Brussels, 10/10/2008 (Agence Europe) - The Energy Council, meeting in Luxembourg on 10 October under the chairmanship of French Ecology Minister Jean-Louis Borloo, reached political agreement on the 3rd legislative package for liberalising the internal gas and electricity market. On the basis of this agreement, the Council common positions will be prepared before being sent to the European Parliament for second reading.
On 6 June, under Slovenian Presidency (see EUROPE 9678), the Energy Council reached agreement on the key points of the 3rd liberalisation package tabled by the European Commission in September 2007. The Council came to consensus on the effective unbundling of energy operators' production/supply and network/transport activities. It agreed on a compromise on the modalities of an alternative to ownership unbundling - the ITO model, which allows vertically integrated enterprises (VIEs) to keep ownership of transport networks on condition that these are managed by an independent Transmission System Operator (TSO) and that the strict condition set are met. The Council decided that this option should be put to two sectors (gas and electricity). The June agreement is based also on: minority shareholding, public share-ownership, the “third country clause”, appointment and certification of TSOs, exemptions, the adoption of network codes, regulatory responsibilities, regional cooperation, issues specific to the gas sector and arrangements related to the Agency for the Cooperation of Energy Regulators.
Two unresolved issues remained however: the clause on fair competition (or, level playing field) conditions and the “third country clause” (or “Gazprom clause”). Following intense negotiations in Luxembourg on Friday, ministers came to unanimous agreement on these two points.
All 27 countries agreed firstly on inserting into the directive texts a clause on conditions for fair competition, fiercely argued for by the Netherlands. The aim is to ensure the same competition conditions for operators in member states which opt for ownership unbundling compared with VIEs in member states opting for the ITO model. The Netherlands, Spain, Portugal, Denmark and Poland thus got the principle included in the preamble and the Article on effective unbundling in the directives on electricity (Art.8) and gas (Art.7) and made a specific Article. Thus Article 8 of the electricity directive says that companies active in whatever area of production or supply can not under any circumstances exert direct or indirect control over a dissociated TSO in member states which opt for ownership unbundling or exert any power over the TSO in the exercise of their transport activities. Furthermore, a specific Article says that member states may take measures, in line with the directive, to ensure fair competition conditions which must comply with the EC Treaty, in particular Article 30, and European law. These measures must be proportionate, non-discriminatory and transparent. They can only be implemented after approval by the Commission, which has to provide a response within two months of receipt of a request. This period, which can be extended by two months of the Commission decides it needs further information, begins on the date that the full information is received. If the Commission does not respond within the two months, it will be taken that it has no objection to the measures, the text says. The level playing field principle is noted twice in the preamble. A member state, it says, has the right to opt for full separation, the company does not have the right to choose the option involving setting up an independent TSO. Further, companies exercising a production or transport role can not have direct or indirect control over the TSO of a member state which has opted for this full separation, or exert any power over the TSO. Secondly, given that various types of organisation will co-exist on the internal market, measures which member states could take to ensure fair competition conditions should be based on over-riding general interest requirements. The Commission should be consulted on the compatibility of these measures with the EC Treaty and EU law.
On the “third country clause”, member states agreed a text which states that, in the event of an energy operator or company from a third country investing in a member state's TSO and taking control, the national regulator would have the power to finalise the decision on the certification of the TSO, on the basis of an opinion from the Commission which would have to assess, for example, whether the investment threatened the member state's energy security and whether there were bilateral agreements with the third country.
Lastly, despite reservations from Germany, which wanted a voting system related to the size of member states' populations, ministers agreed that the voting system to be used in the Agency for the Cooperation of Energy Regulators will be one country one vote. (E.H./transl.rt)