# C_2004241EN.01003101.xml

| 28.9.2004 | EN | Official Journal of the European Union | C 241/31 |
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28.9.2004

EN

Official Journal of the European Union

C 241/31

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Opinion of the European Economic and Social Committee on a ‘Proposal for a Regulation of the European Parliament and of the Council on conditions for access to the gas-transmission networks’

(COM(2003) 741 final – 2003/0302 (COD))

(2004/C 241/11)

On 23 January 2004 the Council decided to consult the European Economic and Social Committee, under Articles 95 and 251 of the Treaty establishing the European Community, on the ‘Proposal for a Regulation of the European Parliament and of the Council on conditions for access to the gas transmission networks’.

The Section for Transport, Energy, Infrastructure and the Information Society, which was responsible for preparing the Committee's work on the subject, adopted its opinion on 10 May 2004. The rapporteur was Mrs Sirkeinen.

At its 409th plenary session of 2 and 3 June 2004 (meeting of 2 June 2004), the European Economic and Social Committee adopted the following opinion by 154 votes for, one against and 10 abstentions.

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1.   Introduction

| 1.1 | The second gas-market Directive, adopted in June 2003, is expected to provide the necessary structural changes in the regulatory framework to tackle remaining barriers to the completion of the internal market for natural gas. The Directive provides for the right for all non-household gas consumers to freely choose their supplier by 1 July 2004 and all customers to have the same right by 1 July 2007. It also provides for third-party access to transmission and distribution networks on the basis of published and regulated tariffs, access to storage facilities on a negotiated or regulated basis, legal unbundling of transmission and large and medium-sized distribution companies and the establishment of a regulatory authority on each Member State. |
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1.1

The second gas-market Directive, adopted in June 2003, is expected to provide the necessary structural changes in the regulatory framework to tackle remaining barriers to the completion of the internal market for natural gas. The Directive provides for the right for all non-household gas consumers to freely choose their supplier by 1 July 2004 and all customers to have the same right by 1 July 2007. It also provides for third-party access to transmission and distribution networks on the basis of published and regulated tariffs, access to storage facilities on a negotiated or regulated basis, legal unbundling of transmission and large and medium-sized distribution companies and the establishment of a regulatory authority on each Member State.

| 1.2 | In order to meet the objective of an internal gas market, additional detailed measures are needed regarding the manner in which transmission systems are operated. For electricity, similar measures have been set in place by a Regulation adopted in June 2003. This Regulation provides for common tariff structures, including for cross-border trade, the provision of information on interconnection capacities and rules regarding congestion management. |
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1.2

In order to meet the objective of an internal gas market, additional detailed measures are needed regarding the manner in which transmission systems are operated. For electricity, similar measures have been set in place by a Regulation adopted in June 2003. This Regulation provides for common tariff structures, including for cross-border trade, the provision of information on interconnection capacities and rules regarding congestion management.

| 1.3 | The European Gas Regulatory Forum, with the aim to develop practical rules for transmission in the gas market, meets bi-annually in Madrid. The Forum consists of the Commission, Member States, national regulatory authorities and the gas industry and network users. The Forum agreed in February 2002 on Guidelines for Good TPA (Third Party Access) Practice, and on a revised, more detailed set of the Guidelines in September 2003. These guidelines are non-binding and agreed on a voluntary basis, but the transmission-system operators and other parties pledged to respect them. |
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1.3

The European Gas Regulatory Forum, with the aim to develop practical rules for transmission in the gas market, meets bi-annually in Madrid. The Forum consists of the Commission, Member States, national regulatory authorities and the gas industry and network users. The Forum agreed in February 2002 on Guidelines for Good TPA (Third Party Access) Practice, and on a revised, more detailed set of the Guidelines in September 2003. These guidelines are non-binding and agreed on a voluntary basis, but the transmission-system operators and other parties pledged to respect them.

| 1.4 | The Commission has monitored compliance with the Guidelines by transmission system operators, and reports that there remains an important and unacceptable level of non-compliance. According to the Commission, a level playing field in terms of access conditions to the gas-transmission network is far from being achieved. |
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1.4

The Commission has monitored compliance with the Guidelines by transmission system operators, and reports that there remains an important and unacceptable level of non-compliance. According to the Commission, a level playing field in terms of access conditions to the gas-transmission network is far from being achieved.

2.   The Commission proposal

| 2.1 | The aim of the Commission proposal is to strengthen the internal gas market by establishing a new regulatory framework for gas transmission at European level based on the conclusions of the most recent Madrid Forum. The proposed rules draw on the existing legislation for cross-border electricity exchanges, but go beyond the scope of that legislation in that they also cover network access and charging on gas-transmission networks within the individual Member States. |
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2.1

The aim of the Commission proposal is to strengthen the internal gas market by establishing a new regulatory framework for gas transmission at European level based on the conclusions of the most recent Madrid Forum. The proposed rules draw on the existing legislation for cross-border electricity exchanges, but go beyond the scope of that legislation in that they also cover network access and charging on gas-transmission networks within the individual Member States.

| 2.2 | The Regulation on Conditions for access to the gas-transmission networks provides for the adoption of detailed binding guidelines, based on the current Guidelines for Good Practice agreed at the Madrid Forum (except presently tariff questions) and covering:






  — | Third Party Access services to be offered by Transmission System Operators; |
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2.2

The Regulation on Conditions for access to the gas-transmission networks provides for the adoption of detailed binding guidelines, based on the current Guidelines for Good Practice agreed at the Madrid Forum (except presently tariff questions) and covering:

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Third Party Access services to be offered by Transmission System Operators;

| — | capacity allocation and congestion management, including use it or lose it and secondary trading mechanisms; |
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capacity allocation and congestion management, including use it or lose it and secondary trading mechanisms;

| — | transparency requirements; |
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transparency requirements;

| — | tariff structure and derivation, including balancing charges. |
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tariff structure and derivation, including balancing charges.

| 2.3 | The regulation also provides a method for the evolution of these Guidelines through Comitology. It requires national Regulators to ensure that the agreed guidelines are implemented. |
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2.3

The regulation also provides a method for the evolution of these Guidelines through Comitology. It requires national Regulators to ensure that the agreed guidelines are implemented.

3.   General remarks

| 3.1 | The aim of the proposed Regulation is to set fair rules for access to natural gas-transmission networks. The fundamental objectives for this is enhancing competition within the internal gas market and ensuring security of supply to all users, and hence observing the need to encourage investment in transmission infrastructure. Presently there is sufficient capacity in the gas-transmission networks in the EU, but this may change soon as gas demand is growing rapidly. The EU's growing dependence on gas supplies from non-EU countries, with the resultant supply and safety issues, makes it essential to manage and regulate gas-transport infrastructure. |
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3.1

The aim of the proposed Regulation is to set fair rules for access to natural gas-transmission networks. The fundamental objectives for this is enhancing competition within the internal gas market and ensuring security of supply to all users, and hence observing the need to encourage investment in transmission infrastructure. Presently there is sufficient capacity in the gas-transmission networks in the EU, but this may change soon as gas demand is growing rapidly. The EU's growing dependence on gas supplies from non-EU countries, with the resultant supply and safety issues, makes it essential to manage and regulate gas-transport infrastructure.

| 3.2 | The Guidelines of the Madrid Forum have existed since February 2002, and in their present amended form for more than half a year. Representatives of the gas-transmission business claim that this time span is too short to draw any conclusions concerning implementation, and would prefer to stay with a voluntary approach and national legislation based on the subsidiarity provided for in the second gas-market Directive. They underline the need for a reliable, stable and incentive-based regulatory framework in order to make investments possible and minimize risks for investors. |
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3.2

The Guidelines of the Madrid Forum have existed since February 2002, and in their present amended form for more than half a year. Representatives of the gas-transmission business claim that this time span is too short to draw any conclusions concerning implementation, and would prefer to stay with a voluntary approach and national legislation based on the subsidiarity provided for in the second gas-market Directive. They underline the need for a reliable, stable and incentive-based regulatory framework in order to make investments possible and minimize risks for investors.

| 3.2.1 | A relevant question is whether a main reason for delays in implementation is genuine inability of the operators to adjust. To this the Commission observes that in several Member States the adjustment has been made within the given time frame. |
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3.2.1

A relevant question is whether a main reason for delays in implementation is genuine inability of the operators to adjust. To this the Commission observes that in several Member States the adjustment has been made within the given time frame.

| 3.2.2 | Another observation regarding the pace of adjustment is that a Regulation on access to electricity transmission cross-border networks was approved in mid 2003, complementing the electricity market Directive approved at the same time as the gas market Directive. |
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3.2.2

Another observation regarding the pace of adjustment is that a Regulation on access to electricity transmission cross-border networks was approved in mid 2003, complementing the electricity market Directive approved at the same time as the gas market Directive.

| 3.3 | Taking these arguments into account, the EESC welcomes the Commission proposal for a Regulation on conditions for access to gas-transmission networks. The Committee has, however, some comments to make concerning the contents of the draft Regulation. |
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3.3

Taking these arguments into account, the EESC welcomes the Commission proposal for a Regulation on conditions for access to gas-transmission networks. The Committee has, however, some comments to make concerning the contents of the draft Regulation.

| 3.4 | The scope of the draft Regulation is one issue for discussion: Should it cover all transmission within the EU or only cross-border transmission? Should it also include storage facilities? The EESC would like the regulation to permit the completion of a stable, effective and harmonised regulatory framework for the internal gas market, including compliance with the principle of subsidiarity and the development of exchanges. With this in mind, and in accordance with the political agreement on which the directive is based, guidelines on the access to storage facilities should be negotiated as soon as possible in the Madrid Forum. |
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3.4

The scope of the draft Regulation is one issue for discussion: Should it cover all transmission within the EU or only cross-border transmission? Should it also include storage facilities? The EESC would like the regulation to permit the completion of a stable, effective and harmonised regulatory framework for the internal gas market, including compliance with the principle of subsidiarity and the development of exchanges. With this in mind, and in accordance with the political agreement on which the directive is based, guidelines on the access to storage facilities should be negotiated as soon as possible in the Madrid Forum.

| 3.5 | A key issue is how to prepare and decide on modifications to the rules provided for in the Regulation. The Commission proposes that it shall be assisted by the Committee set up by Article 13 of the Regulation on conditions for access to the network for cross-border exchanges in electricity. The present rules have been agreed upon in the Madrid Forum, where the transmission system operators and network users are represented. Their involvement should be guaranteed also in the future by recognising in the Regulation that future modifications will be based on agreements at the Madrid Forum by making, for instance, an addition to Article 14 or the recitals. |
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3.5

A key issue is how to prepare and decide on modifications to the rules provided for in the Regulation. The Commission proposes that it shall be assisted by the Committee set up by Article 13 of the Regulation on conditions for access to the network for cross-border exchanges in electricity. The present rules have been agreed upon in the Madrid Forum, where the transmission system operators and network users are represented. Their involvement should be guaranteed also in the future by recognising in the Regulation that future modifications will be based on agreements at the Madrid Forum by making, for instance, an addition to Article 14 or the recitals.

4.   Detailed comments

| 4.1 | With a view to facilitating amendments to the guidelines and avoid the need to soon amend the text of the Regulation itself, the Definitions (Article 2) could be complemented so as to take account of foreseeable changes in the guidelines. |
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4.1

With a view to facilitating amendments to the guidelines and avoid the need to soon amend the text of the Regulation itself, the Definitions (Article 2) could be complemented so as to take account of foreseeable changes in the guidelines.

4.2   Charges for access to networks (Article 3)

Article 3(1) stipulates, among other things, that the charges must reflect effectively incurred costs, including appropriate return on investment. The Committee would endorse that provided the costs involved are specified as ‘efficient, economic costs’, as that should mean that customers can expect reasonable tariffs.

Article 3(1) goes on to say that this must be done ‘where appropriate taking regard to international benchmarking of tariffs’. The Committee feels that the wording used here is vague, and questions whether it is in customers' interests. The Committee therefore proposes deleting this phrase.

| 4.3 | Article 14 should be amended by adding the involvement of stakeholders to the proposed comitology procedure. |
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4.3

Article 14 should be amended by adding the involvement of stakeholders to the proposed comitology procedure.

| 4.4 | When monitoring the implementation of the Regulation the Commission should also bring in the views of all stakeholders. This should be taken into account in Article 15. |
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4.4

When monitoring the implementation of the Regulation the Commission should also bring in the views of all stakeholders. This should be taken into account in Article 15.

| 4.5 | The relevant networks points, on which information must be published, are now defined in the Annex (3.2.) of the draft Regulation. These definitions, which are vital for transparency, should be included as an Article into the body of the Regulation text in order to make amendments to them possible only by co-decision. |
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4.5

The relevant networks points, on which information must be published, are now defined in the Annex (3.2.) of the draft Regulation. These definitions, which are vital for transparency, should be included as an Article into the body of the Regulation text in order to make amendments to them possible only by co-decision.

| 4.6 | The Committee stresses the sensitive, strategic nature of gas infrastructure: balancing of networks, pressure thresholds at nodes, development of infrastructure for transporting gas by pipeline or liquefaction, consideration of saturation thresholds. The Community regulation should provide means and measures to facilitate forward planning and proper regulation by operators in this area. |
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4.6

The Committee stresses the sensitive, strategic nature of gas infrastructure: balancing of networks, pressure thresholds at nodes, development of infrastructure for transporting gas by pipeline or liquefaction, consideration of saturation thresholds. The Community regulation should provide means and measures to facilitate forward planning and proper regulation by operators in this area.

Brussels, 2 June 2004.

The President

of the European Economic and Social Committee

Roger BRIESCH

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