MEPs: Strong EU regulator key to energy market puzzle


The Commission should envisage greater powers for a new regulatory agency in its proposals on EU energy market liberalisation, according to MEPs in Parliament’s Industry (ITRE) Committee. 

Yesterday (28 May), MEPs voted by large majority in favour of three reports relating to the functioning of a more liberalised EU electricity and gas market. 

In his report on an ‘Agency for the Cooperation of Energy Regulators‘, UK Conservative MEP Giles Chichester argues that “if it is to contribute effectively to the development of an integrated competitive energy market for the European Union, [ACER] will need more extensive powers, independent of the Commission, to handle cross-border situations and deliver effective cooperation between [transmission system operators – TSOs] and national energy regulators”.

At issue is the extent to which ACER would be able to set and regulate not only technical codes for cross-border electricity transmission, but also to harmonise EU market rules governing grid access.

Currently, national TSOs adopt their own rules depending on specific national conditions, but TSOs have agreed to set up a European network of TSOs (ENTSO), both for electricity (ENTSO-E) and gas (ENTSO-G), in order to set and coordinate network access rules and grid investment plans. ACER, according to the Commission’s plans, would act as an advisory body to the ENTSOs.

But MEPs are not convinced that such an arrangement would be sufficient to guarantee fair market access in a more liberalised context.

The Commission’s proposal “does not correspond to the actual and natural division of competences at national level as the [TSOs] are given a quasi-regulatory status while [ACER] seems to be reduced to the role of an advisory body,” laments Spanish Christian Democrat MEP Alejo Vidal-Quadras in his report on ‘Conditions for access to the network for cross-border exchanges in electricity‘.

Vidal-Quadras and fellow ITRE Committee MEPs want ACER to have the final say over the approval and adoption of the grid access and market rules laid out by the ENTSOs. ACER should also have the right to scrutinise and possibly reject the grid investment plans set out by the ENTSOs, according to the MEPs.

And in the gas sector, the power of the ENTSO “should be limited to technical issues related to network third party access, security and reliability and interoperability rules [and] operational procedures,” according to Bulgarian Socialist MEP Atanas Paparizov, who authored the committee’s report on ‘Conditions for access to the natural gas transmission networks‘.

EU regulatory experts expressed similar views during a 24 January hearing in the ITRE Committee, suggesting that a consensus is emerging over the need to increase ACER’s powers. But the Commission has indicated that member states are unlikely to support a new EU agency with significant powers to regulate in areas traditionally under the competence of national TSOs and regulators.

On 19 September 2007, the Commission presented its proposals for a 'third package' of proposals to further liberalise the EU's energy market (EURACTIV LinksDossier and related coverage).

Included in the plans is a new Agency for the Cooperation of Energy Regulators (ACER), which would have decision-making power to review "on a case-by-case basis" decisions made by national regulators and ensure there is enough co-operation between network operators.

But, according to the Commission's plans, the agency's powers will be strictly limited to cross-border issues. "The agency is not a substitute for national regulators, nor is it a European regulator," the EU executive said.

  • 5 June: Rescheduled ITRE vote on the report on the Internal Market in Gas by Italian Leftist MEP Romano La Russa;
  • 16-19 June: Plenary vote on Chichester report on the agency;
  • 7-10 July: Plenary votes on Paparizov report on access to gas networks, on La Russa report on internal gas market and on Vidal-Quadras report on cross-border electricity exchanges. 

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