhstan the environmen- in the power industry area for the last 2 years TABLE OF INDICATORS on “Political Process” tal area of the Electricity Power Sector Management in Kazakhstan DETAILED EXPLANATION: Even as some courses were realized, they had formal and not systematic character. SUMMARY TABLE indicators on “Regulatory Experts didn’t find a complete system of professional development and training of employees in the field of Process” of electricity sector management of environmental protection of the power industry area. Kazakhstan Table of evaluation of “Regulatory Process” EVALUATION DECISION indicators of the electricity sector governance in Kazakhstan Evaluation not applicable / Not evaluated SUMMARY TABLE of indicators on the evaluation of ecological and social aspects of the Regulatory body doesn’t show any qualitative components in order environment “Low” Kazakhstan’s electrical power sector management issue to be estimated TABLE OF INDICATORS on the evaluation of ecological and social aspects of Kazakhstan’s Regulatory body shows, at least, one qualitative component in order environment “Average” electricity sector management issue to be estimated FILLED PROJECT INDICATORS Regulatory body shows two or several qualitative components in order environment REGULATORY PROCESS INDICATORS “High” issue to be estimated

Researcher and Organization names: Vadim Litvinov, expert of PF “Environment-Youth-Initiative-Development”, member of NGO “Transparent Tariff” National Association. Information source: Answers from the authorized bodies.

179 TABLE OF CONTENT RP 13 Section 1. HISTORY AND CURRENT STATUS OF REGULATORY BODY’S CAPACITY IN ESTIMATING ENVIRONMENTAL ISSUES ELECTRIC POWER INDUSTRY ҚАЗАҚША Quality Ele- Indica- Section 2. DEVELOPMENT OBJECTIVES Explanation Section 3. MAIN PRINCIPLES AND STRATEGIES ments tor FOR ELECTRIC POWER INDUSTRY DEVELOPMENT IN THE REPUBLIC OF KAZAKHSTAN Financial resources allo- No No financial resources for the issue were determined. Section 4. “TRANSPARENT TARIFF” CIVIL РУССКИЙ INITIATIVE: cated CONTENT AND WAYS OF IMPLEMENTATION The Agency interacts with the Ministry of Labour and Social Protection on establishing reduced rates. So, as a result of this work since April 1, 2012 BASIC QUESTIONNAIRE ON INDICATORS various amounts of consumption were registered for the following citizen Access to pro- ENGLISH categories in all regions of Kazakhstan: pensioners living alone , disabled fessional knowl- Yes people, participants of the Second World War and persons related to them, SUMMARY TABLE of selected indicators of edge “Electricity Governance Initiative” program inhabitants of houses without centralized hot water supply and inhabitants SUMMARY TABLE Indicators on the “Political of areas where gas is not installed who are considered as persons using Process” of Management of the Electricity Power electric stoves. Sector in Kazakhstan Responsible TABLE OF INDICATORS on “Political Process” No Responsible person is not indicated. of the Electricity Power Sector Management in person Kazakhstan SUMMARY TABLE indicators on “Regulatory «Civil Service Agency» and its territorial branches together with the regional Process” of electricity sector management of Mayors created a regional network of centers for civil servant training. Kazakhstan Eurasian training center was created with the assistance of the European Table of evaluation of “Regulatory Process” Commission. Organizational and administrative structures of the center were indicators of the electricity sector governance in Kazakhstan established, courses increasing the qualification of civil servants were orga- Developing nized. SUMMARY TABLE of indicators on the evaluation knowledge in Yes of ecological and social aspects of the social area By the Order No. 1457 of the President of the Republic of Kazakhstan dated Kazakhstan’s electrical power sector management 11 October, 2004, Rules of retraining and professional development of the TABLE OF INDICATORS on the evaluation of Republic of Kazakhstan civil servants were approved providing professional ecological and social aspects of Kazakhstan’s development abroad. electricity sector management Knowledge level increase of workers in the social sphere was also taken into FILLED PROJECT INDICATORS account. REGULATORY PROCESS INDICATORS

180 TABLE OF CONTENT DETAILED EXPLANATION: Electric power tariffs comparing with other tariffs are growing at a high rate in Ka- Section 1. HISTORY AND CURRENT STATUS OF ELECTRIC POWER INDUSTRY zakhstan. Average increase in electricity prices exceeds price increase of other utilities by almost two times. ҚАЗАҚША Section 2. DEVELOPMENT OBJECTIVES Municipal tariff payment in Kazakhstan isn’t included in the minimum consumer basket. In matter of fact in 2012 average payment for utilities during winter period was about 47% of the minimum wage (17,439 Tenge) Section 3. MAIN PRINCIPLES AND STRATEGIES FOR ELECTRIC POWER INDUSTRY and minimum pension (17,491 Tenge) levels and 34% of the income of disabled people of the first group DEVELOPMENT IN THE REPUBLIC OF KAZAKHSTAN (23,717 Tenge). As it is seen from the data specified utilities payment is often an excessive burden for many social cases and unprotected citizens. Tariff increase naturally leads in turn to price rises, which is defined by Section 4. “TRANSPARENT TARIFF” CIVIL РУССКИЙ INITIATIVE: inflation in advance. CONTENT AND WAYS OF IMPLEMENTATION EVALUATION DECISION

BASIC QUESTIONNAIRE ON INDICATORS Evaluation not applicable / Not evaluated ENGLISH

SUMMARY TABLE of selected indicators of Reporting or activity meets none of the quality elements “Low” “Electricity Governance Initiative” program Reporting or activity meets one quality element “Low to Average” SUMMARY TABLE Indicators on the “Political Process” of Management of the Electricity Power Sector in Kazakhstan Reporting or activity meets two quality elements “Average” TABLE OF INDICATORS on “Political Process” of the Electricity Power Sector Management in Reporting or activity meets three quality elements “Average to High” Kazakhstan Reporting or activity meets all the quality elements “High” SUMMARY TABLE indicators on “Regulatory Process” of electricity sector management of Kazakhstan Researcher and Organization names: Kurmanbayeva А.А. ОО «Committee for Public Control over the Govern- Table of evaluation of “Regulatory Process” ment Program Execution at Local Level»Information source: The Order № 119 of the President of the Republic indicators of the electricity sector governance in Kazakhstan of Kazakhstan dated 21 July, 2011 Concept of New Model of the Civil Service of the Republic of Kazakhstan http://www.nomad.su/?a=3-201108010034, archive-kz.com http://archive-kz.com/page/1641475/2013-03- SUMMARY TABLE of indicators on the evaluation of ecological and social aspects of the 16/ http://www.businessgazeta.kz/articles.php?id=1015. Kazakhstan’s electrical power sector management TABLE OF INDICATORS on the evaluation of ecological and social aspects of Kazakhstan’s electricity sector management FILLED PROJECT INDICATORS REGULATORY PROCESS INDICATORS

181 TABLE OF CONTENT RP 14 Section 1. HISTORY AND CURRENT STATUS OF PUBLIC INFORMATION ON THE USE OF CONSULTANTS ELECTRIC POWER INDUSTRY ҚАЗАҚША Quality Ele- Indica- Section 2. DEVELOPMENT OBJECTIVES Explanation Section 3. MAIN PRINCIPLES AND STRATEGIES ments tor FOR ELECTRIC POWER INDUSTRY DEVELOPMENT IN THE REPUBLIC OF KAZAKHSTAN Government Resolution of the Republic of Kazakhstan dated 15 May, 2012, “Rules on carrying out electronic Government procurement” were approved Section 4. “TRANSPARENT TARIFF” CIVIL РУССКИЙ INITIATIVE: and according to these rules attracting consulting services is carried out CONTENT AND WAYS OF through the system of Government procurement. According Art. 27 p. 2 « of IMPLEMENTATION General avail- the Law, Government procurement organizer is obliged to place the proto- ability of col of the text on the consumer Internet resource, no later than two work- BASIC QUESTIONNAIRE ON INDICATORS detailed in-

Yes ing days from the date of signing the protocol on the results of Government ENGLISH formation on at- procurements via competition.”. The data contained in the protocol on results tracting consult- of Government procurement via competition placed on the consumer Inter- SUMMARY TABLE of selected indicators of ing services “Electricity Governance Initiative” program net resource, shall be available to all the people interested, free of charge». SUMMARY TABLE Indicators on the “Political Protocol on the results of Government procurement for 2012-2013 are avail- Process” of Management of the Electricity Power able on the official site of the Ministry of Industry and New Technologies of Sector in Kazakhstan the Republic of Kazakhstan. TABLE OF INDICATORS on “Political Process” of the Electricity Power Sector Management in According to p. 4 of the Law of the Republic of Kazakhstan «On Private Busi- Kazakhstan ness» dated 31 January, 2006, expert reports have to be annexed to the draft SUMMARY TABLE indicators on “Regulatory of the legal regulatory act before its acceptance, including each subsequent Process” of electricity sector management of Publicity of re- amendment of this project by interested Government bodies , and according Kazakhstan ports and rec- to Art. 5 p. 8 copies of the draft regulations infringing on the interests of pri- Yes Table of evaluation of “Regulatory Process” ommendations vate business, are have to be published (distributed) in mass media, includ- indicators of the electricity sector governance in by consultants ing Internet resources, before their consideration by appropriate authority or Kazakhstan during advisory council meetings. Expert reports of the National Economic SUMMARY TABLE of indicators on the evaluation Chamber of Kazakhstan “Atameken” Union” are available on the association’s of ecological and social aspects of the site of Journal of Expert Reports. http://atamekenunion.kz/expert/out? p=0. Kazakhstan’s electrical power sector management TABLE OF INDICATORS on the evaluation of DETAILED EXPLANATION: According to the Art. 5 of the Law of the Republic of Kazakhstan «On Private Busi- ecological and social aspects of Kazakhstan’s electricity sector management ness» dated 31 January, 2006, starting on July 1, 2006, business community is granted the right to participate in the development of the regulations infringing on business interests. According to the article specified, central FILLED PROJECT INDICATORS Government, local representatives and executive bodies through their advisory councils are obliged to send REGULATORY PROCESS INDICATORS the NPA projects infringing on interests of private business to accredited associations of private business and National Chamber of Businessman of the Republic of Kazakhstan, with the obligatory appendix of explanatory note on obtaining the expert report, including each subsequent amendment of the project.

182 TABLE OF CONTENT Section 1. HISTORY AND CURRENT STATUS OF EVALUATION DECISION ELECTRIC POWER INDUSTRY ҚАЗАҚША Section 2. DEVELOPMENT OBJECTIVES Evaluation not applicable / Not evaluated Section 3. MAIN PRINCIPLES AND STRATEGIES FOR ELECTRIC POWER INDUSTRY DEVELOPMENT IN THE REPUBLIC OF Reporting or activity meets none of the quality elements “Low” KAZAKHSTAN

Section 4. “TRANSPARENT TARIFF” CIVIL Reporting or activity meets one quality element “Low to Average” РУССКИЙ INITIATIVE: CONTENT AND WAYS OF IMPLEMENTATION Reporting or activity meets two quality elements “Average”

BASIC QUESTIONNAIRE ON INDICATORS Reporting or activity meets three quality elements “Average to High” ENGLISH Reporting or activity meets all the quality elements “High” SUMMARY TABLE of selected indicators of “Electricity Governance Initiative” program Researcher and Organization names: Kurmanbayeva А.А. ОО «Committee for Public Control over the Govern- SUMMARY TABLE Indicators on the “Political ment Program Execution at Local Level» Process” of Management of the Electricity Power Sector in Kazakhstan Information source: official website of the Ministry of Industry and New Technologies of the Republic of Ka- TABLE OF INDICATORS on “Political Process” zakhstan, Government procurements http://www.mint.gov.kz/?page=procurement , Information and legal sys- of the Electricity Power Sector Management in tem of draft regulations of the Republic of Kazakhstan, Governmental Resolution of the Republic of Kazakh- Kazakhstan stan from the 15 of May, 2012 No. 623 Rules on carrying out electronic Government procurements. SUMMARY TABLE indicators on “Regulatory Process” of electricity sector management of Kazakhstan Table of evaluation of “Regulatory Process” indicators of the electricity sector governance in Kazakhstan SUMMARY TABLE of indicators on the evaluation of ecological and social aspects of the Kazakhstan’s electrical power sector management TABLE OF INDICATORS on the evaluation of ecological and social aspects of Kazakhstan’s electricity sector management FILLED PROJECT INDICATORS REGULATORY PROCESS INDICATORS

183 TABLE OF CONTENT RP 15 Section 1. HISTORY AND CURRENT STATUS OF CLARITY IN REGULATORY PROCEDURES AND ESSENTIAL BASICS FOR DECISION ELECTRIC POWER INDUSTRY MAKING ҚАЗАҚША Section 2. DEVELOPMENT OBJECTIVES Quality Ele- Indica- Section 3. MAIN PRINCIPLES AND STRATEGIES Explanation FOR ELECTRIC POWER INDUSTRY ments tor DEVELOPMENT IN THE REPUBLIC OF KAZAKHSTAN

Section 4. “TRANSPARENT TARIFF” CIVIL On December 4, 2013, the last stage of discussions on changing the tariffs РУССКИЙ INITIATIVE: for a number of utilities was completed. Asylbek Duysebayev, vice-chairman CONTENT AND WAYS OF IMPLEMENTATION of the Agency on Regulation of Natural Monopolies of the Republic of Ka- zakhstan reported that there won’t be a tariff increase for the electric power BASIC QUESTIONNAIRE ON INDICATORS and heat supply in the territory of the Republic as a whole until the new year.

It was widely declared in mass media and all the interested parties partici- ENGLISH pated in the discussion, thus we can speak about existence of clarity in regu- SUMMARY TABLE of selected indicators of latory procedures. A “Comprehensive plan for increasing energy efficiency of “Electricity Governance Initiative” program the Republic of Kazakhstan for 2011-2015» was developed by the Govern- SUMMARY TABLE Indicators on the “Political ment of the Republic of Kazakhstan in order to comply with the orders of the Process” of Management of the Electricity Power President of the Republic of Kazakhstan to ensure effective state control on Sector in Kazakhstan energy saving policy as per the Law of the Republic of Kazakhstan dated 13 TABLE OF INDICATORS on “Political Process” January, 2012 «On Amendments to Certain Acts Concerning Energy Saving of the Electricity Power Sector Management in and Energy Efficiency Increase». According to subparagraphs No. 2 and 3 of Kazakhstan p. 2 of Art. 21 of the Law of the Republic of Kazakhstan about energy saving SUMMARY TABLE indicators on “Regulatory and energy efficiency increase, individual entrepreneurs and legal entities Process” of electricity sector management of are obliged to stay within power consumption standards, and to observe the Kazakhstan Procedural con- Yes power factor standard values in electric networks. Article 219-2 stipulates fidence Table of evaluation of “Regulatory Process” punishment for operating defective equipment, fittings and pipelines with- indicators of the electricity sector governance in Kazakhstan out thermal insulation or violating the operating mode of energy-requiring equipment. At the request of the Head of the State, Ministry of Industry and SUMMARY TABLE of indicators on the evaluation New Technologies of the Republic of Kazakhstan is developing “Energy Sav- of ecological and social aspects of the Kazakhstan’s electrical power sector management ing 2020” program. Acceptance of a number of regulatory acts in the power supply area created the need for all the legal entities and even for indi- TABLE OF INDICATORS on the evaluation of ecological and social aspects of Kazakhstan’s vidual entrepreneurs to rebuild equipment, pipelines, fittings, etc. as per the electricity sector management new standards of electric power consumption per one production unit and coefficients of powerful standard values in electric networks. The unsched- FILLED PROJECT INDICATORS uled inspections, which have been carried out by the Committee of state REGULATORY PROCESS INDICATORS supervision and control of the MINT of the Republic of Kazakhstan, revealed violations concerning standard power factor values not being observed by Governmental Resolution in Aktyubinsk, Southern Kazakhstan, Zhambylsky and Atyrausky regions. Thus mainly large industrial and processing plants and enterprises were inspected. That means that there will be many more violations revealed among small companies and firms. Thus, decisions made lately in the energy saving area are disputable.

184 TABLE OF CONTENT All Regulatory Acts were adopted according to the Laws of the Republic of Section 1. HISTORY AND CURRENT STATUS OF ELECTRIC POWER INDUSTRY Kazakhstan and within the Government of the Republic of Kazakhstan’s com- ҚАЗАҚША Section 2. DEVELOPMENT OBJECTIVES petence. However existence of conflicts between the interested parties is a reflection of the degree of insufficient procedural confidence. In September Section 3. MAIN PRINCIPLES AND STRATEGIES FOR ELECTRIC POWER INDUSTRY information of following character was disseminated: «At the beginning of DEVELOPMENT IN THE REPUBLIC OF KAZAKHSTAN September 2013 M. Ospanov, head of the Agency on Regulation of Natu- ral Monopolies of the Republic of Kazakhstan noted that «development of Section 4. “TRANSPARENT TARIFF” CIVIL РУССКИЙ INITIATIVE: regulations for state monopoly sector that provides protection of consumer CONTENT AND WAYS OF rights is one of the priority activities of the Agency”. “Transparency of tariff IMPLEMENTATION setting is also important” this task was defined at a round table, which took place in the Northern Kazakhstan NDP «Nur Otan»s regional branch for the BASIC QUESTIONNAIRE ON INDICATORS

Agency on Regulation of Natural Monopolies, by N.A. Nazarbayev, President ENGLISH of Kazakhstan. Analysis of 80 Regulatory Acts was carried out to improve the SUMMARY TABLE of selected indicators of legislation, 17 among which were optimized in three. As a result more than “Electricity Governance Initiative” program 200 amendments were made providing increase in tariff setting transpar- SUMMARY TABLE Indicators on the “Political ency and adjustable service quality to fight corruption and strengthen con- Process” of Management of the Electricity Power trol. Work on regulating amendments is carried out, as well as developing Sector in Kazakhstan relevant draft laws, which according to a Government order will be included TABLE OF INDICATORS on “Political Process” in the legislative work plan of next year. A long-term tariff policy program to of the Electricity Power Sector Management in 2030 in the natural monopoly sphere will be developed involving interna- Kazakhstan tional experts; purpose of its realization is transparency of tariff information SUMMARY TABLE indicators on “Regulatory ensuring targeted use of the means received from tariff growth. Amendments Process” of electricity sector management of providing tariff load decrease were also developed. It is suggested to ex- Kazakhstan clude representational expenses, expenses for auditors (except in joint stock Table of evaluation of “Regulatory Process” company) and marketing services, bank commissions, financial and technical indicators of the electricity sector governance in expertise costs from tariffs. List of documents which the monopolist has to Kazakhstan attach to their demand and also other requirements is reduced by 50%. This SUMMARY TABLE of indicators on the evaluation allows consumer savings without damage to tariff regulation and quality. of ecological and social aspects of the Kazakhstan’s electrical power sector management This is creating a legislative basis for introducing a system for monitoring and quality control of monopolist services: temperature, pressure and ten- TABLE OF INDICATORS on the evaluation of sion level. «It is essentially a new function where Government and public ecological and social aspects of Kazakhstan’s electricity sector management associations can be involved in the realization of consumer rights protection «– A. Duysebayev, vice-president of the Agency on Regulation of Natural FILLED PROJECT INDICATORS Monopolies noted during the event. Innovations are also provided in fight- REGULATORY PROCESS INDICATORS ing against other problems – inadequate number of installation of in-house heat metering devices. Periodical metering will be carried out involving non- governmental organizations. As Asylbek Duysebayev noted, changes will also concern those articles of the law, which allow monopolists to treat one or another situation in duplicate today.

185 TABLE OF CONTENT These are those numerous cases when consumers seem to be right and the Section 1. HISTORY AND CURRENT STATUS OF ELECTRIC POWER INDUSTRY Law is also on their side, but monopolists nevertheless appear to win in ҚАЗАҚША Section 2. DEVELOPMENT OBJECTIVES court; therefore today it is suggested to exclude from legislation not only such norms, but also restrictions on providing terms for repeated demands. Section 3. MAIN PRINCIPLES AND STRATEGIES FOR ELECTRIC POWER INDUSTRY In order to counteract corruption the possibility of providing demands in DEVELOPMENT IN THE REPUBLIC OF electronic format, development of an exhaustive list of bases for refusing de- KAZAKHSTAN mands of monopolist, minimization of monopolist contacts with the Agency Section 4. “TRANSPARENT TARIFF” CIVIL РУССКИЙ INITIATIVE: representatives, carrying out examination of tariff with the participation of CONTENT AND WAYS OF advisory council members at all the levels of tariff statements offered. Offers IMPLEMENTATION on strengthening Agency control functions are also developed. «Monopolists are in a field today, where infrastructure business is conducted and devel- BASIC QUESTIONNAIRE ON INDICATORS oped and minor changes in tariffs and conditions cause other businessmen’s ENGLISH reaction. Thus subjects of natural monopolies are put in similar conditions to SUMMARY TABLE of selected indicators of small and medium business for effective control. Therefore it is necessary to “Electricity Governance Initiative” program remove natural monopoly and controlled market checks from the Law of the SUMMARY TABLE Indicators on the “Political Republic of Kazakhstan «On State Control and Supervision». These changes Process” of Management of the Electricity Power will allow rapid reaction to consumers’ complaints, and provide their pro- Sector in Kazakhstan tection while creating favorable conditions for small and medium business TABLE OF INDICATORS on “Political Process” development «– told vice-president of the Agency on Regulation of Natural of the Electricity Power Sector Management in Monopolies. Kazakhstan SUMMARY TABLE indicators on “Regulatory In the least, the fact that Agency on Regulation of Natural Monopolies regu- Process” of electricity sector management of larly carries out ‘Open Days’ with the idea that all the interested persons are Kazakhstan Clarity of the es- told about the primary functions of the department and the measures it takes Table of evaluation of “Regulatory Process” sential basics of Yes on improving tariff legislation allows us to speak about the existence of clar- indicators of the electricity sector governance in decisions made ity of the essential basics of decisions made. In 2013 the ‘Open Day’ will take Kazakhstan place on December 6. although the information is mainly of a highly special- SUMMARY TABLE of indicators on the evaluation ized character. Terminology is accessible only to experts. of ecological and social aspects of the Kazakhstan’s electrical power sector management TABLE OF INDICATORS on the evaluation of ecological and social aspects of Kazakhstan’s electricity sector management FILLED PROJECT INDICATORS REGULATORY PROCESS INDICATORS

186 TABLE OF CONTENT DETAILED EXPLANATION Section 1. HISTORY AND CURRENT STATUS OF ELECTRIC POWER INDUSTRY EVALUATION DECISION ҚАЗАҚША Section 2. DEVELOPMENT OBJECTIVES Section 3. MAIN PRINCIPLES AND STRATEGIES FOR ELECTRIC POWER INDUSTRY Evaluation not applicable / Not evaluated DEVELOPMENT IN THE REPUBLIC OF KAZAKHSTAN Reporting or activity meets none of the quality elements “Low” Section 4. “TRANSPARENT TARIFF” CIVIL РУССКИЙ INITIATIVE: CONTENT AND WAYS OF Reporting or activity meets one quality element “Low to Average” IMPLEMENTATION Reporting or activity meets two quality elements “Average” BASIC QUESTIONNAIRE ON INDICATORS Reporting or activity meets three quality elements “Average to High” ENGLISH

187 TABLE OF CONTENT RP 16 Section 1. HISTORY AND CURRENT STATUS OF REGULATORY BODY REACTION ON THE SOCIAL AND ENVIRONMENTAL ISSUE CLAIMS ELECTRIC POWER INDUSTRY ҚАЗАҚША Quality Ele- Indica- Section 2. DEVELOPMENT OBJECTIVES Explanation Section 3. MAIN PRINCIPLES AND STRATEGIES ments tor FOR ELECTRIC POWER INDUSTRY DEVELOPMENT IN THE REPUBLIC OF As a rule, when an application relating to an environmental issue is submit- KAZAKHSTAN Explanations ted to the Authorized Body in the power industry area, the applicant receives Section 4. “TRANSPARENT TARIFF” CIVIL in providing re- No РУССКИЙ an answer stating the matter is not covered by the competence of the Autho- INITIATIVE: sponse to claims CONTENT AND WAYS OF rized Body. IMPLEMENTATION All the environmental issues are covered by the MOSIVR and its territorial BASIC QUESTIONNAIRE ON INDICATORS Mandate appli- division competence. At regional Mayors on a local level there are managers cation on envi- ENGLISH No of natural resources who are also authorized in some environmental issues. ronmental and SUMMARY TABLE of selected indicators of The MINT competence doesn’t include solutions for environmental problems “Electricity Governance Initiative” program social issues in electrical power sector. SUMMARY TABLE Indicators on the “Political Process” of Management of the Electricity Power DETAILED EXPLANATION: The established practices of power distribution between regulatory bodies means Sector in Kazakhstan a clear competence split. According to MINT’s answer, 11 applications concerning environmental protection TABLE OF INDICATORS on “Political Process” were received over the last 2 years. However the sense of their content and given answers weren’t exposed of the Electricity Power Sector Management in Kazakhstan to expert groups citing a reference to a ban of transfer of Government bodies’ correspondence on citizens’ applications to third parties. SUMMARY TABLE indicators on “Regulatory Process” of electricity sector management of Kazakhstan EVALUATION DECISION

Table of evaluation of “Regulatory Process” Evaluation not applicable / Not evaluated Not applicable indicators of the electricity sector governance in Kazakhstan Reaction of regulatory body on environmental and social issues doesn’t correspond “Low” SUMMARY TABLE of indicators on the evaluation any of qualitative elements. of ecological and social aspects of the Kazakhstan’s electrical power sector management Reaction of regulatory body on environmental and social issues corresponds to one “Average” TABLE OF INDICATORS on the evaluation of qualitative element. ecological and social aspects of Kazakhstan’s electricity sector management Reaction of regulatory body on environmental and social issues corresponds to both “High” FILLED PROJECT INDICATORS qualitative elements. REGULATORY PROCESS INDICATORS

Researcher and Organization names: Vadim Litvinov, expert of PF “Environment-Youth-Initiative-Development”, member of NGO “Transparent tariff“ National Association. Information source: Answers from the party of authorized bodies, the Regulation on MINT.

188 TABLE OF CONTENT RP 17 Section 1. HISTORY AND CURRENT STATUS OF PREVENTIVE INITIATIVES OF REGULATORY BODY ELECTRIC POWER INDUSTRY ҚАЗАҚША Quality Ele- Indica- Section 2. DEVELOPMENT OBJECTIVES Explanation Section 3. MAIN PRINCIPLES AND STRATEGIES ments tor FOR ELECTRIC POWER INDUSTRY DEVELOPMENT IN THE REPUBLIC OF KAZAKHSTAN MINT and the Agency on Regulation of Natural Monopolies don’t prepare 1. Independently statistics on the affairs initiated by the public. MINT’s activity also doesn’t Section 4. “TRANSPARENT TARIFF” CIVIL РУССКИЙ initiated affairs provide for interaction with public associations. For explanations , a letter INITIATIVE: No CONTENT AND WAYS OF (Suo-motu with a request to provide information on independently initiated affairs were IMPLEMENTATION Petitions) sent to all the regional Departments of the Agency on Regulation of Natural Monopolies. As of now no answers to the letters were received. BASIC QUESTIONNAIRE ON INDICATORS ENGLISH Announcements about public hearings already carried out are published on SUMMARY TABLE of selected indicators of the website of the Agency on Regulation of Natural Monopolies (http:// www. “Electricity Governance Initiative” program arem. gov.kz); information introducing new power supply tariffs is published SUMMARY TABLE Indicators on the “Political on the same website. Announcements about public hearings carried out are Process” of Management of the Electricity Power published, at least one day before the event is realized; mostly within two Sector in Kazakhstan weeks. In order to counteract possibility of corruption an electronic format TABLE OF INDICATORS on “Political Process” is provided for submitting demands , along with development of an exhaus- of the Electricity Power Sector Management in tive list of refusals based on monopolist demands, minimizing monopolist’s Kazakhstan contact with representatives of the Agency, and carrying out examination of SUMMARY TABLE indicators on “Regulatory tariff with advisory council members’ participation at all levels of tariff ap- Process” of electricity sector management of proval offered. In order to ensure transparency of tariff approval a «Consumer Kazakhstan 2 . Detailed Calculator» and information on investment programs of subjects of natural discussions, re- Table of evaluation of “Regulatory Process” Yes monopoly and their execution were especially placed on the official website searches, confer- indicators of the electricity sector governance in of the Agency and press tours, «Round Tables», public hearings meetings and Kazakhstan ences briefings are carried out, and a reception of citizens is conducted. Memo- SUMMARY TABLE of indicators on the evaluation randums of cooperation between the Agency and National Economic Cham- of ecological and social aspects of the Kazakhstan’s electrical power sector management ber of Kazakhstan «Atameken» Union», and with national public association «National Consumers’ League» are signed. According to Duysebayev Asylbek TABLE OF INDICATORS on the evaluation of Zheksenbayevich, deputy of the Agency, «informing consumers about tariff ecological and social aspects of Kazakhstan’s electricity sector management changes shall be provided by general coverage: on television, in newspapers, on accounts, receipts, and for the subjects of “Low” power in rural areas – FILLED PROJECT INDICATORS in places of mass people congestion. Also hearing of participants shouldn’t REGULATORY PROCESS INDICATORS consist just of monopolists’ workers, concerning them a restriction to just seven persons is taken now. In order for these norms to work, it is ordered to make monopolist officials responsible by imposing a penalty on them».

189 TABLE OF CONTENT DETAILED EXPLANATION Section 1. HISTORY AND CURRENT STATUS OF ELECTRIC POWER INDUSTRY EVALUATION DECISION ҚАЗАҚША Section 2. DEVELOPMENT OBJECTIVES Section 3. MAIN PRINCIPLES AND STRATEGIES FOR ELECTRIC POWER INDUSTRY Evaluation not applicable / Not evaluated DEVELOPMENT IN THE REPUBLIC OF KAZAKHSTAN Reporting or activity meets none of the quality elements “Low” Section 4. “TRANSPARENT TARIFF” CIVIL РУССКИЙ INITIATIVE: CONTENT AND WAYS OF Reporting or activity meets one quality element “Low to Average” IMPLEMENTATION Reporting or activity meets two quality elements “Average” BASIC QUESTIONNAIRE ON INDICATORS Reporting or activity meets three quality elements “Average to High” ENGLISH

190 TABLE OF CONTENT RP 18 Section 1. HISTORY AND CURRENT STATUS OF DISCLOSURE OF DOCUMENTS UNDER THE DISPOSAL OF REGULATORY BODY ELECTRIC POWER INDUSTRY ҚАЗАҚША Quality Ele- Indica- Section 2. DEVELOPMENT OBJECTIVES Explanation Section 3. MAIN PRINCIPLES AND STRATEGIES ments tor FOR ELECTRIC POWER INDUSTRY DEVELOPMENT IN THE REPUBLIC OF KAZAKHSTAN The Law No. 94-V of the Republic of Kazakhstan «On Personal Information and its Protection» dated May 21, 2013 Art. 11. «Confidentiality of personal Section 4. “TRANSPARENT TARIFF” CIVIL РУССКИЙ INITIATIVE: data» specifies: CONTENT AND WAYS OF IMPLEMENTATION 1. Owners and (or) operators, as well as third parties getting access to Assumption that personal information of limited availability, reinforce its confidentiality BASIC QUESTIONNAIRE ON INDICATORS documents are via observance of requirements of to allowing their distribution without available to the consent of the subject or his lawful representative or existence of other ENGLISH public in cases No legal basis. SUMMARY TABLE of selected indicators of “Electricity Governance Initiative” program where their con- 2. Persons who become aware of personal information of limited access for fidentiality isn’t SUMMARY TABLE Indicators on the “Political reasons of professional, service and labor relations are obliged to protect Process” of Management of the Electricity Power specific its confidentiality. Sector in Kazakhstan 3. Confidentiality of biometric data is established by the legislation of the TABLE OF INDICATORS on “Political Process” Republic of Kazakhstan. Documents are considered to be confidential, of the Electricity Power Sector Management in Kazakhstan but public sites of regulatory bodies and documents without signature and «confidential» stamp are available to the public. SUMMARY TABLE indicators on “Regulatory Process” of electricity sector management of Kazakhstan According to the APC of the Republic of Kazakhstan answering the inquiry, “reference to point 1 of Article 43 of the Law of the Republic of Kazakhstan Table of evaluation of “Regulatory Process” “On Competition”, information on commercial, official and other secrets pro- indicators of the electricity sector governance in Kazakhstan tected by the law, obtained by antimonopoly authority while implementing its powers isn’t subject to disclosure, except for cases established by Laws of SUMMARY TABLE of indicators on the evaluation of ecological and social aspects of the Accurate proce- the Republic of Kazakhstan. dures and rules Kazakhstan’s electrical power sector management No Antimonopoly authority staff carries a responsibility established by the Laws of defining «con- TABLE OF INDICATORS on the evaluation of of the Republic of Kazakhstan for disclosure of information of commercial fidentiality» ecological and social aspects of Kazakhstan’s nature and official and other secrets protected by the law. electricity sector management The harm caused to a natural or legal entity as a result of disclosure of infor- FILLED PROJECT INDICATORS mation of commercial nature and official and other secrets protected by law REGULATORY PROCESS INDICATORS and enforced by antimonopoly authority or its officials is subject to a penalty according to the civil legislation of the Republic of Kazakhstan.»

191 TABLE OF CONTENT DETAILED EXPLANATION: Documents of the regulatory body are in public access on the websites of regula- Section 1. HISTORY AND CURRENT STATUS OF ELECTRIC POWER INDUSTRY tory bodies. Rules for determination of confidentiality are not registered legislatively. Procedure on access to ҚАЗАҚША Section 2. DEVELOPMENT OBJECTIVES information is carried out according to edicts of the Law «On Information». The process of obtaining certain documentation approving tariff increase or fall under Authorized Body (RK ARNM) is very difficult taking into Section 3. MAIN PRINCIPLES AND STRATEGIES FOR ELECTRIC POWER INDUSTRY account the workings in municipal structures of electric power distribution. DEVELOPMENT IN THE REPUBLIC OF KAZAKHSTAN EVALUATION DECISION Section 4. “TRANSPARENT TARIFF” CIVIL РУССКИЙ INITIATIVE: CONTENT AND WAYS OF Evaluation not applicable / Not evaluated IMPLEMENTATION Reporting or activity meets none of the quality elements “Low” BASIC QUESTIONNAIRE ON INDICATORS Reporting or activity meets one quality element “Low to Average” ENGLISH SUMMARY TABLE of selected indicators of “Electricity Governance Initiative” program Reporting or activity meets two quality elements “Average” SUMMARY TABLE Indicators on the “Political Process” of Management of the Electricity Power Reporting or activity meets three quality elements “Average to High” Sector in Kazakhstan Reporting or activity meets all the quality elements “High” TABLE OF INDICATORS on “Political Process” of the Electricity Power Sector Management in Kazakhstan Researcher and Organization names: Sara Espenova, PF “KAMEDA” SUMMARY TABLE indicators on “Regulatory Process” of electricity sector management of Information source: Laws of the Republic of Kazakhstan “On Competition Protection”, “On Natural Monopolies Kazakhstan and Controlled Markets”, and “On Power Industry”. Blog of the Government of the Republic of Kazakhstan ap- Table of evaluation of “Regulatory Process” plications №222210/2, №219127/1, №221611, №218508/1Additional information: official request to GSS. indicators of the electricity sector governance in The official answer № 07-1-14/5459 has been received on 17.10.2013. Kazakhstan SUMMARY TABLE of indicators on the evaluation of ecological and social aspects of the Kazakhstan’s electrical power sector management TABLE OF INDICATORS on the evaluation of ecological and social aspects of Kazakhstan’s electricity sector management FILLED PROJECT INDICATORS REGULATORY PROCESS INDICATORS

192 TABLE OF CONTENT RP 19 Section 1. HISTORY AND CURRENT STATUS OF PROCEDURE FOR PUBLIC ACCESS TO DOCUMENTS OF THE REGULATORY BODY ELECTRIC POWER INDUSTRY ҚАЗАҚША Quality Ele- Indica- Section 2. DEVELOPMENT OBJECTIVES Explanation Section 3. MAIN PRINCIPLES AND STRATEGIES ments tor FOR ELECTRIC POWER INDUSTRY DEVELOPMENT IN THE REPUBLIC OF KAZAKHSTAN Regulatory bodies are: Agency of Competition Protection of the Republic of Kazakhstan and the Agency on Regulation of Natural Monopolies of the Re- Section 4. “TRANSPARENT TARIFF” CIVIL РУССКИЙ INITIATIVE: public of Kazakhstan. The Law «On natural monopolies and controlled mar- CONTENT AND WAYS OF kets of Kazakhstan» No. 272-I dated July 9, 1998. The database is available IMPLEMENTATION on information system: electronic database on monitoring activity of monopolists. The electronic database on monitoring activity of monopolists is BASIC QUESTIONNAIRE ON INDICATORS

developed in 2004 – 2006 and contains data on production and economic, ENGLISH financial and economic aspects of the functioning of enterprises and organi- SUMMARY TABLE of selected indicators of zations included in federal and local sections of the State Register of natural “Electricity Governance Initiative” program monopolists, whose activity is subject to regulation in part by the Agency on SUMMARY TABLE Indicators on the “Political Regulation of Natural Monopolies of the Republic of Kazakhstan as per the Process” of Management of the Electricity Power legislation of the Republic of Kazakhstan, primarily, regarding tariff policy – Sector in Kazakhstan services offered by natural monopolists on tariff coordination . Well indexed TABLE OF INDICATORS on “Political Process” The database is formed based on the documents submitted to Agency by of the Electricity Power Sector Management in database of doc- Yes subjects of natural monopolies (SNM), both in demands for setting tariffs and Kazakhstan uments the regular reporting – such as execution of tariff estimate, balance sheet, SUMMARY TABLE indicators on “Regulatory Process” of electricity sector management of results of financial and economic activity, etc. Kazakhstan Data of the database is grouped by the SNM, to calendar years and includes Table of evaluation of “Regulatory Process” general (from invoice) data on SNM, services volumes rendered by them and indicators of the electricity sector governance in tariffs for these services, and the main indicators of their financial and eco- Kazakhstan nomic activity. Besides, reports detailing technical and financial expertise SUMMARY TABLE of indicators on the evaluation of certain subjects of natural monopolies are periodically carried out by the of ecological and social aspects of the Agency. Database provides information supporting the decision-making by Kazakhstan’s electrical power sector management specialists of the Agency on Regulation of Natural Monopolies of the Repub- TABLE OF INDICATORS on the evaluation of lic of Kazakhstan on various aspects of monopolist activity and their tariff ecological and social aspects of Kazakhstan’s electricity sector management policy providing sustainable development of the monopolist as well as the control of tariff growth for a stable state economy development as a whole FILLED PROJECT INDICATORS and prevention of social conflicts. REGULATORY PROCESS INDICATORS Simple, well determined proce- Database is available on the system of information of monopolists. Electronic dure for inspec- Yes database on monopolist activity monitoring was developed in 2004 – 2006 tion / obtaining and contains adequate data. documents

193 TABLE OF CONTENT Payment for information required from public institutions is forbidden by the Section 1. HISTORY AND CURRENT STATUS OF Reasonable cost Yes ELECTRIC POWER INDUSTRY legislation of the Republic of Kazakhstan. ҚАЗАҚША Section 2. DEVELOPMENT OBJECTIVES Websites are developed in all the municipal organizations, engaged in gen- Section 3. MAIN PRINCIPLES AND STRATEGIES FOR ELECTRIC POWER INDUSTRY eration of electric heating and power supply. The events held for the purpose DEVELOPMENT IN THE REPUBLIC OF of increasing public awareness via public access through announcements in KAZAKHSTAN local mass media, brochures, websites and news blocks of information, are at Section 4. “TRANSPARENT TARIFF” CIVIL РУССКИЙ INITIATIVE: the disposal of regulatory body. In case of lack of such actions, smaller num- CONTENT AND WAYS OF ber of people will know about the measures undertaken, and respectively, IMPLEMENTATION won’t use them, despite their existence and the simplicity of procedures. According to p. 7, Art. 7 of the ARNM Law of the Republic of Kazakhstan, Sub- BASIC QUESTIONNAIRE ON INDICATORS jecta of Natural Monopoly are obliged: to conduct an obligatory annual audit ENGLISH by audit organizations, except for subjects of the natural monopolies speci- SUMMARY TABLE of selected indicators of Wide dissemina- fied in p. 3 of Art. 15 of this Law, who conduct an obligatory audit once in “Electricity Governance Initiative” program tion of informa- Yes every three years. The auditor’s report and annual financial statements shall SUMMARY TABLE Indicators on the “Political tion be published in periodically printed publications distributed in the respec- Process” of Management of the Electricity Power tive territory of the territorial administrative unit where subject of natural Sector in Kazakhstan monopoly carries out its activity, no later than thirty days from the moment TABLE OF INDICATORS on “Political Process” of approval of the auditor’s report by an order established by the legislation of the Electricity Power Sector Management in of the Republic of Kazakhstan; Kazakhstan Events held for the purpose of public awareness increase concerning public SUMMARY TABLE indicators on “Regulatory Process” of electricity sector management of access to information, being at the disposal of regulatory body through an- Kazakhstan nouncements, brochures, web sites and news blocks. In case of a lack of similar action smaller number of people will know about measures undertaken, Table of evaluation of “Regulatory Process” indicators of the electricity sector governance in and respectively, won’t use them, despite their existence and the simplicity Kazakhstan of the procedure. SUMMARY TABLE of indicators on the evaluation of ecological and social aspects of the DETAILED EXPLANATION: Spheres of natural monopolies in the Republic of Kazakhstan include: transfer and Kazakhstan’s electrical power sector management (or) distribution of electric energy; production, transfer, distribution and (or) supply of thermal energy; techni- TABLE OF INDICATORS on the evaluation of cal scheduling of electric energy launch into a network and its consumption; organizations balancing electric ecological and social aspects of Kazakhstan’s energy production-consumption; electricity sector management The law «On Competition Protection» of the Republic of Kazakhstan. The Present Law covers the territory FILLED PROJECT INDICATORS of the Republic of Kazakhstan and expounds on the relations, which influence or can influence commodity REGULATORY PROCESS INDICATORS market competition of the Republic of Kazakhstan where subjects of the market, consumers, and Government bodies participate. Provisions of the present Law also apply to actions of the market subject being outside the territory of the Republic of Kazakhstan in cases resulting in such actions when one of the following conditions is present: the main fixed assets and (or) intangible assets or actions (shares of the authorized capital) of the market subjects, are in the territory of the Republic of Kazakhstan; property or non-property rights concerning legal entities of the Republic of Kazakhstan, is directly or indirectly affected; or competition in the Republic of Kazakhstan is limited.

194 TABLE OF CONTENT Section 1. HISTORY AND CURRENT STATUS OF EVALUATION DECISION ELECTRIC POWER INDUSTRY ҚАЗАҚША Section 2. DEVELOPMENT OBJECTIVES Evaluation not applicable / Not evaluated Section 3. MAIN PRINCIPLES AND STRATEGIES FOR ELECTRIC POWER INDUSTRY DEVELOPMENT IN THE REPUBLIC OF Reporting or activity meets none of the quality elements “Low” KAZAKHSTAN

BASIC QUESTIONNAIRE ON INDICATORS Reporting or activity meets three quality elements “Average to High” ENGLISH Reporting or activity meets all the quality elements “High” SUMMARY TABLE of selected indicators of “Electricity Governance Initiative” program Researcher and Organization names: Sara Espenova, OF «KAMEDA» SUMMARY TABLE Indicators on the “Political Process” of Management of the Electricity Power Information source: http://www.arem.gov.kz/ ; http://azk.gov.kz/rus/, law «Natural Monopolies and Controlled Sector in Kazakhstan Markets of Kazakhstan» № 272-I dated 9 July, 1998. TABLE OF INDICATORS on “Political Process” Additional information: Official request to the Agency on Regulation of Natural Monopolies, GSS. No official of the Electricity Power Sector Management in answer has been received yet. Kazakhstan SUMMARY TABLE indicators on “Regulatory Process” of electricity sector management of Kazakhstan Table of evaluation of “Regulatory Process” indicators of the electricity sector governance in Kazakhstan SUMMARY TABLE of indicators on the evaluation of ecological and social aspects of the Kazakhstan’s electrical power sector management TABLE OF INDICATORS on the evaluation of ecological and social aspects of Kazakhstan’s electricity sector management FILLED PROJECT INDICATORS REGULATORY PROCESS INDICATORS

195 TABLE OF CONTENT RP 20 PLACE FOR PUBLIC PARTICIPATION IN THE REGULATORY PROCESS Section 1. HISTORY AND CURRENT STATUS OF ELECTRIC POWER INDUSTRY Quality Elements Indicator Explanation ҚАЗАҚША Section 2. DEVELOPMENT OBJECTIVES Section 3. MAIN PRINCIPLES AND STRATEGIES The Art. 14-1, Law of the Republic of Kazakhstan dated 9 July, 1998 «On natu- FOR ELECTRIC POWER INDUSTRY ral monopolies and controlled markets». p. 4 of the «Obligation of autho- DEVELOPMENT IN THE REPUBLIC OF KAZAKHSTAN rized body» requires carrying out public hearings when reviewing requests

Section 4. “TRANSPARENT TARIFF” CIVIL from Subjects of Natural Monopoly for rate settings (prices, rate collection) РУССКИЙ INITIATIVE: or setting their limits. The Authorized Body is obliged to publish in periodic Any interested CONTENT AND WAYS OF journals information on date and a venue of public hearings for approval IMPLEMENTATION parties or per- of tariffs not later than ten calendar days before these public hearings take sons have the place. According to the Government Resolution of the Republic of Kazakhstan BASIC QUESTIONNAIRE ON INDICATORS right to partici- Yes

dated 21 April, 2003 «On Rules for approval of holding public hearings when ENGLISH pate in hearings reviewing requests for setting rates (prices, collection rates) or their limits for of the regulatory SUMMARY TABLE of selected indicators of adjustable services (goods, operations) of Subjects of Natural Monopoly», Art. body. “Electricity Governance Initiative” program 1, p. 3 «public hearing – it is a procedure of discussing the project rate (price, SUMMARY TABLE Indicators on the “Political rate collection ) or its limit for adjustable services (goods, operations) of Sub- Process” of Management of the Electricity Power jects of Natural Monopoly with an invitation of deputies, representatives of Sector in Kazakhstan Government bodies, consumers and their public associations, mass media, in- TABLE OF INDICATORS on “Political Process” dependent experts and Subjects of Natural Monopoly». of the Electricity Power Sector Management in Kazakhstan Government Resolution of the Republic of Kazakhstan dated 21 April, 2003 SUMMARY TABLE indicators on “Regulatory «On Rules for approval of holding public hearings when reviewing requests Process” of electricity sector management of for rates setting (prices, collection rates) or their limits for adjustable services Kazakhstan (goods, operations) of Subjects of Natural Monopoly» determines the «Order Table of evaluation of “Regulatory Process” Have a right to of holding public hearing « according to Art. 2 p. 15 of which, «public hearing indicators of the electricity sector governance in make statements, participants can state their point of view on the matters discussed, ask ques- Kazakhstan which become tions to speakers, use visual aid materials in their speech (posters, diagrams SUMMARY TABLE of indicators on the evaluation part of the pro- No and others) and add their speech in writing to the public hearing’s protocol»; of ecological and social aspects of the tocol of hearings According to p. 18, in the course of public hearing minutes are noted. The Kazakhstan’s electrical power sector management of the regulatory minutes (protocol) shall contain the information specified in point 7-1 of the TABLE OF INDICATORS on the evaluation of body. Rules, and information about the time of public hearing’s beginning and end, ecological and social aspects of Kazakhstan’s surnames and initials of the speakers and summary of essential performance, electricity sector management and results of the hearing. It is necessary to note that summary of essen- FILLED PROJECT INDICATORS tial performance is often published in practice with the most critical remarks REGULATORY PROCESS INDICATORS missing. Government Resolution of the Republic of Kazakhstan dated 21 April, 2003 Preliminary dec- «On Rules for approval of holding public hearings when reviewing requests laration about for setting rates (prices, collection rates) or their limits for adjustable services public hearings Yes (goods, operations) of Subjects of Natural Monopoly» obliges the Authorized of the regulatory Body to post information about the date and venue of public hearings on its body. Internet site as well as publish this information in periodic publications.

196 TABLE OF CONTENT DETAILED EXPLANATION: Public hearings are carried out according to the procedure established by the Gov- Section 1. HISTORY AND CURRENT STATUS OF ELECTRIC POWER INDUSTRY ernment of the Republic of Kazakhstan, not later than ten calendar days before making a decision on setting ҚАЗАҚША Section 2. DEVELOPMENT OBJECTIVES rates. According to Art. 17. “Order of reviewing rate projects (prices, rate collection ) or their limits and estimated costs” p.2 “authorized body is obliged to place information about the date and venue of public hearings Section 3. MAIN PRINCIPLES AND STRATEGIES FOR ELECTRIC POWER INDUSTRY on its Internet site as well as publish this information in periodic publications: DEVELOPMENT IN THE REPUBLIC OF KAZAKHSTAN 1) in case of setting rates (prices, rate collection) or their limits on adjustable services (goods, operations) of

Section 4. “TRANSPARENT TARIFF” CIVIL Subject of Natural Monopoly in general is ordered not later than fifteen calendar days before; РУССКИЙ INITIATIVE: CONTENT AND WAYS OF 2) in case setting rates (prices, rate collection) on adjustable services (goods, operations) of Subject of Natural IMPLEMENTATION Monopoly according to p. 5 of Art.18 of the present Law, not later than seven calendar days”. Requirements of the first part of the present item don’t extend on subjects of natural monopolies of low power for BASIC QUESTIONNAIRE ON INDICATORS approval of rates (prices, rate collection) on adjustable services (goods, operations). ENGLISH Public hearings are carried out with the approval of: SUMMARY TABLE of selected indicators of “Electricity Governance Initiative” program 1) rate limits (prices, collection rates) on adjustable services (goods, operations) of Subject of Natural Monopoly no later than in thirty calendar days prior to making decision on their approval; SUMMARY TABLE Indicators on the “Political Process” of Management of the Electricity Power 2) rates (prices, rate collection) on adjustable services (goods, operations) of Subject of Natural Monopoly not Sector in Kazakhstan later than fifteen calendar days before making decision on their approval; TABLE OF INDICATORS on “Political Process” of the Electricity Power Sector Management in 3) rates (prices, rate collection) on adjustable services (goods, operations) of Subject of Natural Monopoly Kazakhstan according to p. 5 of Art. 18 of the present Law not later than seven calendar days before making decision SUMMARY TABLE indicators on “Regulatory on their approval; Process” of electricity sector management of 4) rates (prices, rate collection) on adjustable services (goods, operations) of Subject of Natural Monopoly of Kazakhstan low power not later than one calendar day before making decision on their approval. Table of evaluation of “Regulatory Process” indicators of the electricity sector governance in Subject of Natural Monopoly after publication of information about the date of public hearings is obliged to Kazakhstan provide at the request of public hearings participants: SUMMARY TABLE of indicators on the evaluation • drafts of tariff estimates, rates (prices, rate collection) on adjustable services (goods, operations) or of ecological and social aspects of the Kazakhstan’s electrical power sector management their limits; TABLE OF INDICATORS on the evaluation of • information about reasons for increasing rates (prices, rate collection) on adjustable services (goods, ecological and social aspects of Kazakhstan’s operations) or their limits with economically reasonable calculations. Government Resolution of the electricity sector management Republic of Kazakhstan on the 21 of April, 2003, Rules for carrying out public hearings when reviewing FILLED PROJECT INDICATORS requests for rate approval (prices, rate collection) or their limits on adjustable services (goods, operations) of subjects of natural monopolies are adopted; hearings are carried out according to these rules: REGULATORY PROCESS INDICATORS 1) with the approval of rate limits (prices, rate collection) on adjustable services (goods, operations) of Subject of Natural Monopoly no later than thirty calendar days prior to making decision on approval; 2) with the approval of rates (prices, rate collection) on adjustable services (goods, operations) of Subject of Natural Monopoly no later than fifteen calendar days prior to making decision on approval;

197 TABLE OF CONTENT 3) with the approval of rates (prices, rate collection) on adjustable services (goods, operations) of Subject Section 1. HISTORY AND CURRENT STATUS OF ELECTRIC POWER INDUSTRY of Natural Monopoly according to p. 5 of Art. 18 of the Law of the Republic of Kazakhstan “On natural ҚАЗАҚША Section 2. DEVELOPMENT OBJECTIVES monopolies and controlled markets” no later than seven calendar days prior to acceptance of decision on the approval; Section 3. MAIN PRINCIPLES AND STRATEGIES FOR ELECTRIC POWER INDUSTRY DEVELOPMENT IN THE REPUBLIC OF 4) with the approval of rates (prices, rate collection) on adjustable services (goods, operations) of Subject of KAZAKHSTAN Natural Monopoly of low power no later than one calendar day prior to making decision on the approval.

Section 4. “TRANSPARENT TARIFF” CIVIL РУССКИЙ INITIATIVE: Government Resolution of the Republic Kazakhstan on the 21 of April, 2003 “On Rules for approval of holding CONTENT AND WAYS OF public hearings when reviewing requests for rates setting (prices, rate collection) or their limits for adjustable IMPLEMENTATION services (goods, operations) of Subjects of Natural Monopoly” obliges Authorized Body to place information about the date and venue of public hearings on its Internet site as well as publish this information in periodic BASIC QUESTIONNAIRE ON INDICATORS journals: ENGLISH 1) with approval of rates (prices, rate collection) or their limits on adjustable services (goods, operations) of SUMMARY TABLE of selected indicators of Subject of Natural Monopoly in eneral is ordered not later than fifteen calendar days before; “Electricity Governance Initiative” program 2) with approval of rates (prices, rate collection) on adjustable services (goods, operations) of Subject of SUMMARY TABLE Indicators on the “Political Process” of Management of the Electricity Power Natural Monopoly according to p. 5 of Art. 18 of the Law of the Republic of Kazakhstan; “On natural Sector in Kazakhstan monopolies and controlled markets” no later than seven calendar days. TABLE OF INDICATORS on “Political Process” Requirements on publishing announcements about forthcoming public hearings don’t extend on subjects of of the Electricity Power Sector Management in natural monopolies of low power for approval of rates (prices, rate collection) on adjustable services (goods, Kazakhstan operations). Announcement about the forthcoming public hearing shall include the following data: SUMMARY TABLE indicators on “Regulatory Process” of electricity sector management of 1) name and location of the organizer of hearing; Kazakhstan 2) date and venue of hearing; Table of evaluation of “Regulatory Process” indicators of the electricity sector governance in 3) name of Subject of Natural Monopoly and type of its service (goods, operations) concerning rates approval Kazakhstan (prices, rate collection) or their limits on adjustable services (goods, operations) for which the application SUMMARY TABLE of indicators on the evaluation was submitted for. of ecological and social aspects of the Kazakhstan’s electrical power sector management EVALUATION DECISION TABLE OF INDICATORS on the evaluation of ecological and social aspects of Kazakhstan’s Evaluation not applicable / Not evaluated electricity sector management FILLED PROJECT INDICATORS Reporting or activity meets none of the quality elements “Low”

REGULATORY PROCESS INDICATORS Reporting or activity meets one quality element “Low to Average”

Reporting or activity meets two quality elements “Average”

Reporting or activity meets three quality elements “Average to High”

Reporting or activity meets all the quality elements “High”

198 TABLE OF CONTENT Researcher and Organization names: Kurmanbayeva А.А. ОО «Committee for Public Control over the Govern- Section 1. HISTORY AND CURRENT STATUS OF ELECTRIC POWER INDUSTRY ment Program Execution at Local Level». ҚАЗАҚША Section 2. DEVELOPMENT OBJECTIVES Information source: Law of the Republic of Kazakhstan on the 8 of July, 1998 No. 272-I “On natural monopolies Section 3. MAIN PRINCIPLES AND STRATEGIES and controlled markets” http://online.zakon.kz/Document/?doc_id=1009803 , FOR ELECTRIC POWER INDUSTRY DEVELOPMENT IN THE REPUBLIC OF Government Resolution of the Republic of Kazakhstan on the 21 of April, 2003 No. 376 “On Rules for approval KAZAKHSTAN of holding public hearings when reviewing requests for rates setting (prices, rate collection) or their lim- Section 4. “TRANSPARENT TARIFF” CIVIL РУССКИЙ INITIATIVE: its for adjustable services (goods, operations) of Subject of Natural Monopoly”, http://adilet.zan.kz/rus/docs/ CONTENT AND WAYS OF . Analytical note according to “Strategic Plan of Agency on Regulation of Natural Monopolies of IMPLEMENTATION P030000376_ the Republic of Kazakhstan for 2011 – 2015”, approved by Government Resolution of the Republic of Kazakh-

BASIC QUESTIONNAIRE ON INDICATORS stan on the 8 of February, 2011 No. 99. Period 2012: https://www.google.ru/url?sa=t&rct=j&q=&esrc=s&source=web&cd=5&cad=rja&ved=0CEQQFjAE&url=http ENGLISH %3A%2F%2Fwww.arem.gov.kz%2Fupload%2Fdspsa%2FAnalitik_Zap_StrPlan_RUS.doc&ei=oLhcUuT7G4XFt SUMMARY TABLE of selected indicators of “Electricity Governance Initiative” program Qa56YH4BA&usg=AFQjCNGDzZ19cYxYq8NlOjI7DlLNkNv3uQ&bvm=bv.53899372,d.Yms SUMMARY TABLE Indicators on the “Political Additional information: 925 public hearings on changing of rates and losses affecting more than 15 thousand Process” of Management of the Electricity Power people were held in 2012, including Subject of Natural Monopoly services (further – SNM), deputies, represen- Sector in Kazakhstan tatives of public associations, mass media and independent experts. TABLE OF INDICATORS on “Political Process” of the Electricity Power Sector Management in Kazakhstan SUMMARY TABLE indicators on “Regulatory Process” of electricity sector management of Kazakhstan Table of evaluation of “Regulatory Process” indicators of the electricity sector governance in Kazakhstan SUMMARY TABLE of indicators on the evaluation of ecological and social aspects of the Kazakhstan’s electrical power sector management TABLE OF INDICATORS on the evaluation of ecological and social aspects of Kazakhstan’s electricity sector management FILLED PROJECT INDICATORS REGULATORY PROCESS INDICATORS

199 TABLE OF CONTENT RP 21 PUBLIC HAS ACCESS TO HEARINGS AND REGULATORY DOCUMENTS Section 1. HISTORY AND CURRENT STATUS OF ELECTRIC POWER INDUSTRY ҚАЗАҚША Section 2. DEVELOPMENT OBJECTIVES Quality Elements Indicator Explanation Section 3. MAIN PRINCIPLES AND STRATEGIES FOR ELECTRIC POWER INDUSTRY Official request answered on behalf of the Ministry of Industry and New Tech- DEVELOPMENT IN THE REPUBLIC OF nologies of the Republic of Kazakhstan and the Agency on Regulation of Nat- KAZAKHSTAN ural Monopolies of the Republic of Kazakhstan didn’t give information about Section 4. “TRANSPARENT TARIFF” CIVIL РУССКИЙ INITIATIVE: public access to hearings and regulatory documents. There were no public CONTENT AND WAYS OF applications with questions addressed to the MINT. According to the Ministry IMPLEMENTATION interested persons and non-governmental organizations do not participate in the control of power supply sector. The text of the letter received from the Number of re- BASIC QUESTIONNAIRE ON INDICATORS MINT tells that Laws of the Republic of Kazakhstan regulating electric heat- quests for docu- ENGLISH No ing and power supply sector does not provide for public involvement in the ments made by control of this sector; however civil society representatives can be a part of SUMMARY TABLE of selected indicators of the public “Electricity Governance Initiative” program the expert groups, helping with development of the law, Presidential Orders and Government Resolutions. The MINT employees don’t keep statistics on SUMMARY TABLE Indicators on the “Political Process” of Management of the Electricity Power the announcements received from public organizations. Letters with a re- Sector in Kazakhstan quest to provide information on independently initiated affairs were deliv- TABLE OF INDICATORS on “Political Process” ered to all the regional Departments of the Agency on Regulation of Natural of the Electricity Power Sector Management in Monopolies in order to clarify information. As of now no answer to these let- Kazakhstan ters were received. SUMMARY TABLE indicators on “Regulatory Process” of electricity sector management of It is only possible to trace the number of public hearings carried out by the Kazakhstan regional branches of the Agency on Regulation of Natural Monopolies: de- Table of evaluation of “Regulatory Process” tailed information about such actions is regularly published on the Agency’s indicators of the electricity sector governance in website at the following address: http://www.arem.gov.kz. In order to ensure Kazakhstan a transparent tariff setting, «Consumer Calculator « is especially placed on SUMMARY TABLE of indicators on the evaluation the Agency’s website as well as information on the investment programs of of ecological and social aspects of the subjects of natural monopolies and their execution, press tours, «round ta- Kazakhstan’s electrical power sector management bles», public hearings and meetings, briefings which are carried out, and any TABLE OF INDICATORS on the evaluation of citizen received. Memorandums of cooperation between the agency and «At- Involvement in ecological and social aspects of Kazakhstan’s Yes ameken» Union of National Economic Chamber of Kazakhstan are signed as electricity sector management public hearings well as with the national association «National Consumers’ League». Accord- FILLED PROJECT INDICATORS ing to Duysebayev Asylbek Zheksenbayevich, deputy of the Agency, «inform- REGULATORY PROCESS INDICATORS ing consumers about tariff changes shall be provided by general coverage: on television, in newspapers, on accounts, receipts and for subjects of low power in rural areas – in places of mass people congestion. Also the hearing participants shouldn’t just consist of monopolists’ workers, an order restric- tign them to seven persons has been entered now. In order these norms to work, it is suggested to make monopolist officials responsible by imposing penalties on them».

200 TABLE OF CONTENT DETAILED EXPLANATION Section 1. HISTORY AND CURRENT STATUS OF ELECTRIC POWER INDUSTRY EVALUATION DECISION ҚАЗАҚША Section 2. DEVELOPMENT OBJECTIVES Section 3. MAIN PRINCIPLES AND STRATEGIES FOR ELECTRIC POWER INDUSTRY Evaluation not applicable / Not evaluated DEVELOPMENT IN THE REPUBLIC OF KAZAKHSTAN Reporting or activity meets none of the quality elements “Low” Section 4. “TRANSPARENT TARIFF” CIVIL РУССКИЙ INITIATIVE: CONTENT AND WAYS OF Reporting or activity meets one quality element “Low to Average” IMPLEMENTATION Reporting or activity meets two quality elements “Average” BASIC QUESTIONNAIRE ON INDICATORS Reporting or activity meets three quality elements “Average to High” ENGLISH

201 TABLE OF CONTENT RP 22 Section 1. HISTORY AND CURRENT STATUS OF INSTITUTIONAL MECHANISMS FOR REPRESENTATION OF NON-INFLUENTIAL ELECTRIC POWER INDUSTRY GROUPS’ INTERESTS ҚАЗАҚША Section 2. DEVELOPMENT OBJECTIVES Quality Ele- Indica- Section 3. MAIN PRINCIPLES AND STRATEGIES Explanation FOR ELECTRIC POWER INDUSTRY ments tor DEVELOPMENT IN THE REPUBLIC OF KAZAKHSTAN

Section 4. “TRANSPARENT TARIFF” CIVIL There Are no electric power consumer protection boards. And there is no real РУССКИЙ INITIATIVE: representation of consumer group interests in the Government. MINT as well as CONTENT AND WAYS OF the Agency on Regulation of Natural Monopolies has no information about peti- IMPLEMENTATION tions made to regulatory bodies on behalf of socially isolated groups. Spontane- ously created initiative groups including a number of dissatisfied businessmen BASIC QUESTIONNAIRE ON INDICATORS or representatives from cooperatives of apartment owners, as well as single non- governmental organizations, in particular, association of legal entities «Consum- ENGLISH er League of Kazakhstan» are engaged in protecting consumer rights. At the leg- SUMMARY TABLE of selected indicators of “Electricity Governance Initiative” program islative level consumers have the right to protect their rights with a pre-judicial written application to the seller (manufacturer) who has violated their right; or SUMMARY TABLE Indicators on the “Political to authorised Government bodies with complaints on illegal actions of the seller Process” of Management of the Electricity Power (manufacturer); or to consumer protection boards; or to courts with the claim Sector in Kazakhstan application. In 2012 the draft Law of the Republic of Kazakhstan «On Amend- TABLE OF INDICATORS on “Political Process” ments to some Acts of the Republic of Kazakhstan Concerning Consumer Rights of the Electricity Power Sector Management in Protection» was developed, however up to now this regulatory act hasn’t entered Kazakhstan into force. Agency on Regulation of Natural Monopolies sets the tariff, earlier in- SUMMARY TABLE indicators on “Regulatory dependently adopted by power companies within the rate limit of the relevant Process” of electricity sector management of group. Government Resolution of the Republic Kazakhstan dated 25 March, 2009 Consumer repre- Kazakhstan No No. 392 approved rate limits for 7 years, reviewable annually until 2015. sentatives Table of evaluation of “Regulatory Process” Thus, the state a made decision to provide power companies with notable ben- indicators of the electricity sector governance in efits by rates increasing, but only for the purpose of carrying out of the appropri- Kazakhstan ate upgrade and modernization of existing production capacities. That means SUMMARY TABLE of indicators on the evaluation that the ideology of rate limit consists in that, the energy producing organiza- of ecological and social aspects of the tions receiving their rates shall perform certain investment obligations. At the Kazakhstan’s electrical power sector management same time the Head of Agency on Regulation of Natural Monopolies distributed TABLE OF INDICATORS on the evaluation of the information received as a result of checking on power companies, which ecological and social aspects of Kazakhstan’s used the financial means received as a result of electric power rate increase for electricity sector management a purpose which did not correspond to the ideology of rate limits. Thus, it is possible to conclude the absence of a truly operating mechanism of consumer rights FILLED PROJECT INDICATORS protection. For example, according to facts established in 2011 one of the power REGULATORY PROCESS INDICATORS companies made a dividend payment in the amount of more than 2 billion KZTs from income gained to its founders, thus of all the investment profit of 24 million KZTs those were the only payments. Secondly, produced electric power expenses were not included to the calculation of prime costs. These expenses for example, were from holding cultural festivities and mass sporting events, different membership dues as well as deposit interest received as a result of increasing rates, on savings.

202 TABLE OF CONTENT Consumer group representatives are composed of non-governmental orga- Section 1. HISTORY AND CURRENT STATUS OF ELECTRIC POWER INDUSTRY nizations, private initiative groups and cooperatives of apartment owners. ҚАЗАҚША Section 2. DEVELOPMENT OBJECTIVES Some coalitions and about 20 public associations are functioning on the territory of the Republic of Kazakhstan, which are constantly or periodically Section 3. MAIN PRINCIPLES AND STRATEGIES FOR ELECTRIC POWER INDUSTRY On behalf of dealing with issues of power supply sector’s transparency. Generally these DEVELOPMENT IN THE REPUBLIC OF KAZAKHSTAN non-influential No organizations are interested in the objectivity of power supplying enter- groups prises rates calculations, power companies’ accountability to the public and Section 4. “TRANSPARENT TARIFF” CIVIL РУССКИЙ INITIATIVE: stakeholders’ involvement in decision-making process. However non-gov- CONTENT AND WAYS OF ernmental organizations have no real influence on decision-making process, IMPLEMENTATION they are engaged in observation and propaganda activities only to advance power supply control initiative. BASIC QUESTIONNAIRE ON INDICATORS ENGLISH Interests of socially isolated groups are represented at the governmental SUMMARY TABLE of selected indicators of level preferentially by officials and regulatory body staff. Representatives of “Electricity Governance Initiative” program social groups aren’t involved in decision-making process. There is no bal- SUMMARY TABLE Indicators on the “Political anced practice of involvement of governmental bodies representing execu- Process” of Management of the Electricity Power Representation tive branch on social development in the process of discussing power sup- Sector in Kazakhstan on behalf of ply questions. Actual interests of the public, including vulnerable categories, Yes TABLE OF INDICATORS on “Political Process” non-influential are represented by the staff of Agency on Regulation of Natural Monopolies. of the Electricity Power Sector Management in groups However there is a positive tendency: public associations will be involved in Kazakhstan the process of monitoring of monopolists services quality and rates approval, SUMMARY TABLE indicators on “Regulatory and «Consumer Calculator» is already placed on the official website of the Process” of electricity sector management of agency, and information on investment programs of subjects of natural mo- Kazakhstan nopolies is provided. Table of evaluation of “Regulatory Process” indicators of the electricity sector governance in Representation Kazakhstan of executive Employees of the following spheres do not take part in the tariff approval No SUMMARY TABLE of indicators on the evaluation branch for social process: health care and social protection. of ecological and social aspects of the development Kazakhstan’s electrical power sector management TABLE OF INDICATORS on the evaluation of ecological and social aspects of Kazakhstan’s electricity sector management FILLED PROJECT INDICATORS REGULATORY PROCESS INDICATORS

203 TABLE OF CONTENT DETAILED EXPLANATION Section 1. HISTORY AND CURRENT STATUS OF ELECTRIC POWER INDUSTRY EVALUATION DECISION ҚАЗАҚША Section 2. DEVELOPMENT OBJECTIVES Section 3. MAIN PRINCIPLES AND STRATEGIES FOR ELECTRIC POWER INDUSTRY Evaluation not applicable / Not evaluated DEVELOPMENT IN THE REPUBLIC OF KAZAKHSTAN Reporting or activity meets none of the quality elements “Low” Section 4. “TRANSPARENT TARIFF” CIVIL РУССКИЙ INITIATIVE: CONTENT AND WAYS OF Reporting or activity meets one quality element “Low to Average” IMPLEMENTATION Reporting or activity meets two quality elements “Average” BASIC QUESTIONNAIRE ON INDICATORS Reporting or activity meets three quality elements “Average to High” ENGLISH

204 TABLE OF CONTENT RP 23 Section 1. HISTORY AND CURRENT STATUS OF CREATION OF THE ABILITY OF NON-INFLUENTIAL PARTIES PARTICIPATING IN ELECTRIC POWER INDUSTRY REGULATORY PROCESS. INFORMATION IS ORIENTED TO PARTIES LEAST INVOLVED ҚАЗАҚША Section 2. DEVELOPMENT OBJECTIVES IN THE PROCESS Section 3. MAIN PRINCIPLES AND STRATEGIES FOR ELECTRIC POWER INDUSTRY Quality Ele- Indica- DEVELOPMENT IN THE REPUBLIC OF Explanation KAZAKHSTAN ments tor

Section 4. “TRANSPARENT TARIFF” CIVIL РУССКИЙ INITIATIVE: The agency of regulation of natural monopolies of RK publishes information CONTENT AND WAYS OF IMPLEMENTATION about the situation of the power supply sector on web sites and in mass media;, however the character of the data is highly specialized and not focused BASIC QUESTIONNAIRE ON INDICATORS on ordinary inhabitants of the country. Only a knowledgeable person can

understand its terminology and engineering formulas. Most citizens of the ENGLISH country are not well-informed about procedures of tariff setting, and that is SUMMARY TABLE of selected indicators of why they can’t objectively estimate, whether all procedures were observed “Electricity Governance Initiative” program while stating new tariffs. The information is even less available to social- SUMMARY TABLE Indicators on the “Political ly isolated groups of the population which don’t have basic knowledge in Process” of Management of the Electricity Power the field of power supplies, but also, have no access to information sources. Sector in Kazakhstan Though now, the Agency undertakes measures for informing the population TABLE OF INDICATORS on “Political Process” about the most important decisions accepted in the sphere of energy supply. of the Electricity Power Sector Management in Kazakhstan On the official site of the agency «the Consumer Calculator «was specially introduced , and also information on investment programs of subjects of SUMMARY TABLE indicators on “Regulatory natural monopolies and their execution, press tours, «round tables», public Process” of electricity sector management of Information is Kazakhstan oriented to par- hearings and meetings, briefings which are carried out and the reception of citizens are provided. Memorandums are signed on cooperation between Table of evaluation of “Regulatory Process” ties least in- No indicators of the electricity sector governance in volved in the the Agency and National Economic Chamber of Kazakhstan «the Atameken Kazakhstan process Union» and also with national public association «National League of Con- sumers». Informing consumers about tariff changes by means of general cov- SUMMARY TABLE of indicators on the evaluation of ecological and social aspects of the erage is adopted: on television, in newspapers, on accounts, in receipts, and Kazakhstan’s electrical power sector management for subjects of low power in rural areas – in places of mass congestion of TABLE OF INDICATORS on the evaluation of people. Moreover, participants of hearings would consist not only of work- ecological and social aspects of Kazakhstan’s ers of the monopolist, for whom now restrictions exist for seven persons. In electricity sector management order that these norms work, it is suggested to make officials of monopolists FILLED PROJECT INDICATORS responsible by imposing a penalty on them. REGULATORY PROCESS INDICATORS The regulatory organs should also work in creating civil versions of official documents and news items. Any data concerning interests of the public have to be available to each member of the society, regardless of their education level, prosperity and the existence or lack of interest in the power supply sector. Informing of the population has to be carried out with the use of all types of mass media and new technologies: newspapers, television and social networks.

205 TABLE OF CONTENT The regulatory organs conduct seminars on the basic system and training for Section 1. HISTORY AND CURRENT STATUS OF ELECTRIC POWER INDUSTRY representatives of the industrial and power enterprises as well as the staff of Support for non- ҚАЗАҚША the departments and regional governments. Training seminars for the popu- Section 2. DEVELOPMENT OBJECTIVES influential par- lation concerning power supply and energy saving do absolutely not take Section 3. MAIN PRINCIPLES AND STRATEGIES ties working on FOR ELECTRIC POWER INDUSTRY No place, thus, citizens are not involved in decision-making process and haven’t their indepen- DEVELOPMENT IN THE REPUBLIC OF the opportunity to increase their professionalism and level of competence KAZAKHSTAN dent representa- in the specified questions. For ensuring independent representation of non- Section 4. “TRANSPARENT TARIFF” CIVIL tion РУССКИЙ INITIATIVE: influential parties at the government level on questions of power supply, it CONTENT AND WAYS OF is necessary to train them. IMPLEMENTATION UNFOLDED EXPLANATION BASIC QUESTIONNAIRE ON INDICATORS ENGLISH ESTIMATION SELECTION SUMMARY TABLE of selected indicators of “Electricity Governance Initiative” program The estimation is not applicable/Absence of estimation SUMMARY TABLE Indicators on the “Political Process” of Management of the Electricity Power The reporting or activity meets none of the quality elements “Low” Sector in Kazakhstan The reporting or activity meets to one quality element “Low”-Medium TABLE OF INDICATORS on “Political Process” of the Electricity Power Sector Management in Kazakhstan The reporting or activity meets to two quality elements “Average” SUMMARY TABLE indicators on “Regulatory Process” of electricity sector management of The reporting or activity meets to three quality elements “Average to High” Kazakhstan Table of evaluation of “Regulatory Process” The reporting or activity meets to all quality elements “High” indicators of the electricity sector governance in Kazakhstan Researcher name and organization: Sergey Belov, IPO “Active youth MSE” SUMMARY TABLE of indicators on the evaluation of ecological and social aspects of the The source of information: information from the Agency on regulation of natural monopolies of RK, Ministry Kazakhstan’s electrical power sector management of the industry and RK new technologies. TABLE OF INDICATORS on the evaluation of ecological and social aspects of Kazakhstan’s electricity sector management FILLED PROJECT INDICATORS REGULATORY PROCESS INDICATORS

206 TABLE OF CONTENT RP 24 Section 1. HISTORY AND CURRENT STATUS OF INTERFERENCE OF CIVIL SOCIETY IN REGULATORY PROCESS ELECTRIC POWER INDUSTRY ҚАЗАҚША Quality Ele- Indica- Section 2. DEVELOPMENT OBJECTIVES Explanation Section 3. MAIN PRINCIPLES AND STRATEGIES ments tor FOR ELECTRIC POWER INDUSTRY DEVELOPMENT IN THE REPUBLIC OF KAZAKHSTAN Nowadays the main efforts of non-governmental organizations working in this direction are tied to promoting the management initiative of power sup- Section 4. “TRANSPARENT TARIFF” CIVIL РУССКИЙ INITIATIVE: ply. Representatives of civil society are engaged in analytical work (estimat- CONTENT AND WAYS OF Number of or- ing transparency level in sector) and information and propaganda activity, IMPLEMENTATION ganizations in- which is directed towards involvement of the population in regulatory pro- Yes volved in civil cess. All offers and recommendations of public associations are associated BASIC QUESTIONNAIRE ON INDICATORS

society with specifc questions. In oder to obtain information on the nature of inter- ENGLISH action of society and regional Departments of Agency on regulation of natu- SUMMARY TABLE of selected indicators of ral monopolies, official requests were sent to local authorities. Presently no “Electricity Governance Initiative” program answers have been received yet. SUMMARY TABLE Indicators on the “Political Process” of Management of the Electricity Power As yet not all ideas of NGO staff are supported by government bodies: in the Sector in Kazakhstan last two years there wasn’t a single registry of a business consumer or group/ organization of civil society, which has engaged changes of standards, legal TABLE OF INDICATORS on “Political Process” The nature of of the Electricity Power Sector Management in No bassis or principles of work of a regulatory organ. To obtain information on given affairs Kazakhstan the nature of interaction ofbetween society and regional Departments of SUMMARY TABLE indicators on “Regulatory Agency on regulation of natural monopolies, official requests were sent to Process” of electricity sector management of local authorities. Presently no answers have been received as yet. Kazakhstan Table of evaluation of “Regulatory Process” Approximate number of organizations, periodically or constantly working on indicators of the electricity sector governance in Number of given problems of energy supply sector. A number of NGO’s united in coalitions. No Kazakhstan affairs Thus in the near future NGO’s will take part in monitoring quality of services SUMMARY TABLE of indicators on the evaluation of monopolists and the process of announcing tariffs. of ecological and social aspects of the Kazakhstan’s electrical power sector management TABLE OF INDICATORS on the evaluation of ecological and social aspects of Kazakhstan’s electricity sector management FILLED PROJECT INDICATORS REGULATORY PROCESS INDICATORS

207 TABLE OF CONTENT UNFOLDED EXPLANATION Section 1. HISTORY AND CURRENT STATUS OF ELECTRIC POWER INDUSTRY ESTIMATION SELECTION ҚАЗАҚША Section 2. DEVELOPMENT OBJECTIVES Section 3. MAIN PRINCIPLES AND STRATEGIES FOR ELECTRIC POWER INDUSTRY An estimation is not applicable/Absence of estimation DEVELOPMENT IN THE REPUBLIC OF KAZAKHSTAN The reporting or activity meets none of the quality elements “Low” Section 4. “TRANSPARENT TARIFF” CIVIL РУССКИЙ INITIATIVE: CONTENT AND WAYS OF The reporting or activity meets to one quality element “Low”-Medium IMPLEMENTATION The reporting or activity meets to two quality elements “Average” BASIC QUESTIONNAIRE ON INDICATORS The reporting or activity meets to three quality elements “Average to High” ENGLISH

SUMMARY TABLE of selected indicators of “Electricity Governance Initiative” program The reporting or activity meets to all quality elements “High” SUMMARY TABLE Indicators on the “Political Process” of Management of the Electricity Power Researcher name and organization: Sergey Belov, IPO “Active youth MSE” Sector in Kazakhstan The source of information: data of Agency on regulation of natural monopolies of RK, Ministry of the industry TABLE OF INDICATORS on “Political Process” of the Electricity Power Sector Management in and RK new technologies. Kazakhstan SUMMARY TABLE indicators on “Regulatory Process” of electricity sector management of Kazakhstan Table of evaluation of “Regulatory Process” indicators of the electricity sector governance in Kazakhstan SUMMARY TABLE of indicators on the evaluation of ecological and social aspects of the Kazakhstan’s electrical power sector management TABLE OF INDICATORS on the evaluation of ecological and social aspects of Kazakhstan’s electricity sector management FILLED PROJECT INDICATORS REGULATORY PROCESS INDICATORS

208 TABLE OF CONTENT RP 25 Section 1. HISTORY AND CURRENT STATUS OF COMMITMENT OF THE SUPPLIER OF ELECTRIC POWER TO ORGANIZATIONS OF CIVIL ELECTRIC POWER INDUSTRY SOCIETY AND POTENTIALLY AFFECTED POPULATION ҚАЗАҚША Section 2. DEVELOPMENT OBJECTIVES Quality Ele- Indica- Section 3. MAIN PRINCIPLES AND STRATEGIES Explanation FOR ELECTRIC POWER INDUSTRY ments tor DEVELOPMENT IN THE REPUBLIC OF KAZAKHSTAN

Section 4. “TRANSPARENT TARIFF” CIVIL In regions, control of activity of suppliers of the electric power is exercised by РУССКИЙ INITIATIVE: the Departments of Agency on regulation of natural monopolies. They watch CONTENT AND WAYS OF IMPLEMENTATION for legality of process when statements of new tariffs are provided while carrying out public hearings with the participation of consumers and other BASIC QUESTIONNAIRE ON INDICATORS interested parties. And before these public hearings are carried out, invita-

tions also take place to participate in them on АRЕМ’s official site. However ENGLISH Assigned De- Yes carrying out public discussions is a just the formal aspect: public indigna- partment SUMMARY TABLE of selected indicators of tions and recommendations in most cases are not reflected in legal acts “Electricity Governance Initiative” program and the principal activity of the regulator. The only thing inculcated, on the SUMMARY TABLE Indicators on the “Political Agency site is «the Consumer Calculator «, and the information placed about Process” of Management of the Electricity Power investment programs of subjects of natural monopolies and their execution. Sector in Kazakhstan Such information gives at least a general concept about activity of suppliers TABLE OF INDICATORS on “Political Process” of electric power. of the Electricity Power Sector Management in Kazakhstan The obligations Corporate policy does not include responsibility before local community for SUMMARY TABLE indicators on “Regulatory of association the majority of power companies. For monopolists it is important to make Process” of electricity sector management of are addressed No a profit, by strictly following the legislation and giving priority only to the Kazakhstan by corporate interests of the company. The opinion of the population in most cases is not Table of evaluation of “Regulatory Process” politics interesting for power supplying enterprises. indicators of the electricity sector governance in Kazakhstan Establishment In practice independent power companies don’t create consulting groups, in SUMMARY TABLE of indicators on the evaluation and work of ad- No most cases they enter in an already created association for upholding their of ecological and social aspects of the Kazakhstan’s electrical power sector management visory groups interests and distributing the necessary information about themselves.

TABLE OF INDICATORS on the evaluation of Power companies don’t carry out any support for non-influential groups: for ecological and social aspects of Kazakhstan’s electricity sector management Support of monopolists it is better to keep the public in the dark and ignorance and to non-influential No constrain, thus, any social tensions. In this regard suppliers of the electric FILLED PROJECT INDICATORS groups power don’t help citizens, which need it either in the form of reduced rates, REGULATORY PROCESS INDICATORS or in the form of the training and education.

Information on groups making Yes Creating opportunities to file claims electronically. claims

209 TABLE OF CONTENT DETAILED EXPLANATION Section 1. HISTORY AND CURRENT STATUS OF ELECTRIC POWER INDUSTRY ESTIMATION SELECTION ҚАЗАҚША Section 2. DEVELOPMENT OBJECTIVES Section 3. MAIN PRINCIPLES AND STRATEGIES FOR ELECTRIC POWER INDUSTRY An estimation is not applicable/Absence of estimation DEVELOPMENT IN THE REPUBLIC OF KAZAKHSTAN The reporting or activity meets none of the quality elements “Low” Section 4. “TRANSPARENT TARIFF” CIVIL РУССКИЙ INITIATIVE: CONTENT AND WAYS OF The reporting or activity meets to one quality element “Low to Average” IMPLEMENTATION The reporting or activity meets to two quality elements “Average” BASIC QUESTIONNAIRE ON INDICATORS The reporting or activity meets to three quality elements “Average to High” ENGLISH

SUMMARY TABLE of selected indicators of “Electricity Governance Initiative” program The reporting or activity meets to all quality elements “High” SUMMARY TABLE Indicators on the “Political Process” of Management of the Electricity Power Researcher name and organization: Sergey Belov, IPO “Active youth of the NKD” Sector in Kazakhstan The source of information: data of Agency on regulation of natural monopolies of RK, Ministry of the industry TABLE OF INDICATORS on “Political Process” of the Electricity Power Sector Management in and RK new technologies. Kazakhstan SUMMARY TABLE indicators on “Regulatory Process” of electricity sector management of Kazakhstan Table of evaluation of “Regulatory Process” indicators of the electricity sector governance in Kazakhstan SUMMARY TABLE of indicators on the evaluation of ecological and social aspects of the Kazakhstan’s electrical power sector management TABLE OF INDICATORS on the evaluation of ecological and social aspects of Kazakhstan’s electricity sector management FILLED PROJECT INDICATORS REGULATORY PROCESS INDICATORS

210 TABLE OF CONTENT RP 26 Section 1. HISTORY AND CURRENT STATUS OF ORDERS AND DECISIONS OF REGULATORY BODY ELECTRIC POWER INDUSTRY ҚАЗАҚША Quality Ele- Indica- Section 2. DEVELOPMENT OBJECTIVES Explanation Section 3. MAIN PRINCIPLES AND STRATEGIES ments tor FOR ELECTRIC POWER INDUSTRY DEVELOPMENT IN THE REPUBLIC OF KAZAKHSTAN The analysis of the position of Agency on regulation of natural monopolies of RK obliges the government body to give reasonable orders and answers Section 4. “TRANSPARENT TARIFF” CIVIL РУССКИЙ INITIATIVE: to public comments or objections: “2) to carry out public hearings concerning CONTENT AND WAYS OF the change in price for production (works, services) by natural monopolists” IMPLEMENTATION (Article 12, point 2 of Provision). However quality of orders and the justifications provided by the regulatory organ, raise doubts. Texts of orders con- BASIC QUESTIONNAIRE ON INDICATORS

tain only references of legal acts on the basis of which the documents were ENGLISH made, the approval of standards or actions, and also definition of responsible SUMMARY TABLE of selected indicators of government bodies for the execution of orders. Especially indicative in this “Electricity Governance Initiative” program sense is the order “About the Adoption of Standard Technical Losses of Elec- SUMMARY TABLE Indicators on the “Political tric Energy in Electric Networks of the Limited Liability Company of “Kok- Process” of Management of the Electricity Power shetau Energo” in 2016. A more substantial and moderately reasonable Order Sector in Kazakhstan is “About Modification in the Order of the Chairman of Agency of the Republic TABLE OF INDICATORS on “Political Process” of Kazakhstan on Regulation of Natural Monopolies and Protection of the of the Electricity Power Sector Management in Legal require- Competition dated November 5, 2003 No. 263-OD “ and “About Rules of the Kazakhstan ments about statement of temporary decrease of tariff coefficients (to the prices, collec- SUMMARY TABLE indicators on “Regulatory including expla- Yes tion rates) on adjustable services of airports and air navigation”. It contains Process” of electricity sector management of nations / rea- not only a dry description of the sequence of actions of responsible persons, Kazakhstan sons for orders but also an indication of the reasons of this or that decision and the descrip- Table of evaluation of “Regulatory Process” tion of mechanisms of approval of standards and coefficients.” 1. Rules for indicators of the electricity sector governance in the statement of temporary decrease of tariff coefficients (to the prices, col- Kazakhstan lection rates) on adjustable services of airports and air navigation (further SUMMARY TABLE of indicators on the evaluation – Rules) are developed according to the Convention on international civil of ecological and social aspects of the Kazakhstan’s electrical power sector management aviation (Chicago 1944), which was ratified by the resolution of the Supreme Council of the Republic of Kazakhstan on July 2, 1992 and Laws of the Re- TABLE OF INDICATORS on the evaluation of public of Kazakhstan dated July 9, 1998 “About natural monopolies and con- ecological and social aspects of Kazakhstan’s electricity sector management trolled markets”, dated July 15, 2010 “About use of air space of the Republic of Kazakhstan and aircraft activity”; 10 . Assertion of temporary decreasing FILLED PROJECT INDICATORS of coefficients is made by the Authorized Body representating the operator REGULATORY PROCESS INDICATORS of aircrafts, the airport or the air navigation organization (further – the applicant); the demand and approval documents according to Annex 1 to these Rules observing following requirements: each sheet of approval documents is signed by the director, and financial documents – by the chief accountant.

211 TABLE OF CONTENT The facsimile signature is considered invalid; actual data are submitted Section 1. HISTORY AND CURRENT STATUS OF ELECTRIC POWER INDUSTRY along with results of financial and economic activity for the previous pe- ҚАЗАҚША Section 2. DEVELOPMENT OBJECTIVES riod, and also expected results after application of temporary decreasing of coefficients for the required period of their assertion. Thus, the aircraft Section 3. MAIN PRINCIPLES AND STRATEGIES FOR ELECTRIC POWER INDUSTRY operator submits to the Authorized Body the request and approval docu- DEVELOPMENT IN THE REPUBLIC OF ments in duplicate». An Order that absolutely wasn’t reasonable “About the as- KAZAKHSTAN sertion of quarterly forms of information concerning market control about ex- Section 4. “TRANSPARENT TARIFF” CIVIL РУССКИЙ INITIATIVE: ecution or non-execution of the investment program (project), which took into CONTENT AND WAYS OF account a price limit”. The document contains only a number of instructions IMPLEMENTATION to responsible persons and describes the date of entering the order into legal force. Justification of adoption of the document and the description of BASIC QUESTIONNAIRE ON INDICATORS expediency of introduction of forms of quarterly information are absent. The analysis of these three orders of regulatory organ – Agency on regulation ENGLISH SUMMARY TABLE of selected indicators of of natural monopolies of RK – showed a lack of justification in the texts of “Electricity Governance Initiative” program these legal acts and formalism at the description of actions of responsible persons. Though Programs, Plans and Laws to which authors of these orders SUMMARY TABLE Indicators on the “Political Process” of Management of the Electricity Power allude at while writing the documents contain justifications and analytical Sector in Kazakhstan notes, giving a chance to track relationship of cause and effect between the TABLE OF INDICATORS on “Political Process” decision made and its prerequisites, on the Peter and Paul plant of heavy of the Electricity Power Sector Management in mechanical engineering – 6.76 million kWh. In a money equivalent this is Kazakhstan following: 160 billion KZT and 27.7 million KZT respectively). As a result there SUMMARY TABLE indicators on “Regulatory folded a complete bright picture which shows expediency and temporary Process” of electricity sector management of relevance of the Law. Kazakhstan Table of evaluation of “Regulatory Process” In order to improve legislation Agency on regulation of natural monopolies indicators of the electricity sector governance in carried out an analysis of 80 legal acts, 17 of which are optimized down to Kazakhstan Quality of the three, and 13 laws and regulations and 16 methods out of 40 are deleted. As Yes SUMMARY TABLE of indicators on the evaluation practice a result more than 200 amendments have been developed, providing an in- of ecological and social aspects of the crease of transparency in setting tariffs, quality of adjustable services, coun- Kazakhstan’s electrical power sector management teraction of corruption and strengthening of control. TABLE OF INDICATORS on the evaluation of ecological and social aspects of Kazakhstan’s electricity sector management FILLED PROJECT INDICATORS REGULATORY PROCESS INDICATORS

212 TABLE OF CONTENT UNFOLDED EXPLANATION Section 1. HISTORY AND CURRENT STATUS OF ELECTRIC POWER INDUSTRY ESTIMATION SELECTION ҚАЗАҚША Section 2. DEVELOPMENT OBJECTIVES Section 3. MAIN PRINCIPLES AND STRATEGIES FOR ELECTRIC POWER INDUSTRY An estimation is not applicable/Absence of estimation DEVELOPMENT IN THE REPUBLIC OF KAZAKHSTAN The reporting or activity meets none of the quality elements “Low” Section 4. “TRANSPARENT TARIFF” CIVIL РУССКИЙ INITIATIVE: CONTENT AND WAYS OF The reporting or activity meets to one quality element “Low to Average” IMPLEMENTATION The reporting or activity meets to two quality elements “Average” BASIC QUESTIONNAIRE ON INDICATORS The reporting or activity meets to three quality elements “Average to High” ENGLISH

SUMMARY TABLE of selected indicators of “Electricity Governance Initiative” program The reporting or activity meets to all quality elements “High” SUMMARY TABLE Indicators on the “Political Process” of Management of the Electricity Power Researcher name and organization: Sergey Belov, IPO “Active youth of the NKD” Sector in Kazakhstan The source of information: data of Agency on regulation of natural monopolies of the RK, Ministry of the in- TABLE OF INDICATORS on “Political Process” of the Electricity Power Sector Management in dustry and new technologies of the RK. Kazakhstan SUMMARY TABLE indicators on “Regulatory Process” of electricity sector management of Kazakhstan Table of evaluation of “Regulatory Process” indicators of the electricity sector governance in Kazakhstan SUMMARY TABLE of indicators on the evaluation of ecological and social aspects of the Kazakhstan’s electrical power sector management TABLE OF INDICATORS on the evaluation of ecological and social aspects of Kazakhstan’s electricity sector management FILLED PROJECT INDICATORS REGULATORY PROCESS INDICATORS

213 TABLE OF CONTENT RP 27 Section 1. HISTORY AND CURRENT STATUS OF DISTRIBUTION OF DECISIONS ELECTRIC POWER INDUSTRY ҚАЗАҚША Quality Ele- Indica- Section 2. DEVELOPMENT OBJECTIVES Explanation Section 3. MAIN PRINCIPLES AND STRATEGIES ments tor FOR ELECTRIC POWER INDUSTRY DEVELOPMENT IN THE REPUBLIC OF Using multilateral ways of distribution. Help in understanding orders. The agency KAZAKHSTAN on regulation of natural monopolies of RK and the Ministry of Industry and New Section 4. “TRANSPARENT TARIFF” CIVIL РУССКИЙ INITIATIVE: Technologies publish information about the situation in power supply sector on CONTENT AND WAYS OF their web sites and in mass media; however character of data is mainly highly spe- IMPLEMENTATION cialized and not focused on ordinary inhabitants of the country. Only knowledgeable persons can understand the terminology and engineering formulas. The ma- BASIC QUESTIONNAIRE ON INDICATORS jority of the citizens of the country isn’t informed about tariff setting procedures and therefore can’t objectively estimate, whether all procedures were observed ENGLISH in the statement of new tariffs. The information is available even less for socially SUMMARY TABLE of selected indicators of “Electricity Governance Initiative” program isolated groups of the population which not only don’t have basic knowledge in the field of power supply, but also, as it happens, have no access to information SUMMARY TABLE Indicators on the “Political sources. In this regard regulatory organs need to work and create civil versions Process” of Management of the Electricity Power of official documents and news information. Any data concerning the interests Sector in Kazakhstan of the public have to be available to each member of the society, regardless of TABLE OF INDICATORS on “Political Process” education level, prosperity and existence or lack of interest in the power supply of the Electricity Power Sector Management in sector. Informing the population should be carried out by using all types of mass Kazakhstan media and new technologies: newspapers, television, social networks. For inform- 1. Easy avail- SUMMARY TABLE indicators on “Regulatory No ing citizens on the official web site of the agency «the Consumer Calculator» was ability Process” of electricity sector management of especially introduced, and information about investment programs of subjects of Kazakhstan natural monopolies and their execution has also been provided, and press tours, Table of evaluation of “Regulatory Process” «round tables», public hearings and meetings, briefings are carried out and re- indicators of the electricity sector governance in ception of citizens is conducted. Also memorandums of cooperation between the Kazakhstan Agency and National Economic Chamber of Kazakhstan «Atameken Union», and SUMMARY TABLE of indicators on the evaluation with national public association «National League of Consumers» were signed. of ecological and social aspects of the «At the same time we understand that there is a situation when public actions Kazakhstan’s electrical power sector management don’t bring the expected results because neither consumers, nor mass media pro- TABLE OF INDICATORS on the evaluation of fess interest in certain cases. All these factors give reason to strengthen our work ecological and social aspects of Kazakhstan’s and transition to being pro-active», – said Asylbek Duysebayev, the vice-chairman electricity sector management of the Agency. According to him, informing consumers on tariff changes should FILLED PROJECT INDICATORS be covered in whole: on television, in newspapers, on accounts, in receipts, and for subjects of low power in rural areas – in places of mass congestion of people. REGULATORY PROCESS INDICATORS Also participants of hearings shouldn’t just consist of workers of the monopolist, for whom now there is a restriction to seven persons. In order that these norms work, it is suggested officials of monopolists are made responsible by imposing penalties on them.

214 TABLE OF CONTENT All information published by regulatory organs, on their web sites and in Section 1. HISTORY AND CURRENT STATUS OF ELECTRIC POWER INDUSTRY 2. Timely avail- mass media is timely: invitations to public hearings are placed in advance, Yes ҚАЗАҚША Section 2. DEVELOPMENT OBJECTIVES ability within established periods; news articles are written right after carrying out the action or adopting any important decisions. Section 3. MAIN PRINCIPLES AND STRATEGIES FOR ELECTRIC POWER INDUSTRY DEVELOPMENT IN THE REPUBLIC OF All information regarding power supply, according to the legislation of the KAZAKHSTAN 3. Local lan- Yes Republic of Kazakhstan is published in two languages: in the state language: Section 4. “TRANSPARENT TARIFF” CIVIL guage РУССКИЙ INITIATIVE: Kazakh and in the official language of communication – Russian. CONTENT AND WAYS OF IMPLEMENTATION Informing he public must be carried out by using all types of mass media and new technologies: newspapers, television, social networks. For informing BASIC QUESTIONNAIRE ON INDICATORS 4. Use of multi- citizens «the Consumer Calculator» was specially introduced on the official ENGLISH lateral methods Yes web site of the agency, as well as information about investment programs SUMMARY TABLE of selected indicators of of distribution of subjects of natural monopolies and their execution, press tours, «round “Electricity Governance Initiative” program tables», public hearings and meetings, briefings are carried out, the reception SUMMARY TABLE Indicators on the “Political of citizens has been placed. Process” of Management of the Electricity Power Sector in Kazakhstan 5. Help in un- TABLE OF INDICATORS on “Political Process” derstanding of No of the Electricity Power Sector Management in orders Kazakhstan SUMMARY TABLE indicators on “Regulatory DETAILED EXPLANATION Process” of electricity sector management of Kazakhstan ESTIMATION SELECTION Table of evaluation of “Regulatory Process” indicators of the electricity sector governance in An estimation is not applicable/Absence of estimation Kazakhstan SUMMARY TABLE of indicators on the evaluation The reporting or activity meets none of the quality elements “Low” of ecological and social aspects of the Kazakhstan’s electrical power sector management The reporting or activity meets to one quality element “Low to Average” TABLE OF INDICATORS on the evaluation of ecological and social aspects of Kazakhstan’s The reporting or activity meets to two quality elements “Average” electricity sector management FILLED PROJECT INDICATORS The reporting or activity meets to three quality elements “Average to High” REGULATORY PROCESS INDICATORS The reporting or activity meets to all quality elements “High”

Researcher name and organization: Sergey Belov, IPO “Active youth MSE” The source of information: data of Agency on regulation of natural monopolies of RK, Ministry of the industry and RK new technologies.

215 TABLE OF CONTENT RP 28 Section 1. HISTORY AND CURRENT STATUS OF THE PHILOSOPHY OF TARIFFS ELECTRIC POWER INDUSTRY ҚАЗАҚША Quality Ele- Indica- Section 2. DEVELOPMENT OBJECTIVES Explanation Section 3. MAIN PRINCIPLES AND STRATEGIES ments tor FOR ELECTRIC POWER INDUSTRY DEVELOPMENT IN THE REPUBLIC OF KAZAKHSTAN The agency of the Republic of Kazakhstan on regulation of natural monopolies (hereinafter referred to as Agency) is the government body of the Re- Section 4. “TRANSPARENT TARIFF” CIVIL РУССКИЙ INITIATIVE: public of Kazakhstan managing the sphere of regulation and controlling the CONTENT AND WAYS OF spheres of natural monopolies and controlled markets, except spheres of the IMPLEMENTATION field of telecommunications and mail service, according to the legislation Detailed analy- of the Republic of Kazakhstan, and also control and regulate the activity of BASIC QUESTIONNAIRE ON INDICATORS No

sis the power generating and power supplying organizations according to the ENGLISH Law of the Republic of Kazakhstan «About power industry; The agency car- SUMMARY TABLE of selected indicators of ries out its activity according to the Constitution and Laws of the Republic “Electricity Governance Initiative” program of Kazakhstan, decrees of the President and the Government of the Republic SUMMARY TABLE Indicators on the “Political of Kazakhstan, as well as other regulations, and the Provision approved by Process” of Management of the Electricity Power Government Resolution dated 20.12.2012. Sector in Kazakhstan TABLE OF INDICATORS on “Political Process” In compliance with the approved Regulations of AREM RK, the Regulations of the Electricity Power Sector Management in of the RK Agency on regulating natural monopolies, approved by the Govern- Kazakhstan ment Regulation dated 20.12.2012. No. 1817, the paragraphs 3, 4, Article 14, SUMMARY TABLE indicators on “Regulatory protection of the rights and ensuring balance of interests between consum- Process” of electricity sector management of Mitigating seri- ers are considered. 3) protection of the rights of consumers in the sphere of Kazakhstan Yes ous impact implementation activities of subjects of natural monopolies; Table of evaluation of “Regulatory Process” indicators of the electricity sector governance in 4) ensuring the balance of interests between consumers and service provid- Kazakhstan ers in the spheres (branches) of public administration, which are under the SUMMARY TABLE of indicators on the evaluation authority of the Agency on nomenclature, established by the Government of of ecological and social aspects of the the Republic of Kazakhstan. Kazakhstan’s electrical power sector management TABLE OF INDICATORS on the evaluation of The tariff policy (tariff setting) is available to the public, on a regulated site, Easy to under- but the public has no concept of such production and electric power transfer. ecological and social aspects of Kazakhstan’s Yes electricity sector management stand Final price of electricity is more clearly understood. The principles of calcu- FILLED PROJECT INDICATORS lating tariffs for the population are hard to understand.

REGULATORY PROCESS INDICATORS The last tariffs In 2013, in 14 Regions prices changed nearly for 99 thousand/kWh. The main reflect the phi- reason for tariff increase on e/e is the tariff increase at stations of 40 to 80 Yes losophy / prin- thousand/kWh. In truth the last tariffs reflect the philosophy of tariffs/ principles ciples.

216 TABLE OF CONTENT DETAILED EXPLANATION: Tariffs reflect the overall cost of production, transfer and supply of electric en- Section 1. HISTORY AND CURRENT STATUS OF ELECTRIC POWER INDUSTRY ergy according to the tariff estimate. The tariff policy is accepted as is (via released document) and takes into ҚАЗАҚША Section 2. DEVELOPMENT OBJECTIVES account economic and social issues. The document is generally available for public viewing in the tariff calculation section though the public doesn’t participate in the discussion of tariffs for energy carriers. More often Section 3. MAIN PRINCIPLES AND STRATEGIES FOR ELECTRIC POWER INDUSTRY it is attracted by decisions already made. Under the approved RK AREM Statute of the Agency RK on regulation DEVELOPMENT IN THE REPUBLIC OF KAZAKHSTAN of natural monopolies, approved by Governmental Decision 20.12.2012 number 1817 i.i.3,4 ch.14 protection of the rights and ensuring balance of interests between consumers is considered. Protection of the rights of Section 4. “TRANSPARENT TARIFF” CIVIL РУССКИЙ INITIATIVE: consumers in the sphere of implementation of activities of subjects of natural monopolies; CONTENT AND WAYS OF IMPLEMENTATION Ensuring balance of interests between consumers and service providers in the spheres (branches) of public administration, which are under the authority of Agency on nomenclature, established by the Government of BASIC QUESTIONNAIRE ON INDICATORS the Republic of Kazakhstan. ENGLISH UNFOLDED EXPLANATION SUMMARY TABLE of selected indicators of “Electricity Governance Initiative” program ESTIMATION SELECTION SUMMARY TABLE Indicators on the “Political Process” of Management of the Electricity Power An estimation is not applicable/Absence of estimation Sector in Kazakhstan TABLE OF INDICATORS on “Political Process” The reporting or activity meets none of the quality elements “Low” of the Electricity Power Sector Management in Kazakhstan The reporting or activity meets to one quality element “Low to Average” SUMMARY TABLE indicators on “Regulatory Process” of electricity sector management of The reporting or activity meets to two quality elements “Average” Kazakhstan Table of evaluation of “Regulatory Process” The reporting or activity meets to three quality elements “Average to High” indicators of the electricity sector governance in Kazakhstan The reporting or activity meets to all quality elements “High” SUMMARY TABLE of indicators on the evaluation of ecological and social aspects of the Kazakhstan’s electrical power sector management Researcher name and organization: Sara Espenova, PF “KAMEDA” TABLE OF INDICATORS on the evaluation of www.arem.gov.kz, targeted questioning of Astana inhabitants (40 persons). Ad- ecological and social aspects of Kazakhstan’s The source of information: electricity sector management ditional information: The letter № 30 was sent to АRЕМ RК addressed to the chairman of Agency, dated 11.09.2013, it has not been answered. FILLED PROJECT INDICATORS REGULATORY PROCESS INDICATORS

217 TABLE OF CONTENT RP 29 Section 1. HISTORY AND CURRENT STATUS OF PARTICIPATION IN DECISION-MAKING REGARDING AFFORDABILITY OF ELECTRIC POWER INDUSTRY ELECTRICITY PRICES ҚАЗАҚША Section 2. DEVELOPMENT OBJECTIVES Quality Ele- Indica- Section 3. MAIN PRINCIPLES AND STRATEGIES Explanation FOR ELECTRIC POWER INDUSTRY ments tor DEVELOPMENT IN THE REPUBLIC OF KAZAKHSTAN

Section 4. “TRANSPARENT TARIFF” CIVIL In accordance with the amendments of the «Rules of differentiation supply- РУССКИЙ INITIATIVE: ing organizations tariffs for electricity by time zones and (or) depending on CONTENT AND WAYS OF IMPLEMENTATION Attention to the volume of consumption of private individuals», approved by Order of the question of af- President RK AREM dated April 1, 2012 separate consumption values shall Yes BASIC QUESTIONNAIRE ON INDICATORS fordability in the be introduced for retirees living alone, disabled persons, war veterans and

tariff principles persons related to them, and equally to inhabitants of houses without cen- ENGLISH tralized hot water supply and inhabitants areas without installed gas and to SUMMARY TABLE of selected indicators of the persons using electric stoves in all regions of Kazakhstan. “Electricity Governance Initiative” program SUMMARY TABLE Indicators on the “Political According to the Art. 14-1, p. 4 of the Natural Monopolies and Controlled Mar- Process” of Management of the Electricity Power kets Act of the Republic of Kazakhstan dated July 9, 1998, Authorized Body Sector in Kazakhstan is responsible for carrying out public hearings when considering demands TABLE OF INDICATORS on “Political Process” from subjects of natural monopolies for the assertion of tariffs (prices, rates of the Electricity Power Sector Management in of fees) or their limits; According to art. 15-2 «An order of assertion of a tariff Kazakhstan via application of method of comparative analysis» the Authorized bBdy is SUMMARY TABLE indicators on “Regulatory obliged to publish in periodic journals information on the date and a venue Process” of electricity sector management of of public hearings for the assertion of tariffs not later than ten calendar days Kazakhstan Participation before carrying out public hearings. Table of evaluation of “Regulatory Process” of the public in Yes indicators of the electricity sector governance in revisions According to the resolution «On the approval of Rules of carrying out pub- Kazakhstan lic hearings for consideration of demands for the assertion of tariffs (prices, SUMMARY TABLE of indicators on the evaluation rates of fees) or their limits on adjustable services (goods, works) for subjects of ecological and social aspects of the of natural monopolies», Art. 1, p. 3, of the government of the Republic of Ka- Kazakhstan’s electrical power sector management zakhstan dated April 21, 2003 «public hearing is a procedure of discussion TABLE OF INDICATORS on the evaluation of of tariff projects (price, rate of fees) or its limit on adjustable services (goods, ecological and social aspects of Kazakhstan’s works) for the subject of natural monopoly by an invitation of deputies, rep- electricity sector management resentatives of government bodies, consumers and their public associations, FILLED PROJECT INDICATORS the mass media, independent experts and subjects of natural monopolies». REGULATORY PROCESS INDICATORS

218 TABLE OF CONTENT Examples of explanations through the media: Section 1. HISTORY AND CURRENT STATUS OF ELECTRIC POWER INDUSTRY http://www.astanaenergosbyt.kz/news?id=77, http://www.alseco.kz/upload/ ҚАЗАҚША Section 2. DEVELOPMENT OBJECTIVES Tarify_2013.pdf, http://www.esalmaty.kz/index.php/en/rates-and-services/ Education of Section 3. MAIN PRINCIPLES AND STRATEGIES tariff-plans, http://www.atyrauenergo.kz/page.php?page_id=296, http://www. FOR ELECTRIC POWER INDUSTRY low-income Yes DEVELOPMENT IN THE REPUBLIC OF maek.kz/press-centry/arhiv-pressy/2013/too-abmaek-kazatomprombb-ra- groups KAZAKHSTAN zyasnyaet-nyneshnee-povyshenie-tarifov-na-elektroenergiyu, http://www. Section 4. “TRANSPARENT TARIFF” CIVIL РУССКИЙ INITIATIVE: czk.kz/magazine/91/105/, http://www.arem.kz/Question.aspx, CONTENT AND WAYS OF IMPLEMENTATION http://shygys.kz/rates/principles/

BASIC QUESTIONNAIRE ON INDICATORS DETAILED EXPLANATION: Public hearings are carried out according to the procedure established by the

Government of the Republic of Kazakhstan, not later than ten calendar days before taking decisions on the ENGLISH assertion of a tariff. According to Art. 17. «Order of consideration of projects of tariffs (prices, rates of fees) or SUMMARY TABLE of selected indicators of their maximum levels and tariff estimates» p. 2, the Authorized Body is obliged to place on its web site and “Electricity Governance Initiative” program publish in periodic printed journals information about the date and place of the public hearings: SUMMARY TABLE Indicators on the “Political Process” of Management of the Electricity Power 1) in the case of approval of tariffs (prices, rates of fees) or their limits on adjustable services (goods, works) Sector in Kazakhstan of a subject of natural monopoly according to the standard procedure not later than fifteen calendar days before; TABLE OF INDICATORS on “Political Process” of the Electricity Power Sector Management in 2) in the case of approval of tariffs (prices, rates of fees) on adjustable services (goods, works) of a subject of Kazakhstan natural monopoly according to paragraph 5 of Article 18 of this Law not later than seven calendar days SUMMARY TABLE indicators on “Regulatory before. Process” of electricity sector management of Kazakhstan Requirements of part one of this item does not extend to subjects of natural monopolies of low power on Table of evaluation of “Regulatory Process” statement of tariffs (prices, rates of fees) on adjustable services (goods, works). Public hearings are carried out indicators of the electricity sector governance in at the assertion: Kazakhstan 1) limits of tariffs (the prices, rates of fees) on adjustable services (goods, works) for the subject of natural SUMMARY TABLE of indicators on the evaluation monopoly not later than in thirty calendar days prior to taking the decision of their assertion ; of ecological and social aspects of the Kazakhstan’s electrical power sector management 2) tariffs (prices, rates of fees) on adjustable services (goods, works) for the subject of natural monopoly not TABLE OF INDICATORS on the evaluation of later than fifteen calendar days before taking the decision of their assertion; ecological and social aspects of Kazakhstan’s 3) tariffs (prices, rates of fees) on adjustable services (goods, works) for the subject of natural monopoly electricity sector management according to point 5 of Article 18 of the present Law not later than seven calendar days before taking the FILLED PROJECT INDICATORS decision of their assertion; REGULATORY PROCESS INDICATORS 4) tariffs (prices, rates of fees) on adjustable services (goods, works) for the subject of natural monopoly of low power not later than one calendar day before taking the decision of their assertion. The subject of natural monopoly is obliged after publication of information on the date of carrying out public hearings to provide on the request of participants of public hearings: drafts of tariff estimates, tariffs (prices, rates of fees) on adjustable services (goods, works) or their limits; information about the reasons of increasing tariffs (prices, rates of fees) on adjustable services (goods, works) or their limits along with economically reasonable calculations.

219 TABLE OF CONTENT According to the resolution of the government of the Republic of Kazakhstan dated April 21, 2003 «About Section 1. HISTORY AND CURRENT STATUS OF ELECTRIC POWER INDUSTRY the approval of Rules of carrying out public hearings by consideration of demands for the assertion of tariffs ҚАЗАҚША Section 2. DEVELOPMENT OBJECTIVES (prices, rates of fees) or their limits on adjustable services (goods, works) subjects of natural monopolies» Art.1 of item 3 – public hearings – procedure of discussion the a tariff project (price, rates of fees) or its limit Section 3. MAIN PRINCIPLES AND STRATEGIES FOR ELECTRIC POWER INDUSTRY on adjustable services (goods, works) the subject of natural monopoly by inviting deputies, representatives of DEVELOPMENT IN THE REPUBLIC OF KAZAKHSTAN government bodies, consumers and their public associations, the mass media, independent experts and subjects of natural monopolies; item 8 public hearings are carried out: Section 4. “TRANSPARENT TARIFF” CIVIL РУССКИЙ INITIATIVE: CONTENT AND WAYS OF 1) at the assertion of limits of tariffs (prices, rates of fees) on adjustable services (goods, works) for the subject IMPLEMENTATION of natural monopoly not later than thirty calendar days prior to taking the decision of the assertion; 2) at the assertion of tariffs (prices, rates of fees) on adjustable services (goods, works) for the subject of BASIC QUESTIONNAIRE ON INDICATORS natural monopoly not later than in fifteen calendar days prior to taking the decision of the assertion; ENGLISH 3) at the assertion of tariffs (prices, rates of fees) on adjustable services (goods, works) for the subject of SUMMARY TABLE of selected indicators of natural monopoly according to point 5 of Article 18 of the Law of the Republic of Kazakhstan «About “Electricity Governance Initiative” program natural monopolies and controlled markets» not later than seven calendar days prior to taking the decision SUMMARY TABLE Indicators on the “Political of the assertion; Process” of Management of the Electricity Power Sector in Kazakhstan 4) at the assertion of tariffs (the prices, rates of fees) on adjustable services (goods, works) for the subject TABLE OF INDICATORS on “Political Process” of natural monopoly of low power not later than one calendar day prior to taking the decision of the of the Electricity Power Sector Management in assertion. Kazakhstan SUMMARY TABLE indicators on “Regulatory UNFOLDED EXPLANATION Process” of electricity sector management of Kazakhstan ESTIMATION SELECTION Table of evaluation of “Regulatory Process” indicators of the electricity sector governance in An estimation is not applicable/Absence of estimation Kazakhstan SUMMARY TABLE of indicators on the evaluation The reporting or activity meets none of the quality elements “Low” of ecological and social aspects of the Kazakhstan’s electrical power sector management The reporting or activity meets to one quality element “Low to Average” TABLE OF INDICATORS on the evaluation of ecological and social aspects of Kazakhstan’s The reporting or activity meets to two quality elements “Average” electricity sector management FILLED PROJECT INDICATORS The reporting or activity meets to three quality elements “Average to High”

REGULATORY PROCESS INDICATORS The reporting or activity meets to all quality elements “High”

220 TABLE OF CONTENT Researcher name and organization: Kurmanbayeva A.A. LS “Committee on public control over execution of Section 1. HISTORY AND CURRENT STATUS OF ELECTRIC POWER INDUSTRY state programs at local level”. ҚАЗАҚША Section 2. DEVELOPMENT OBJECTIVES The source of information: Informational-legal system of regulations of the Republic of Kazakhstan; the Reso- Section 3. MAIN PRINCIPLES AND STRATEGIES lution of the government of the Republic of Kazakhstan No. 376 dated April 21, 2003 “On the approval of pub- FOR ELECTRIC POWER INDUSTRY DEVELOPMENT IN THE REPUBLIC OF lic hearing rules for consideration of tariff requests (prices, rates of fees) or their limits on adjustable services KAZAKHSTAN (goods, works) for a subject of natural monopolies” http://adilet.zan.kz/rus/docs/P030000376_, the Law of the

Section 4. “TRANSPARENT TARIFF” CIVIL Republic of Kazakhstan of July 9, 1998 No. 272-I “About natural monopolies and controlled markets” РУССКИЙ INITIATIVE: CONTENT AND WAYS OF http://online.zakon.kz/Document/?doc_id=1009803, http://www.esalmaty.kz/index.php/en/rates-and-servic- IMPLEMENTATION es/tariff-plans.

BASIC QUESTIONNAIRE ON INDICATORS ENGLISH

221 TABLE OF CONTENT RP 30 Section 1. HISTORY AND CURRENT STATUS OF LICENSING ELECTRIC POWER INDUSTRY ҚАЗАҚША Quality Ele- Indica- Section 2. DEVELOPMENT OBJECTIVES Explanation Section 3. MAIN PRINCIPLES AND STRATEGIES ments tor FOR ELECTRIC POWER INDUSTRY DEVELOPMENT IN THE REPUBLIC OF KAZAKHSTAN Government decree of the Republic of Kazakhstan dated December 28, 2007 called «Rules on licensing and qualifying requirements imposed on separate Section 4. “TRANSPARENT TARIFF” CIVIL РУССКИЙ INITIATIVE: industrial activities» is adopted. For acquisition of license the applicants have CONTENT AND WAYS OF to present a certain list of documents, and certain information, that certifies IMPLEMENTATION Well-defined that they qualifying for the requirements. After the applicant’s list of docu- procedure of a ments is presented and registered, the licensor, as determined by the terms BASIC QUESTIONNAIRE ON INDICATORS Yes

licence applica- of the Law, addresses an inquiry to authorities, appointed by the Government ENGLISH tion of the Republic of Kazakhstan, concerning the conclusion of the applicant’s SUMMARY TABLE of selected indicators of compliance with the specified requirements. The licensor considers what has “Electricity Governance Initiative” program been presented by the applicant’s information and his documents for compli- SUMMARY TABLE Indicators on the “Political ance with the specified requirements, and concludes within 30 working days Process” of Management of the Electricity Power for state structures, and for small business entities within 10 working days. Sector in Kazakhstan Qualified demands are determined by the decree of the Government of the TABLE OF INDICATORS on “Political Process” Well-defined cri- of the Electricity Power Sector Management in Republic of Kazakhstan dated December 28, 2007, “About rules of licensing teria of a licence Yes Kazakhstan and confirmation of qualifying requirements, which are determined by the application SUMMARY TABLE indicators on “Regulatory specific kinds of activity in each sphere of industry” Process” of electricity sector management of Kazakhstan Refusal of delivery of a license can happen for the following reasons: Table of evaluation of “Regulatory Process” indicators of the electricity sector governance in • working in this sort of activity is forbidden by the laws of the Republic Kazakhstan of Kazakhstan on this specific category of subjects SUMMARY TABLE of indicators on the evaluation • if not all the documents, which were stipulated by the Government of ecological and social aspects of the were presented. If all obstacles are removed by the applicant, in such Kazakhstan’s electrical power sector management case the application is considered on general grounds. TABLE OF INDICATORS on the evaluation of Clear grounds ecological and social aspects of Kazakhstan’s for change/can- • if the license fees are not paid electricity sector management cellation/ sus- Yes • if applicant doesn’t correspond to qualifying requirements FILLED PROJECT INDICATORS pension of the license • if a decision exists concerning the applicant, which came into force, and REGULATORY PROCESS INDICATORS which prohibits activity in any specific sphere. The refusal of license delivery by the licensor is given in a motivated, written form answering to applicant as stipulated by the law. The suspension of the license is carried out according to items 1-4, 6 of Article 53, from the Code of RK “About administrative breaches”;, the suspension or prohibition of the activity or specific kinds of individual entrepreneurial or juridical person’s activity is carried out in the following cases:

222 TABLE OF CONTENT 1. Suspension or prohibition of the activity or specific kinds of individual Section 1. HISTORY AND CURRENT STATUS OF ELECTRIC POWER INDUSTRY entrepreneurial or juridical person activity can only be carried out after a ҚАЗАҚША Section 2. DEVELOPMENT OBJECTIVES judicial proceeding by the applicable authority (official functionary) that is authorized to consider cases concerning administrative breaches. Section 3. MAIN PRINCIPLES AND STRATEGIES FOR ELECTRIC POWER INDUSTRY 2. The statement of claim concerning suspension or prohibition of the DEVELOPMENT IN THE REPUBLIC OF KAZAKHSTAN activity or specific kinds of individual entrepreneurial or juridical person

Section 4. “TRANSPARENT TARIFF” CIVIL activity is directed to the court by the order and on the grounds, which РУССКИЙ INITIATIVE: are stipulated in the act of legislation of the Republic of Kazakhstan. The CONTENT AND WAYS OF IMPLEMENTATION application is considered by the court during the next 10 days. 3. The measure of the administrative sanction such as suspension of the BASIC QUESTIONNAIRE ON INDICATORS activity or specific kinds of individual entrepreneurial or juridical person activity is applied in cases, when the breach is removed by carrying out ENGLISH specific actions in terms, which are stipulated by the court for the purpose SUMMARY TABLE of selected indicators of of this removal. “Electricity Governance Initiative” program SUMMARY TABLE Indicators on the “Political 4. The suspension of the activity or specific kinds of individual entrepreneurial Process” of Management of the Electricity Power or juridical person activity without judicial decision is allowed in Sector in Kazakhstan exceptional cases so that of a statement of claim on above mentioned TABLE OF INDICATORS on “Political Process” term is presented within three days. At the same time the act concerning of the Electricity Power Sector Management in prohibition or suspension or specific kinds of activity is valid until the Kazakhstan court decision. SUMMARY TABLE indicators on “Regulatory 5. The suspension of an owner of private goods storage warehouse is Process” of electricity sector management of carried out by the authorized representative in the sphere of the customs Kazakhstan legislation of the Republic of Kazakhstan. Table of evaluation of “Regulatory Process” indicators of the electricity sector governance in According to the article 12 «The appeal to decisions made based on consid- Kazakhstan eration of references » of the Law of the Republic of Kazakhstan «On review SUMMARY TABLE of indicators on the evaluation process procedure for application of individuals and legal entities» dated of ecological and social aspects of the January 12, 2007, the complaint on actions (inactivity) of officials, as well as Kazakhstan’s electrical power sector management on decision of the subject to appeal to a higher official or subject by way of TABLE OF INDICATORS on the evaluation of subordination, not later than three months following the moment when the ecological and social aspects of Kazakhstan’s electricity sector management physical or legal person learned about the action or decision-making by the Settlement of corresponding subject or the official. Missed timeframe for the appeal is no Yes FILLED PROJECT INDICATORS disputes grounds for refusal when considering the complaint of the subject or the REGULATORY PROCESS INDICATORS official. The reasons for missing the timeframe are found out after consideration of the complaint in essence and can be one of the grounds for refusal in satisfying the complaint. According to the law of Republic of Kazakhstan dated January 12, 2007 «About an order considering physical and legal persons references» Article 12 in the absence of a higher official or the subject’s or applicant’s disagreement with the decision taken, the application can file directly with the court.

223 TABLE OF CONTENT Bringing the licensee to administrative responsibility by directing the case to Section 1. HISTORY AND CURRENT STATUS OF ELECTRIC POWER INDUSTRY court is possible in the following cases: ҚАЗАҚША Section 2. DEVELOPMENT OBJECTIVES • hampering the licensor in the performance of his official duties by Section 3. MAIN PRINCIPLES AND STRATEGIES (the refusal to present necessary documents, materials, information FOR ELECTRIC POWER INDUSTRY DEVELOPMENT IN THE REPUBLIC OF on activity, refusal to access for the purpose of carrying out checks or KAZAKHSTAN in creation of other obstacles or concept of unreliable information;

Section 4. “TRANSPARENT TARIFF” CIVIL РУССКИЙ INITIATIVE: • non-fulfillment or improper performance of legal requirements or CONTENT AND WAYS OF directions, concepts and regulations of the licensor; IMPLEMENTATION • Granting obviously unauthentic information during the license appli- BASIC QUESTIONNAIRE ON INDICATORS cation, and also none removal of license rules and legal breaches

corrected and by norms which have attracted administrative respon- ENGLISH sibility, after timeframe of termination or suspension of the license. SUMMARY TABLE of selected indicators of Involvement of the licensee with administrative responsibility with- “Electricity Governance Initiative” program out a direct court order is possible in case of: SUMMARY TABLE Indicators on the “Political Process” of Management of the Electricity Power • breaches of the license rules and norms, including discrepancy to Sector in Kazakhstan qualifying requirements. TABLE OF INDICATORS on “Political Process” of the Electricity Power Sector Management in According to paragraph 15 of The licensing rules of certain activities in the Kazakhstan sphere of the industry, approved by the government order of Republic Ka- SUMMARY TABLE indicators on “Regulatory zakhstan dated December 28, 2007 «About the statement of the Rules of Process” of electricity sector management of the licensing and qualifying requirements presented to separate activities in Kazakhstan the sphere of the industry», the license control is carried out by the licensor Table of evaluation of “Regulatory Process” through: indicators of the electricity sector governance in Progress ade- Kazakhstan • presentation by the licensee of annual reports in time, before March, quacy and moni- Yes 1st concerning licensed activity; SUMMARY TABLE of indicators on the evaluation toring of ecological and social aspects of the • planned and unplanned checks of licensees’ activity for conformity to Kazakhstan’s electrical power sector management qualifying requirements, compliance to license requirements and the TABLE OF INDICATORS on the evaluation of legislation of the Republic of Kazakhstan; ecological and social aspects of Kazakhstan’s electricity sector management • the analysis of information from mass-media and others, existing in the materials at licensor’s disposal, on the basis of written applications FILLED PROJECT INDICATORS and messages from state authorities, citizens and, juridical persons. REGULATORY PROCESS INDICATORS

224 TABLE OF CONTENT DETAILED EXPLANATION: According to the Law on Electric Power Sector of the RK, Article 7-1. «Licensing in Section 1. HISTORY AND CURRENT STATUS OF ELECTRIC POWER INDUSTRY the electric power industry» separate kinds of activities in the area of electric power industry are obligatory ҚАЗАҚША Section 2. DEVELOPMENT OBJECTIVES for licensing according to the legislation of Republic of Kazakhstan about licensing. According to subparagraphs 1, 2 and 3 of item 1 of «The List of the kinds of activities licensed by the Agency of Republic of Kazakh- Section 3. MAIN PRINCIPLES AND STRATEGIES FOR ELECTRIC POWER INDUSTRY stan concerning regulation of natural monopolies», approved by the government resolution of the Republic DEVELOPMENT IN THE REPUBLIC OF KAZAKHSTAN of Kazakhstan on the December, 28th, 2007, the Agency of the Republic of Kazakhstan for natural monopolies regulation carries out activity licensing for manufacture of electric energy from electric energy sources of 35 Section 4. “TRANSPARENT TARIFF” CIVIL РУССКИЙ INITIATIVE: kV (kilovolt) and higher, on transfer and distribution of electric energy up to the consumer, as well as on opera- CONTENT AND WAYS OF tion of power plants, electric networks and substations of all types (transformer substations, sub-distributions, IMPLEMENTATION protective relaying and automatics), which are applied as dangerous industrial objects, except for objects of power supply for household purpose and the objects of power supply used in a single technological process. BASIC QUESTIONNAIRE ON INDICATORS

The qualifying requirements presented, including the above-stated licensed activities, are approved by the ENGLISH government order of the Republic of Kazakhstan on December, 28th, 2007. The conditions and the order of SUMMARY TABLE of selected indicators of licensing and (or) appendixes to the license delivery are regulated by the RK law «About licensing» Chapter 5, “Electricity Governance Initiative” program item 42, according to which the license and (or) the appendix to the license provided by the place of registra- SUMMARY TABLE Indicators on the “Political tion of the physical or legal person if the licensor is a local agency or executive powers of the central state Process” of Management of the Electricity Power body. The organizations which are carrying out the reception of applications and documents and licensing and Sector in Kazakhstan (or) licenses appendixes, except for licenses and (or) appendixes to them with the right for occupational activ- TABLE OF INDICATORS on “Political Process” ity in financial sphere and activity connected with the concentration of financial resources, given out by the of the Electricity Power Sector Management in National Bank of the Republic of Kazakhstan, are defined by the Government of the Republic of Kazakhstan. Kazakhstan For reception of the license and (or) appendixes to the license (in case of activity subspecies are available) the SUMMARY TABLE indicators on “Regulatory following documents are necessary for presentation: Process” of electricity sector management of Kazakhstan 1) an application; Table of evaluation of “Regulatory Process” 2) a copy of Articles of Association (notary certified in case of not presenting the originals for verification) indicators of the electricity sector governance in and the certificate of state registration (re-registration) of the legal entity’s application – for legal entities; Kazakhstan 3) a copy of identification document, – for individuals; SUMMARY TABLE of indicators on the evaluation of ecological and social aspects of the 4) a copy of the applicant’s state registration certificate as an individual entrepreneur (notary certified in case Kazakhstan’s electrical power sector management of failure to provide the original for verification) – for individual entrepreneurs; TABLE OF INDICATORS on the evaluation of ecological and social aspects of Kazakhstan’s 5) a copy of the applicant’s tax registration certificate (notary certified in case of not presenting the originals electricity sector management for verification); FILLED PROJECT INDICATORS 6) a copy of the document confirming payment to the budget of license assembly for the right of occupation a REGULATORY PROCESS INDICATORS specific activities, except for cases of payment through the payment getaway of «the electronic government»; 7) information and documents according to qualifying requirements.

225 TABLE OF CONTENT The requirements of subparagraph 2) of the first part thereof regarding the concept of a copy of the statute Section 1. HISTORY AND CURRENT STATUS OF ELECTRIC POWER INDUSTRY (notary testified in case of not presenting the originals for verification) extends on legal persons that are car- ҚАЗАҚША Section 2. DEVELOPMENT OBJECTIVES rying out activity in financial sphere and activity, connected with concentration of financial resources. The concept of the documents stipulated by subparagraphs 2), 3), 4) and 5) of the first of item, is not required on avail- Section 3. MAIN PRINCIPLES AND STRATEGIES FOR ELECTRIC POWER INDUSTRY ability of a possibility of reception of the information, which they contain, from the state information systems DEVELOPMENT IN THE REPUBLIC OF KAZAKHSTAN and (or) from the form of the information. On documents’ presentation through a web-portal of «the electronic government» or through the Public Service Center, the documents are represented in electronic form. In case Section 4. “TRANSPARENT TARIFF” CIVIL РУССКИЙ INITIATIVE: of requirement in the legislation of the Republic of Kazakhstan concerning availability of notary testified copy CONTENT AND WAYS OF of the document or the original document presentation for verification, documents are represented in the IMPLEMENTATION form of an electronic copy of the document certified by the electronic digital signature of the employee of the Public Service Center. The responsibility for reliability of the certified documents is born by the applicant BASIC QUESTIONNAIRE ON INDICATORS

or the licensee who has presented them. Additional requirements for the list of documents while licensing ENGLISH for the right of occupying an activity in financial sphere and any activity connected with the concentration SUMMARY TABLE of selected indicators of of financial resources can also be established by the National Bank of the Republic of Kazakhstan according “Electricity Governance Initiative” program to laws of the Republic of Kazakhstan. The validity of the item 2 of this Article does not extend to cases of SUMMARY TABLE Indicators on the “Political acquisition of license by the order, which is stipulated by Article 73 of the Law of the Republic of Kazakhstan Process” of Management of the Electricity Power «About a provision of pensions in the Republic of Kazakhstan ». For reception of the appendix to the license Sector in Kazakhstan within the activity limits, on which is the license is being made , the following documents are necessary: TABLE OF INDICATORS on “Political Process” 1) an application; of the Electricity Power Sector Management in Kazakhstan 2) information and documents according to the qualifying requirements to sub-activity. SUMMARY TABLE indicators on “Regulatory The licensor is obliged to check up completeness of the presented documents within two working days from Process” of electricity sector management of Kazakhstan the moment of reception of documents of the applicant (licensee). In case if the incompleteness of the presented documents is established, the licensor in the specified timeframes gives a written motivated refusal Table of evaluation of “Regulatory Process” indicators of the electricity sector governance in for further consideration of the application. For reception in accordance with the state authorities by the ap- Kazakhstan plicant conforming to the requirements of the legislation of the Republic of Kazakhstan, the licensor directs an inquiry to appropriate authorities at the place of realization by the applicant of licensed activity, within SUMMARY TABLE of indicators on the evaluation of ecological and social aspects of the two working days from the date of document registration by the applicant concerning acquisition of the li- Kazakhstan’s electrical power sector management cense and (or) appendixes to the license. The state bodies on the of the licensor inquiry direct the answer to TABLE OF INDICATORS on the evaluation of appropriate licensor concerning conformity or discrepancy of the applicant to the given requirements within ecological and social aspects of Kazakhstan’s ten working days. In case of not presenting the answer during the timeframes established by the present Law, electricity sector management the acquisition of the license is considered done. FILLED PROJECT INDICATORS All the documents, presented to appropriate licensor or to the Public Service Center for acquisition of the li- REGULATORY PROCESS INDICATORS cense and (or) appendixes to the license, are transferred according to a list, the copy of which goes (is handed in) back to the applicant with a notice about the date of reception of documents by the specified body.

226 TABLE OF CONTENT Section 1. HISTORY AND CURRENT STATUS OF EVALUATION SELECTION ELECTRIC POWER INDUSTRY ҚАЗАҚША Section 2. DEVELOPMENT OBJECTIVES Not applicable/Not evaluated Section 3. MAIN PRINCIPLES AND STRATEGIES FOR ELECTRIC POWER INDUSTRY DEVELOPMENT IN THE REPUBLIC OF The reporting or activity meets none of the quality elements “Low” KAZAKHSTAN

Section 4. “TRANSPARENT TARIFF” CIVIL The reporting or activity meets one quality element “Low to Average РУССКИЙ INITIATIVE: CONTENT AND WAYS OF IMPLEMENTATION The reporting or activity meets two quality elements “Average”

BASIC QUESTIONNAIRE ON INDICATORS The reporting or activity meets three quality elements “Average to High” ENGLISH The reporting or activity meets all quality elements “High” SUMMARY TABLE of selected indicators of “Electricity Governance Initiative” program The researcher name and the title of the organization: Kurmanbaeva A.A. PO «The Committee on the public SUMMARY TABLE Indicators on the “Political control over the government programs fulfillment on local level» Process” of Management of the Electricity Power Sector in Kazakhstan Source of information: The Law № 214-II of the Republic of Kazakhstan dated January 11, 2007 I «On licensing» TABLE OF INDICATORS on “Political Process” of the Electricity Power Sector Management in http://www.zakon.kz/141150-zakon-respubliki-kazakhstan-ot-11.html , Method book: “ Licensing and regula- Kazakhstan tory approval system in the Republic of Kazakhstan” Institute of Economical Researches “http://www.damu. SUMMARY TABLE indicators on “Regulatory kz/content/files/LitsenzirovanieIRazreshitelnayaSistemaVRespublikeKazakhstanRus.pdf ,Institute of Legisla- Process” of electricity sector management of Kazakhstan tion of the Republic of Kazakhstan. Collection of assets on legal monitoring of j http://www.izrk.kz/index. php?option=com_content&view=category&id=83&layout=blog&Itemid=93&lang=ru Table of evaluation of “Regulatory Process” indicators of the electricity sector governance in Kazakhstan SUMMARY TABLE of indicators on the evaluation of ecological and social aspects of the Kazakhstan’s electrical power sector management TABLE OF INDICATORS on the evaluation of ecological and social aspects of Kazakhstan’s electricity sector management FILLED PROJECT INDICATORS REGULATORY PROCESS INDICATORS

227 TABLE OF CONTENT RP 31 Section 1. HISTORY AND CURRENT STATUS OF PERIODIC REPORTS CONCERNING WORKING WITH THE LICENSEES AND ELECTRIC POWER INDUSTRY ENTREPRENEURS ҚАЗАҚША Section 2. DEVELOPMENT OBJECTIVES Quality Ele- Indica- Section 3. MAIN PRINCIPLES AND STRATEGIES Explanation FOR ELECTRIC POWER INDUSTRY ments tor DEVELOPMENT IN THE REPUBLIC OF KAZAKHSTAN

Section 4. “TRANSPARENT TARIFF” CIVIL The presentation of the report and its form are stipulated in the «Rules of РУССКИЙ INITIATIVE: licensing of separate activities in the sphere of industry» approved by the CONTENT AND WAYS OF IMPLEMENTATION Obligatory re- resolution of the Government of the Republic of Kazakhstan on December, quirement for Yes 28th, 2007. In accordance with the item 15, the licensee, annually represents BASIC QUESTIONNAIRE ON INDICATORS presentation a report about licensing activity provided by March, 1st of the year, which

follows after the fiscal year, according to the form of the Annex № 3 of the ENGLISH present Rules. SUMMARY TABLE of selected indicators of “Electricity Governance Initiative” program Easy accessibility No The reports are not published SUMMARY TABLE Indicators on the “Political Process” of Management of the Electricity Power Timely accessi- No The reports are not published Sector in Kazakhstan bility TABLE OF INDICATORS on “Political Process” of the Electricity Power Sector Management in The accessibil- Kazakhstan ity in local lan- No The reports are not published SUMMARY TABLE indicators on “Regulatory guages Process” of electricity sector management of Kazakhstan According to the explanatory note of Annex 3 to the «Rules of licensing Table of evaluation of “Regulatory Process” of specific types of industrial activity», a report should contain information indicators of the electricity sector governance in concerning the kind of activity to be licensed in accordance with qualified Kazakhstan requirements, with the exception of acts, which are inspected by the local SUMMARY TABLE of indicators on the evaluation oversight bodies, and also on the condition of the existence of oversight of ecological and social aspects of the Sequence and bodies’ directions, in such case a copy of directions and information about Kazakhstan’s electrical power sector management clearance of the changes, which were placed in the data for license acquisition, is given by TABLE OF INDICATORS on the evaluation of reporting pa- the licensee in the sphere of electric power industry, except for above-stated ecological and social aspects of Kazakhstan’s electricity sector management rameters information, on the report concerning realization of properly approved programs and measures concerning energy-savings to preserve the environ- FILLED PROJECT INDICATORS ment;, safety engineering is also presented; programs about reconstruction, REGULATORY PROCESS INDICATORS modernization of operating and construction of new industrial facilities in the sphere of electric power industry, with usage of modern equipment and technologies, plans (programs) of repair work performance.

228 TABLE OF CONTENT DETAILED EXPLANATION Section 1. HISTORY AND CURRENT STATUS OF ELECTRIC POWER INDUSTRY EVALUATION SELECTION ҚАЗАҚША Section 2. DEVELOPMENT OBJECTIVES Section 3. MAIN PRINCIPLES AND STRATEGIES FOR ELECTRIC POWER INDUSTRY Not applicable/Not evaluated DEVELOPMENT IN THE REPUBLIC OF KAZAKHSTAN The reporting or activity meets none of the quality elements “Low” Section 4. “TRANSPARENT TARIFF” CIVIL РУССКИЙ INITIATIVE: CONTENT AND WAYS OF The reporting or activity meets one quality element “Low to Average” IMPLEMENTATION The reporting or activity meets two quality elements “Average” BASIC QUESTIONNAIRE ON INDICATORS The reporting or activity meets three quality elements “Average to High” ENGLISH

SUMMARY TABLE of selected indicators of “Electricity Governance Initiative” program The reporting or activity meets all quality elements “High” SUMMARY TABLE Indicators on the “Political Process” of Management of the Electricity Power The researcher name and the title of the organization: Kurmanbaeva A.A. PO «The Committee on the public Sector in Kazakhstan control by the government programs fulfillment on local level» TABLE OF INDICATORS on “Political Process” of the Electricity Power Sector Management in The source of the information: Licensing regulation of certain activities in the sphere of industry http://www. Kazakhstan uchet.kz/zakon/index.php?SECTION_ID=25&ELEMENT_ID=18661 , Agency of the Republic of Kazakhstan on SUMMARY TABLE indicators on “Regulatory natural monopolies regulation http://www.arem.gov.kz/ru/98/. Process” of electricity sector management of Kazakhstan Table of evaluation of “Regulatory Process” indicators of the electricity sector governance in Kazakhstan SUMMARY TABLE of indicators on the evaluation of ecological and social aspects of the Kazakhstan’s electrical power sector management TABLE OF INDICATORS on the evaluation of ecological and social aspects of Kazakhstan’s electricity sector management FILLED PROJECT INDICATORS REGULATORY PROCESS INDICATORS

229 TABLE OF CONTENT RP 32 CONSUMER SERVICES AND DELIVERY QUALITY. SERVICE OF CONSUMERS AND Section 1. HISTORY AND CURRENT STATUS OF ELECTRIC POWER INDUSTRY QUALITY OF SERVICES ҚАЗАҚША Section 2. DEVELOPMENT OBJECTIVES Quality Elements Indicator Explanation Section 3. MAIN PRINCIPLES AND STRATEGIES FOR ELECTRIC POWER INDUSTRY DEVELOPMENT IN THE REPUBLIC OF Standards availability KAZAKHSTAN

Section 4. “TRANSPARENT TARIFF” CIVIL Standards of consumer services and supply quality are governed by the Law РУССКИЙ INITIATIVE: CONTENT AND WAYS OF on Electric Power Sector of the RK dated July 9, 2004, and by the Rules of IMPLEMENTATION public utility services approved by the Decree of the Government of the RK dated December 7, 2000, and by a suitable standard form of contracts. Accord- BASIC QUESTIONNAIRE ON INDICATORS ing to paragraphs 3, 4, 5 of article 37 of the «Rules of public utility services», a power supplier is responsible for: ENGLISH

SUMMARY TABLE of selected indicators of - provision of power and services to Consumer in accordance with essential “Electricity Governance Initiative” program quality requirements of regulatory technical documentation; SUMMARY TABLE Indicators on the “Political - maintenance of records and control in both quality and quantity of power Process” of Management of the Electricity Power Sector in Kazakhstan supplied, timely measures to prevent and correct defects in quality of services provided to the Consumer within the timeframes established by the Contract; TABLE OF INDICATORS on “Political Process” of the Electricity Power Sector Management in Consumer servic- - corrective actions on quality recovery and reassessment within three days Kazakhstan es and standards Yes from the date of Consumer application about downgraded service; SUMMARY TABLE indicators on “Regulatory of supply quality According to the standard contract form concerning power supply for residen- Process” of electricity sector management of Kazakhstan tial users concluded between the supplier and the consumer, granting energy to the Consumer falls within the responsibility of supplier, which corresponds Table of evaluation of “Regulatory Process” indicators of the electricity sector governance in to The State Standard (SS) 13109-97 approved by the Interstate Council on Kazakhstan standardization, Metrology and Certification (report N 12-97 from the No- vember, 21st, 1997) and by Government of the Republic Kazakhstan’s regula- SUMMARY TABLE of indicators on the evaluation of ecological and social aspects of the tion from e June, 15th, 2012 also approved «Rules of rendering of services on Kazakhstan’s electrical power sector management maintenance of reliability and stability of electro supply»; by the Government TABLE OF INDICATORS on the evaluation of order of the Republic of Kazakhstan from June, 19th, 2013 «About the state- ecological and social aspects of Kazakhstan’s ment of electricity supply network rules» which approves «The Order of elec- electricity sector management tric network usage»;. by the Governmental order of RK from the August, 31st, FILLED PROJECT INDICATORS 2012 which stipulates «The Standards of the state services in the sphere of the electric power industry». REGULATORY PROCESS INDICATORS The delivery The delivery quality standards are consolidated by legal acts and are obliga- quality standards Yes tory are obligatory

230 TABLE OF CONTENT

Section 1. HISTORY AND CURRENT STATUS OF The standard quality ELECTRIC POWER INDUSTRY ҚАЗАҚША Section 2. DEVELOPMENT OBJECTIVES The State Energy Supervision Committee of the Ministry of Industry and New Section 3. MAIN PRINCIPLES AND STRATEGIES Technologies of the Republic of Kazakhstan according to item 2 of the «Regu- FOR ELECTRIC POWER INDUSTRY Progress moni- lations about State energy supervision Committee of the Ministry of Industry DEVELOPMENT IN THE REPUBLIC OF Yes KAZAKHSTAN toring and New Technologies of the RK» approved by the responsible secretary of

the MINT’s order from June, 2nd, 2010 carries out state control on compliance РУССКИЙ Section 4. “TRANSPARENT TARIFF” CIVIL INITIATIVE: with the requirements of specifications on quality of electric energy. CONTENT AND WAYS OF IMPLEMENTATION Regular reviews of conformity are carried out. An example: the Account about Compliance re- Yes technological breaches during 6 months of 2013, the Account about techno- BASIC QUESTIONNAIRE ON INDICATORS view

logical breaches during 6 months of the 2012 year. ENGLISH

SUMMARY TABLE of selected indicators of the Account with technological breaches during 6 months of the 2013 year, “Electricity Governance Initiative” program General acces- the Account about technological breaches during 6 months of the 2012 are SUMMARY TABLE Indicators on the “Political sibility of com- available on the web site of the Committee of the Ministry of the Industry Yes Process” of Management of the Electricity Power pliance review and New Technologies of the Republic of Kazakhstan : Sector in Kazakhstan results http://kgen.gov.kz/index.php/ru/otchetnost-o-tekhnologicheskikh-narush- TABLE OF INDICATORS on “Political Process” of the Electricity Power Sector Management in eniyakh. Kazakhstan The Applications of consumers are regulated by the law of the Republic Ka- SUMMARY TABLE indicators on “Regulatory Process” of electricity sector management of zakhstan on January, 12th, 2007 «About an order of consideration of applica- Kazakhstan tion by physical and legal persons ». According to the law of the Republic of Kazakhstan on July, 9th, 1998 «About natural monopoly and the regulated Table of evaluation of “Regulatory Process” indicators of the electricity sector governance in markets» the Article 19 in case of a breach of the present Law the subjects of Kazakhstan natural monopolies and regulated markets, the authorities and their direc- SUMMARY TABLE of indicators on the evaluation tors are obliged to: of ecological and social aspects of the - to arrange compensation for the damage caused and (or) losses directly or Kazakhstan’s electrical power sector management Customer com- by means of temporary tariff decrease (prices, rates of charges); Yes TABLE OF INDICATORS on the evaluation of plaints ecological and social aspects of Kazakhstan’s - To cancel or change the certificate, which doesn’t correspond to the present electricity sector management Law. According to the law of the Republic Kazakhstan on January, 12th, 2007 FILLED PROJECT INDICATORS «About an order of consideration of applications by physical and juridical persons » Article 12 in case of absence of a higher official or the subject’s or REGULATORY PROCESS INDICATORS applicant’s disagreement with the accepted decision, an application goes directly to the court. On the web site of Committee of the state power supervision of the Committee of the Ministry of the Industry and New Technologies of the Republic of Kazakhstan it is possible to ask a question and to get an answer.

231 TABLE OF CONTENT DETAILED EXPLANATION: In case of absence of the possibility of maintening a necessary voltage level of the Section 1. HISTORY AND CURRENT STATUS OF ELECTRIC POWER INDUSTRY electric power provided, the supplier is obliged to recalculate with the consumers for not supplying energy. ҚАЗАҚША Section 2. DEVELOPMENT OBJECTIVES For this purpose it is necessary to ascertain the low quality electric power supplied. For this purpose the consumer must inform the supplier personally about it by application by telephone message with the obligatory Section 3. MAIN PRINCIPLES AND STRATEGIES FOR ELECTRIC POWER INDUSTRY indication of the time, the date of its transfer and a surname of the person who has received and accepted it. In DEVELOPMENT IN THE REPUBLIC OF KAZAKHSTAN the application it is necessary to specify the losses, which are connected with the household devices and techniques functional loss. To notify the service center all household devices, which have broken down because Section 4. “TRANSPARENT TARIFF” CIVIL РУССКИЙ INITIATIVE: of the change of voltage and supply confirming document concerning the reason of break down. To present CONTENT AND WAYS OF the written claim to the supplier about the compensation of damages. The supplier of energy verifies notices IMPLEMENTATION in the quality journal about (the break) of the service from the norm specified in the application and in case of absence of disagreement, carries out the recalculation of service cost according to its actual consumption. BASIC QUESTIONNAIRE ON INDICATORS

In case of a refusal by the supplier to certify the fact of not rendering service or of rendering a poor quality ENGLISH of service, the Consumer have the right to make the written application where it is underlined: the time of SUMMARY TABLE of selected indicators of beginning the refusal in service (breakout) or its poor-quality supply; the character of quality degeneration of “Electricity Governance Initiative” program service; time of filing out an application and its registration number (according to the journal of the Service SUMMARY TABLE Indicators on the “Political Provider); the time of the service restoration (normalization of its quality); the period of absence (degeneration Process” of Management of the Electricity Power of quality) of service. Also a certificate is made up, which is signed by the Consumer, an authorized member Sector in Kazakhstan of the cooperative society premises (houses) owners, by the service organization or by the two independent TABLE OF INDICATORS on “Political Process” witnesses and goes directly to the Service Provider. In case of no solution to the dispute concerning an accord of the Electricity Power Sector Management in between the sides within a ten day timeframe the Consumer has the right to bring the action to court. Kazakhstan SUMMARY TABLE indicators on “Regulatory EVALUATION SELECTION Process” of electricity sector management of Kazakhstan Not applicable/Not evaluated Table of evaluation of “Regulatory Process” indicators of the electricity sector governance in The reporting or activity meets none of the quality elements Low Kazakhstan SUMMARY TABLE of indicators on the evaluation The reporting or activity meets one quality element “Low to Average” of ecological and social aspects of the Kazakhstan’s electrical power sector management The reporting or activity meets two quality elements “Average” TABLE OF INDICATORS on the evaluation of ecological and social aspects of Kazakhstan’s The reporting or activity meets three quality elements “Average to High” electricity sector management FILLED PROJECT INDICATORS The reporting or activity meets all quality elements “High” REGULATORY PROCESS INDICATORS

232 TABLE OF CONTENT The researcher name and the title of the organization: Kurmanbaeva A.A. PO «The Committee on the public Section 1. HISTORY AND CURRENT STATUS OF ELECTRIC POWER INDUSTRY control by the government programs fulfillment on local level» ҚАЗАҚША Section 2. DEVELOPMENT OBJECTIVES The source of the information: The official web site of the Committee on State Power Supervision of the Min- Section 3. MAIN PRINCIPLES AND STRATEGIES istry of Industry and New Technologies of the Republic of Kazakhstan, Disturbance reporting over 6 months FOR ELECTRIC POWER INDUSTRY DEVELOPMENT IN THE REPUBLIC OF of 2013, Disturbance reporting over 6 months of 2012 http://kgen.gov.kz/index.php/ru/otchetnost-o-tekhno- KAZAKHSTAN logicheskikh-narusheniyakh, The Law № 377-IV of The Republic of Kazakhstan dated January 6, 2011 “State Section 4. “TRANSPARENT TARIFF” CIVIL control and supervision in the Republic of Kazakhstan” http://online.zakon.kz/Document/?doc_id=30914758, РУССКИЙ INITIATIVE: CONTENT AND WAYS OF Regulation on the Committee of the State Power Supervision of the Ministry of Industry and New Technolo- IMPLEMENTATION gies of the Republic of Kazakhstan http://base.spinform.ru/show_doc.fwx?rgn=31588, Information and Legal System of Regulations and Standards of the Republic of Kazakhstan. Government Decree dated June 15, 2012, BASIC QUESTIONNAIRE ON INDICATORS and «Regulation on Electric Reliability and Stability”, http://adilet.zan.kz/rus/docs/P1200000795, Information and Legal System of Regulations and Standards of the Republic of Kazakhstan, Law No. 221 of the Republic of ENGLISH SUMMARY TABLE of selected indicators of Kazakhstan dated January 12, 2007 “Order of consideration of applications from Individuals and Legal Entities”, “Electricity Governance Initiative” program http://adilet.zan.kz/rus/docs/Z070000221. SUMMARY TABLE Indicators on the “Political Process” of Management of the Electricity Power Sector in Kazakhstan TABLE OF INDICATORS on “Political Process” of the Electricity Power Sector Management in Kazakhstan SUMMARY TABLE indicators on “Regulatory Process” of electricity sector management of Kazakhstan Table of evaluation of “Regulatory Process” indicators of the electricity sector governance in Kazakhstan SUMMARY TABLE of indicators on the evaluation of ecological and social aspects of the Kazakhstan’s electrical power sector management TABLE OF INDICATORS on the evaluation of ecological and social aspects of Kazakhstan’s electricity sector management FILLED PROJECT INDICATORS REGULATORY PROCESS INDICATORS

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