Compliance programme and compliance officer

TSOs are to establish and implement a compliance programme so as to ensure that discriminatory conduct to third parties is excluded. This compliance programme is then independently monitored by a compliance officer appointed by the supervisory body (subject to the approval by the regulatory authority). The compliance officer regularly reports to the regulatory authority and must report to the regulatory authority in certain cases, where for instance the parent company, via its members in the TSO’s supervisory body or general assembly, has prevented or delayed investments under the ten-year network development plan. The compliance officer may attend all meetings of the management or administrative bodies of the TSO and those of the supervisory body and general assembly, especially those concerned with issues such as investment, network access conditions, tariffs, capacity allocation and congestion management, transparency, balancing and secondary markets.

Cooling-off period

Staff are not allowed to work at the same time for an independent transmission operator (ITO) and the parent company. ITO staff are in no way allowed to receive remuneration from the parent company. To ensure an ITO’s complete independence, a cooling-off period of three years is set for persons exercising a “professional position or responsibility” or with an interest or business relationship, directly or indirectly, with the VIC. Only then can such persons be appointed to managerial positions in the ITO or to its administrative bodies. ITO managerial staff and members of its board have to observe a cooling-off period of at least four years if they wish to work for the parent company.

European Network of Transmission System Operators

The regulations on access to the network for cross-border exchanges in electricity and on access to the natural gas transmission networks both establish European Networks of Transmission System Operators. ENTSO-E, for electricity, and ENTSO-G, for gas, are to ensure “optimal management” of networks, regional cooperation and the development of European network planning. This includes elaboration of network codes, common network operation tools, a non-binding Community-wide ten-year network development plan as well as annual summer and winter generation adequacy outlooks.

Level playing field

Member states are allowed to take measures so as to ensure a “level playing field”. Such measures should be based on “overriding requirements of general interest”. The measures, however, have to be “compatible” with the Treaty, notably Article 30, and EU legislation in general. They should be “proportionate, non-discriminatory and transparent” and may only be put into effect following the notification to and approval by the Commission.

New infrastructure exemptions

An exemption may be granted by a national regulatory authority with Commission consent as to unbundling, third-party access and other market rules for major new gas infrastructure. Where the investment, such as interconnectors, LNG and storage facilities, is located in two or more countries, the Agency for the Cooperation of Energy Regulators should handle, as a last resort, the exemption request. The investment must enhance competition in gas supply and enhance security of supply. The investment would not take place unless an exemption was granted. The Commission’s approval of an exemption decision loses its effect two years from adoption if construction of the infrastructure has not yet started, and five years from its adoption if the infrastructure has not become operational. The Commission may, though, decide that delay is due to “major obstacles” beyond control of the exemption holder.

Supervisory Body

The supervisory body of an independent transmission operator (ITO) is composed of representatives from the parent company (or virtually integrated company – VIC), third party shareholders and, where relevant, other interested parties such as TSOs. It is in charge of taking decisions that may have a “significant” impact on the TSO share value approving annual and longer-term financial plans, TSO indebtedness and dividends distributed to shareholders. The supervisory body is, however, excluded from decisions relating to the day-to-day activities of the TSO and to network management as well as those activities necessary for the preparation of the ten-year network development plan.

Ten-year network development

Both gas and electricity transmission operators are to submit, to their national regulatory authority, a ten-year network development plan after consulting stakeholders. The plan is to guarantee the system’s adequacy and security of supply. It includes indications of the main transmission infrastructure to be built or upgraded over the next ten years as well as current and near-future investments. The national regulatory authority shall monitor and evaluate implementation of the development plan and may require that a TSO execute an investment.

Third-party access

Member states have to ensure transparent and non-discriminatory tariffs for access to networks. The directives set out measures aimed at ensuring that new energy suppliers have access to networks. Nonetheless, the directives do not preclude long-term contracts between major suppliers and users in so far as they comply with Community competition rules. Access to networks should only be refused on the basis of lack of capacity or system security.

Transmission system operators

Transmission system operators (TSOs) are responsible for operating and maintaining a grid or transmission system, its interconnections with other systems. They transport gas or electricity to local distribution systems. TSOs do not transport electricity or gas to household or small business customers. Distribution system operators (DSOs) are responsible for operating and maintaining local or regional networks that deliver electricity or gas to customers.