The basic legal instruments regulating the field of energy in Georgia are the Law of Georgia on Electricity and Natural Gas and the Law of Georgia on Oil and Gas. Main regulatory authorities in this field are the Ministry of Energy of Georgia, LEPL - the Georgian National Energy and Water Supply Regulatory Commission (GNERC) and the LEPL State Agency of Oil and Gas (SAOG).
GNERC is entitled to issue permanent licenses for the following activities: generation, dispatch, transmission and distribution of electricity; transportation and distribution of natural gas; water supply. As for SAOG, it is empowered to issue oil and natural gas processing and oil transportation licenses. The GNERC and SAOG approve the tariff methodology in their fields of operation. The GNERC and SAOG are also entitled to impose penalties or even make a decision on the revocation of license as an ultimate measure against a licensee who fails to comply with conditions of the license and/or the relevant regulations.
One of the main objectives of the law in the field of energy is to create the competitive environment in the energy market; encourage domestic and foreign investments in order to rehabilitate and develop the electricity, natural gas and water supply sectors; support predominant use of local hydropower and other renewable, alternative and natural gas resources; promote the development of competition in electricity, natural gas and oil markets of Georgia; to observe principles of publicity and legality in the decision-making process.