The limited powers of a new Agency for the Cooperation of Energy Regulators (ACER), as proposed by the Commission, came under scrutiny during a 24 January public hearing in the Industry (ITRE) Committee of the European Parliament.
Sir John Mogg, President of the Council of European Energy Regulators (CEER) and chair of the European Regulators' Group for electricity and gas (ERGEG), told MEPs that in order to be effective, ACER would need to possess strong independent regulatory powers similar to those of national regulators.
And Pippo Ranci, a professor at the Catholic University of Milan and a specialist in regulatory affairs, questioned the effectiveness of the new agency. Ranci previously argued that ACER will likely be "not very useful", because it will be characterised by excessive bureaucratic "weight" without having strong regulatory powers.
The EU's energy market is plagued by under-investment in cross-border power transmission capacity and a lack of coordination between national regulators and transmission system operators (TSOs), who manage the technical transfer of gas and electricity between member states, according to a Commission impact assessment.
The Commission concluded that the problem "would be better addressed through the structure of a Community agency with strong involvement of all EU regulators", and a proposal for a regulation to establish ACER was put forward on 19 September 2007 as part of the Commission's third 'package' of proposals on energy liberalisation (see EurActiv's related news and LinksDossier).
ACER would not have any direct regulatory authority at national or European level according to the Commission's proposal. Rather it would have the power to intervene in cases where cross-border transactions are deemed anti-competitive or in the event that national regulators fail to cooperate effectively.
The Commission has also included calls to strengthen the powers and independence of existing national regulators, who will be mandated to cooperate with one another.
ERGEG and CEER, however, argue that "improved regulatory arrangements at national level, although of significant importance, will not, in themselves be sufficient to accelerate the process leading towards a single European energy market".
Philippe de Ladoucette, Chairman of the French Electricity Regulatory Commission, argued during the ITRE hearing that ACER "must be more than a simple advisory body" and called for increased powers, including possible scrutiny of the 10-year investment plans of TSOs.
But the Commission faces at least two major obstacles to increasing the power of ACER.
The first is political opposition by member states. "The option of setting up a single European regulator is premature at this stage and is likely to encounter strong resistance from a number of Member States and stakeholders", the Commission said in its impact assessment.
Second, the EU's treaties do not permit the Commission to grant powers on an agency or other body that the Commission itself does not possess, Professor Antonio Napolitano of the University of Naples explained during the ITRE Committee hearing.
