The Implications of the Third Energy Package

1
The Implications of the Third Energy Package

• Brussels, 16 December 2008
• Tim Vermeir
• Member of the Brussels Bar
• Affiliated junior researcher Institute for
  Environmental and Energy Law, K.U.Leuven

2
Overview

• Unbundling
• Regulation
• Gazprom-Clause
• Agency
• ENTSO
• Consumer protection

3
Unbundling

• Proposal European Commission
• Unbundling of transmission networks
• Not of the distribution networks, because they
  typically do not have cross border connections
• TSO must actually own and control the network
• A person or company having direct or indirect
  control over a TSO may not have any interest or
  control in a supply undertaking and vice versa.
• Except for minority shareholders
• Alternative Independent System Operator model
  (ISO)

4
Unbundling (II)

• Energy Council October 2008
• Third option Independent Transmission Operator
  ITO
• Energy undertakings can remain owner of
  Transmission System
• Operations will be carried out by an independent
  system operator
• In countries where full unbundling has been
  introduced, integrated energy companies from
  other member states cannot acquire the TSOs

5
Regulation

• Strengthening the powers and duties of NRA
• Binding decisions
• Penalties
• Full independency
• Own budgets
• Sufficient staffing
• Strict rules for appointment and term of
  management
• Requirement for cooperation between NRAs

6
Gazprom-Clause

• Companies from third countries wishing to acquire
  a significant interest/control over an EU
  network, will have to demonstrably and
  unequivocally comply with the same unbundling
  requirements as EU companies
• Third country individuals and countries cannot
  acquire control over a Community transmission
  system or transmission system operator unless
  this is permitted by an agreement between the EU
  and the third country

7
Agency

• ERGEG / Madrid and Florence Fora
• Main tasks
• Framework for national regulators to cooperate
• Regulatory oversight of the cooperation between
  TSOs
• Individual decision powers
• General advisory role
• Role of the Commission
• Agency has no political discretion outside the
  framework of the Directives, the Regulations or
  the Guidelines
• Agency shall inform Commission Commission will
  act.
• Substantive decisions only by the Commission

8
Cooperation between TSOs

• Strengthening and formalisation of cooperation
  between TSOs through European Network of
  transmission system operators
• Developing harmonised standards for access
  (booking allocating capacity)
• Ensuring co-ordination (avoiding blackouts) and
• Co-ordinating and planning network investments.
• Cooperation between ENTSO and Agency

9
Consumer protection

• European Parliament Customers should have
• The right to withdraw from contracts without
  charge
• The right to compensation if service quality
  levels are not met
• Information
• on their rights through bills and electricity
  company web sites
• on procedures to be followed in the event of
  disputes
• on actual electricity consumption and costs
• on the environmental impact of the supplied
  electricity
• The right to change suppliers within two weeks
• Access to smart meters within 10 years
• The right to protection against market abuse
  (price caps in uncompetitive markets for a
  defined and limited period).

10
Thank you for your attention

• Tim Vermeir
• Member of the Brussels Bar
• Affiliated junior researcher Institute for
  Environmental and Energy Law, K.U.Leuven
• tim.vermeir_at_law.kuleuven.be
• As of 1 January 2009
• Publius
• Wetstraat 26/7
• 1040 Brussel
• 32 2 234 66 00
• tvermeir_at_publius.be