Brussels, 12/04/2016 (Agence Europe) - member states should not be able to force only some companies to provide natural gas to the end consumer at regulated prices while other companies are not subject to that obligation, says European Court of Justice Advocate General Paolo Mengozzi in conclusions presented to the court on Tuesday 12 April in case C-121/15 P.
France requires the historic supplier of natural gas, GDF-Suez, along with local distribution companies and Total Énergie Gaz to offer natural gas at regulated prices for some types of consumer (67.5% of residential sites and 40.2 % of non-residential sites in 2014). Yet at the same time, all suppliers, including companies that have to provide natural gas at regulated prices, have the option of supplying natural gas at lower prices.
At first sight, such an arrangement seems to be allowed by the EU directive on the internal market for natural gas (2009/73/EC), as the Court of Justice pointed out in a ruling in 2010 (C-265/08), when it ruled that member states could intervene in the setting of prices for the end consumer as long as the intervention pursued a general economic interest, was proportionate and laid down clearly defined, transparent, controllable and non-discriminatory public service obligations, while ensuring equal access to consumers for EU gas companies.
The French association of energy retailers (ANODE) is challenging the way the French State interprets the rules and the French supreme court (Conseil d'État) has asked the Court of Justice whether such intervention is a barrier to the achievement of a competitive natural gas market and whether it can be justified.
Mengozzi set out in five points why he believes this intervention, which is a barrier to the achievement of a competitive gas market, is not proportionate, although it seems to pursue a legitimate objective (security of energy supply and territorial cohesion). He gives the following reasons: the suppliers to which the regulated prices apply are not required to sign long-term supply contracts that would have the aim of ensuring security of supply at reasonable prices in the event of an energy crisis or highly volatile prices; less binding measures are conceivable for meeting the territorial cohesion objective; the fact that the intervention is permanent does not seem to be justified; the intervention does not seem to be limited only to price components likely to be influenced in an upward direction by pursuing the objectives; the regulated price scheme in question only applies to certain companies in the gas sector and thus seems to exclude other companies in the same sector. (Original version in French by Jan Kordys)