Explanatory Memorandum to COM(2003)741 - Conditions for access to the gas transmission networks - Main contents
Please note
This page contains a limited version of this dossier in the EU Monitor.
| dossier | COM(2003)741 - Conditions for access to the gas transmission networks. |
|---|---|
| source | COM(2003)741  |
| date | 10-12-2003 |
On 26th June 2003, the European Parliament and the Council adopted Directive 2003/55/EC concerning common rules for the internal market in natural gas and repealing Directive 98/30/EC. While Directive 98/30/EC, the 1st Internal Market Directive, took the first relatively tentative steps towards the creation of the internal market for gas, the second Directive is expected to provide the necessary structural changes in the regulatory framework to tackle remaining barriers to the completion of the internal market.
Contents
* The right for all non-household gas customers to freely choose their supplier no later than 1 July 2004 with all customer to have this right by 1 July 2007.
* Third party access to transmission and distribution networks on the basis of published and regulated tariffs;
* The establishment of a regulatory authority in each Member State with a common minimum set of responsibilities;
* Legal unbundling of transmission and large and medium sized distribution companies;
* Access to storage facilities either on a negotiated or regulated basis.
By this, the Directive will provide the basic structural reforms necessary to develop the gas internal market. However, without additional detailed measures regarding the manner in which transmission systems are operated, the objectives set by the Community in this context are unlikely to be met.
The principle to supplement the internal energy market directives through a regulation detailing basic principles and implementation measures of certain key subjects considered necessary for the well functioning of the internal energy market has already been acknowledged by the Council. It adopted Regulation (EC) 1228/2003 of the European Parliament and Council on conditions for access to the network for cross-border exchanges in electricity. This Regulation provides for common tariff structures (including tariffs for cross-border electricity trade), the provision of information on interconnection capacities and rules regarding congestion management.
Taking into account the differences between electricity and gas, similar rules concerning principles and implementation measures are necessary for the internal gas market, too. This has been recognised by the Commission, Member States, national regulatory authorities, as well as the gas industry and network users. Consequently, the European Gas Regulatory Forum, which meets bi-annually in Madrid, agreed already in February 2002 (5th meeting of the Forum) on a set of guidelines (usually referred to as 'Guidelines for Good TPA Practice') which transmission system operators pledged to respect. These guidelines were non-binding and agreed on a voluntary basis.
The Forum is chaired by the Commission and attended by representatives of national regulatory authorities, Member States, representatives of network operators and users as well as gas consumers. In recent meetings, representatives of Russia participated, too, in the context of the EU-Russia Energy Dialogue. The Forum seeks to develop technical rules relevant to the completion of the internal gas market by consensus.
In a first compliance report presented to the Forum in October 2002, the Commission stated some achievements and progress in complying with the first Guidelines agreed in February 2002. However, it also observed
* a significant lack of compliance with the Guidelines
* a significant degree of uncertainty about compliance with the Guidelines
* significant differences in compliance with the Guidelines and in access conditions in general between individual system operators.
As a consequence, the Commission proposed a more detailed and comprehensive set of guidelines for adoption through the Forum. Between October 2002 (6th meeting of the Madrid Forum) and September 2003 (7th meeting of the Madrid Forum), this revised set of the 'Guidelines for Good TPA Practice' (GGP2) has been intensively and extensively discussed At the 7th meeting of the Forum, it accepted a revised set of Guidelines for Good TPA Practice.
It is important to note that while the second report on compliance with the first set of the Guidelines presented at the 7th meeting of the EU Gas Regulatory Forum in September 2003 indicated a significant improvement in terms of compliance with the Guidelines, there remained an important and unacceptable level of non-compliance. As a consequence, a level playing field in terms of access conditions to the gas transmission network is far from being achieved. The way access conditions are designed predetermines the starting point for competition to develop. Thus, insufficiently developed and asymmetric access conditions are currently detrimental to a well functioning internal European market for natural gas. Implementing the revised Guidelines for Good TPA Practice, as agreed in September 2003, would result in access conditions to the network compatible to the requirements of such a market.
For this reason, it is obvious that the internal market for natural gas can only work effectively, if access conditions to the network across the single market correspond to certain minimum standards on key aspects of Third Party Access. Such standards are essential, in order to ensure a level playing field and allow exploiting business opportunities also for new market entrants and small companies. Conditions on access to the network must not discriminate against different scales of network users, since this could lead to distortion of competition and would in any case prevent gas consumers to equally benefit from the internal market of natural gas.
Network users requesting access to the network must be able to rely on a sufficient level of transparency needed to carry out their business, as otherwise business opportunities emerging from short and long term market developments could not be exploited. Effective and efficient congestion management procedures as well as basic rules for secondary markets would be supplementary in this respect and would, in addition, contribute to an efficient use of the network. A certain range of services - flexible in duration and starting dates, firm and interruptible at reasonable tariffs, while standardised to the most possible extent - also represents an indispensable prerequisite for market participants to reap the potential benefits of the internal market for natural gas.
In order to provide for mechanisms further promoting non-discrimination and competition, which is based on Third Party Access and thus access conditions to the network, basic principles on access charges and balancing rules/balancing charges are necessary. Such principles are also crucial for the creation of a level playing field for all players on the single EU market for natural gas and would facilitate the entry into the market for new players. It is worth underlining again that all stakeholders in the Madrid Forum have accepted a set of rules contained in the revised set of Guidelines for Good TPA Practice, which fully complies with those requirements of conditions for access to the network.
Therefore, it is necessary to ensure that the new Guidelines are fully applied by all transmission system operators across the EU internal market for natural gas. Representatives of all associations representing network users at the 7th EU Gas Regulatory Forum asked the Commission to ensure proper implementation of the Guidelines with a view to guaranteeing the highest possible level of compliance in the light of EU legislation. The rules and principles contained in the Guidelines should therefore form the basis of a new Regulation on conditions for access to gas transmission networks. This Regulation should be equivalent and procedurally the same, as the Regulation on access to the network for cross-border exchanges in electricity.
Like the Regulation on access to the network for cross-border exchanges in electricity, this Regulation should provide a set of basic principles to be respected. Detailed implementing rules should be contained in guidelines annexed to the Regulation, which can be modified pursuant to a Committee procedure foreseen in Article 5 and 7 of Council Decision 1999/468/EC i, usually known as the regulatory Comitology procedure.
It is important in this respect that the Regulation is an instrument that permits these guidelines to be evolved and completed. For example, as recognised at the September 2003 meeting of the European Gas Regulatory Forum, detailed work now needs to progress on the issue of contractual congestion management ("use-it-or-lose-it") rules. The 'regulatory comitology' procedure provides for such a mechanism.
However, the consensus based approach of the European Gas Regulatory Forum needs to be maintained within the context of the regulatory comitology procedure. The Forum should remain the basis for preparing new or revised guidelines. It is therefore appropriate to give legal recognition to this Forum within this Regulation, and to give it a formal consultative role in the preparation and discussion of guidelines.
Similarly, national regulatory authorities play a vital role in preparing any such guidelines. In addition to the leading role played by them in the European Gas Regulatory Forum, it is appropriate that the new European Energy Regulatory Group, established by Commission decision 2003/796/EC of 11 November 2003 i, also plays a formal consultative role in the preparation of guidelines.
The second set of the 'Guidelines for Good TPA Practice', which were accepted by all participants at the 7th meeting of the EU Gas Regulatory Forum in September 2003, cover the following:
* The criteria according to which charges for access to the network are determined, to ensure that they take fully into account the need for system integrity and reflect effectively incurred costs.
* A common minimum set of third party access services - regarding notably for example the duration of transportation contracts offered and on an interruptible basis.
* Common rules regarding contractual congestion of networks that balance the need to free up unused capacity with the rights of the holders of the capacity to use it when necessary.
* Information in particular on technical requirements and available capacity.
* Rules ensuring that transmission system operators operate balancing systems in a manner compatible with the internal market.
* Common basic requirements regarding the trading of primary rights to capacity.
* Charges for access to networks
* Third Party access services
* Capacity allocation mechanism and congestion management procedures
* Transparency requirements
* Balancing and imbalance charges
* Secondary markets
Measures implementing these principles are contained in the guidelines annexed to the Regulation. As mentioned above, a comitology procedure with preceding consultations of the EU Gas Regulatory Forum and the European Regulators Group for Electricity and Gas will ensure updated guidelines in line with the needs of the market.