COMMISSION OF THE EUROPEAN COMMUNITIES 
C0M(93) 643 final - COD384 
COD385 
Brussels, 07.12.1993 
Amended proposal for a 
EUROPEAN PARLIAMENT AND COUNCIL DIRECTIVE COD384 
concerning common rules for the internal market 
in electricity 
Amended proposal for a 
EUROPEAN PARLIAMENT AND COUNCIL DIRECTIVE COD385 
concerning common rules for the internal market 
in natural gas 
(presented by the Commission pursuant to Article 189a(2) of the EC Treaty) 
COMPLETION OF THE INTERNAL MARKET IN ELECTRICITY AND GAS 
AMENDED PROPOSALS 
A. GENERAL EXPLANATORY MEMORANDUM 
I. Background 
1. In accordance with Article 8a of the EEC Treaty (Article 7a of the 
Union Treaty) the Commission submitted two proposals for directives on 
21 February 1992 concerning common rules for the internal market in 
electricity and common rules for the internal market in natural gas.1 
2. These two proposals contained the following points: 
introduction of a transparent and non-discriminatory system of 
licences for the production of electricity and the construction of 
electricity and gas lines; 
introduction of an initial stage of limited access to the network 
for private producers to cover their own needs, for major 
customers exceeding certain consumption thresholds and suppliers 
under certain conditions; 
operating rules for transmission and distribution networks in 
order to guarantee the smooth functioning of the internal market; 
unbundling of management and unbundling of accounts n a harmonized 
basis as regards vertically integrated companies; 
safeguard provisions, especially for "take or pay" contracts in 
natural gas. 
1 C0M(91)548 final. 
In keeping with the principle of subsidiarity, the Member States 
remained responsible for setting captive consumer tariffs, for 
granting exclusive supply licences for consumers below the thresholds, 
for establishing public service obligations, for defining detailed 
licensing criteria and, more generally, for pursuing national energy 
policy object ives. 
These proposals made up the second stage of a three-stage approach, 
the first stage being implementation of the directives adopted in 1990 
and 1991 on the transit of gas and electricity and the transparency of 
prices of gas and electricity to the industrial end user. The third 
stage was to be defined in the light of the experience gained and was 
meant to increase the flexibility of the internal energy market. 
3. These proposals have been discussed in depth both with the other 
Community institutions and with the economic and industrial sectors. 
Third-party access to the network was discussed at length, both at a 
technical level in the advisory committees representing the Member 
States, the energy industry and consumers and at a policy level in 
numerous bilateral meetings with the ministers responsible for energy, 
the Council of Ministers and the European Parliament. 
4. The Council discussed these proposals in May and November 1992 and in 
June this year. In its conclusions of 30 November 1992 the Council 
said the gas and electricity markets had to be more open, more 
transparent, more efficient and more competitive, bearing in mind the 
specific natures of the two sectors and the respective situations in 
the various Member States. 
The Council stressed that the obstacles to the internal market still 
had to be removed and that fresh progress had to be made. The 
internal market, It said, had to comply with six principles: security 
of supply, environmental protection, protection of small consumers, 
transparency and non-discrimination, recognition of the differences 
between national systems and transitional provisions. There were 
still differences of opinion on some of the key points of the 
Commission's proposals, especially concerning the general mechanisms 
of third-party access to the network. 
The Council invited the Commission to consider modifications to its 
proposals in the light of the Council's discussions and of the opinion 
of the European Parliament, concluding that discussions had. to 
continue. . # 
Last June the Council confirmed these conclusions and, pending the 
opinion of the European Parliament, looked forward that the new points 
put forward by the Commission (in particular the introduction of à 
system of negotiated network access rather than a regulated system) 
would be taken into account. 
5. The Economic and Social Committee delivered its opinion on 
27 January 1993.2 This endorsed the ultimate objective and several 
aspects of the Commission's proposals, but rejected the system and 
timetable for third-party access to the network. 
6. Parliament delivered its opinion at its plenary session of 
17 November 1993. The amendments put forward by Parliament are based 
on the following principles: 
the need for greater harmonization to accompany the gradual 
opening-up of the gas and electricity sectors during the 
transitional period plus the need for prior harmonization, in 
particular in the fields of environment and taxation, as a 
precondition to any further liberalization; 
definition of responsibilities incumbent upon the Member States, 
in particular as regards the public service obligations of gas and 
electricity companies-, 
obligation of the Member States to create a control body called 
"Electricity and gas council"; 
protection of the concession rights of State, local and regional 
authorities and maintenance of the monopoly of distributors in 
their respective area; 
2 CES 77/93. 
liberalization of the production and transport of electricity in 
two alternative ways: either a system based on a tendering 
procedure for new capacities or a system based on the granting o-f 
transparent and non-discriminatory licences; 
access of the competent authorities of the Member States to the 
internal accounts of gas and electricity companies, and 
establishment of a Directive on cost transparency; 
negotiated access to networks to allow large industrial consumers 
to benefit from the direct supply of gas and electricity". For 
distribution companies this option is limited only to the sector 
of electricity and only to those Member States which have a 
licensing system for the construction of production and transport 
facilities. It is not therefore open to distribution companies in 
Member States which have opted for the tendering system and 
central planning. 
II. Amended proposals 
7. Objectives of the amended proposals: the Commission takes the view 
that opening up the energy market should make for greater integration 
of the gas and electricity markets, which so far have been limited to 
national or regional level, and for greater competitiveness among 
Community companies. Energy is a major production cost factor and the 
competitiveness of companies which consume energy is a precondition 
for turning round the current trends on the Job market. That said, 
energy cannot fulfil this role until the specific aspects of the gas 
and electricity sectors are taken fully on board, these being the 
"natural" monopoly of transport networks and the size and lead time of 
investments. 
8. How the gas and electricity markets operate has to be compatible with 
all the provisions of the Treaty. The Commission's amended proposals 
are as fol lows: 
questioning of exclusive or special rights where they affect trade 
between Member States; 
- fair access of the various operators to these markets. It is not 
acceptable in the context of an internal market that undertakings 
in a Member States where the market in electricity and gas i-s 
closed to competition can carry out their activities oh open 
markets in other Member States without the reverse being possible-, 
taking account of the specific nature of these two sectors on the 
basis of a pragmatic approach permitting gradual evolution of the 
way they operate while having a real impact on the market place 
from the outset. 
9. Amendments to the proposals: 
The two main amendments concern 
the possibility of allowing the producers of electricity and gas 
to negotiate access to the network; this possibility replaces the 
regulated access provided for in the initiai proposals. It is 
accompanied by arbitration mechanisms in the event of problems in 
negotiation or in performance of the contract, although these 
mechanisms cannot replace the appeal procedures provided by 
Community law; 
the establishment in the body of proposals of a work programme 
enabling the Commission to draw up, during the second stage, the 
harmonization proposals needed for the smooth functioning of the 
market without compromising Community law. 
The amended proposals introduce tendering procedures for new 
electricity transport and production capacities as alternatives to a 
transparent and non-discriminatory licensing system plus simpler 
network operating rules. 
Finally, there are amendments resulting from the entry into force of 
the Union Treaty and the introduction in this sector of the co-
decision procedure. 
10. The Commission could not accept a number of amendments which would 
have compromised the aims of the proposals and even their 
compatibility with the Treaty, namely: 
the obligation of the Member States to create an Electricity and 
gas council (consisting of representatives from undertakings in 
the sector, distribution companies, large industrial consumers, 
sma 11 and med i urn 
consumers and trade union organizations) designed to help the 
respective authorities implement the Directives; 
the conditional link between passage to the final stage and prior 
harmonization, in particular in the sectors of environment and 
taxât ion-, 
the parts which could undermine the independence of the tendering 
procedures by conferring special responsibilities on the system 
operator in these procedures, thereby making him judge and judged 
at one and the same time; 
the introduction of separate accounting solely between the 
activities of production and transmission, on the one hand, and 
distribution on the other, thus, without separating the 
transmission activities; 
maintenance of the supply monopoly of distribution companies. 
B. AMENDED PROPOSAL CONCERNING ELECTRICITY 
11. In line with the Commission's general approach to the dossier as a 
whole, the main changes made to the proposal on the internal 
market in electricity are as follows: 
(a) The structure of the proposal: to take account of the fact that 
the rules of access to the network are now specific rules 
concerning production, transport and distribution, a special 
chapter is included. 
(b) Greater reference to public service obligations: although the 
Treaty itself protects de facto and de lure performance of the 
special task assigned to the undertakings entrusted with the 
operation of services of general economic interest, the amended 
proposal accepts the amendments from Parliament which highlight 
the performance of these tasks in every phase of opening up the 
market to competition. 
(c) The conditions for third-party access to networks: while 
Parliament would like this to be solely in the form of long-term 
contracts with large consumers the Commission takes the view that 
these restrictions are not justified, one, because it is always 
possible to refuse access to third parties where the performance 
of the service of general economic interest assigned to the system 
operator is compromised and, two, because distribution companies 
must be able to take advantage of the same possibilities as large 
consumers so that small and medium-sized consumers can benefit 
indirectly from the advantages of an open market. Third-party 
access, which was regulated in the Commission's initial proposal, 
is a right open to autoproducers for the supply of their own 
establishments and branches and to producers and transmitters for 
the supply of large industrial consumers and distribution 
companies. The conditions for exercising this right have to be 
negotiated both with the transmission system operator and with the 
distribution system operator, except where the supply of 
electricity arises out of a tendering procedure for the 
construction of production capacities; in this case access to the 
network is guaranteed. Disputes in the negotiation or the 
performance of such contracts can be submitted to arbitration to 
be established by the Member State. As far as Parliament's 
amendments are concerned, the Commission states quite clearly that 
recourse to arbitration can in no way affect the right of the 
parties to use the normal appeal procedures provided by Community 
law. 
(2) 
(d) The criteria and procedures for authorizing production and 
transport are simplified and completed by the option of a 
tendering system for all new production and transport capacities. 
The amended proposa.! reinforces the independence and non­
discriminatory nature of this procedure. Nonetheless, the 
licensing system will apply to all autoproducers and independent 
producers. 
(e) The unbundling of management is dropped although independence, at 
least at the administrative level of the system operator, must be 
guaranteed. The unbundling of accounting on a harmonized basis is 
maintained and completed by way of a provision permitting access 
of the respective authorities to internal company accounts. 
(f) The rules governing the operation of transmission and supply 
networks are simplified. 
12. The amended proposal takes account of the six principles put 
forward by the Council as follows: 
security of supply: the criteria for authorizing the construction 
of production capacities will expressly permit the Member States 
to determine the nature of the primary sources used to produce 
electricity. The alternative system of a tendering procedure for 
production and transport capacities will allow for continued 
central planning of investments in Member States opting for this 
system; 
environmental protection: provisions concerning the harmonization 
of production and operating conditions take account of the 
requirement for environmental protection, as do the criteria for 
authorizing the construction of new production and transport 
capacities. A special provision also allows the system operator 
when dispatching production installations to give priority to 
production installations using renewable sources of energy or 
waste or using a combined heat and power process; 
protection of small consumers: greater reference to public 
service obligations has been introduced in order better to take 
account of the need to protect small and medium consumers. The 
system operator may refuse access to a third party where such an 
operation would prevent him from performing the public service 
obligations assigned to him. Member States will always have the 
right to set tariffs for all captive consumers; 
transparency and non-discrimination: these can be found in the 
rules governing the unbundling of accounting and in the criteria 
and procedures for authorizing new production and transport 
capacities, in the criteria and procedures for tendering and in 
the rules governing the system operators-, 
recognition of differences between national systems: the option 
of Member States to choose between a transparent and non­
discriminatory licensing system for the construction of new 
production and transport capacities, on the one hand, and a 
tendering procedure, on the other, takes account of the existence 
of decentralized systems in some Member States and centralized 
systems in others-, 
provisions for a period commencing 1 July 1994 and ending on 
31 December 1998 have been retained. 
C. AMENDED PROPOSAL CONCERNING GAS 
13. The changes to the proposal concerning the internal market in gas 
are, mutatis mutandis, the same as for electricity as regards: 
the structure of the proposal; 
the greater reference to public service obligations; 
the conditions of third-party access to networks; 
unbundling and access to internal company accounts; 
simplified rules concerning the operation of transmission and 
distribution networks-, 
compliance with the principles put forward by the Council. 
10 
14. The criteria and procedures for authorizing the construction or 
operation of LNG installations, storage installations, 
transmission and distribution lines and associated equipment are 
maintained. 
D. CONCLUSIONS 
The amended proposals take account of several key elements contained in 
the opinion of the European Parliament and of the concerns expressed by 
the Council, in particular in its conclusions of 30 November 1992. The 
Commission therefore asks the Council to adopt a position as soon as 
possible on these proposals for completing the internal market in the 
sectors of gas and electricity. 
11 
Amended proposal for a 
EUROPEAN PARLIAMENT AND COUNCIL DIRECTIVE 
concerning common rules for the internal market in electricity 
THE COUNCIL OF THE EUROPEAN 
COMMUNITIES, 
Having regard to the Treaty establishing 
the European Economic Community, and 
in particular Article 57(2), Article 66 and 
Article 100a thereof, 
Having regard to the proposal from the 
Commission, 
In cooperation with the European 
Parliament, 
Having regard to the opinion of the 
Economic and Social Committee, 
Whereas it is important to adopt measures 
with the aim of establishing the internal 
market as provided for in Article 8a of the 
Treaty; whereas the internal market is to 
comprise an area without internal frontiers 
in which the free movement of goods, 
persons, services and capital is ensured; 
Whereas the establishing of the internal 
market in electricity is particularly 
important both in order to increase 
efficiency in the production, transmission 
and distribution of this product, while 
reinforcing the Community's security of 
supply, and in order to ensure that all 
users are able to purchase electricity on an 
equal basis thus avoiding distortions of 
competition in user industries; THE EUROPEAN PARLIAMENT AND 
THE COUNCIL OF THE EUROPEAN 
UNION, 
Having regard to the Treaty establishing 
the European Community, and in 
particular Article 57(2), Article 66 and 
Article 100a thereof, 
Having regard to the proposal from the 
Commission, 
Having regard to the opinion of the 
Economic and Social Committee, 
Whereas it is important to adopt measures 
with the aim of establishing the internal 
market as provided for in Article 7a of the 
Treaty; whereas the internal market is to 
comprise an area without internal frontiers 
in which the free movement of goods, 
persons, services and capital is ensured; 
Whereas the establishing of the internal 
market in electricity is particularly 
important in order to increase efficiency in 
the production, transmission and 
distribution of this product, while 
reinforcing the Community's security of 
supply; 
12 
Whereas the establishing of the internal 
electricity market needs to be progressive 
and to be implemented in phases in order 
to enable industry to ajust in a flexible 
and ordered manner to its new 
environment; 
Whereas Council Directives 90/547/EEC 
of 29 October 1990 on the transit of 
electricity through transmission grids(1) and 
90/377/EEC of 29 June 1990 concerning a 
Community procedure to improve the 
transparency of gas and electricity prices 
charged to industrial end-users(2) provide 
for a first phase for the completion of the 
internal electricity market; 
Whereas it is now necessary to take 
further measures with a view to the 
establishing of the internal market for 
electricity; 
(1) OJNoL 313, 13.11.1990, p. 30. 
(2) OJ No L 185, 17.7.1990, p. 16. Whereas the establishing of the internal 
electricity market needs to be progressive 
and to be implemented in phases in order 
to enable industry to adjust in a flexible 
and ordered manner to its new 
environment; 
Whereas the establishing of the internal 
market in the electricity sector should 
favour the interconnection and 
interoperability of systems; 
Whereas Council Directives 90/547/EEC 
of 29 October 1990 on the transit of 
electricity through transmission grids(1)and 
90/377/EEC of 29 June 1990 concerning a 
Community procedure to improve the 
transparency of gas and electricity prices 
charged to industrial end-users(2), as 
amended by Commission Directive 
93/87/EEC(3) provide for a first phase for 
the completion of the internal electricity 
market; 
Whereas it is now necessary to take 
further measures with a view to the 
establishing of the internal market for 
electricity; 
Whereas security of supply and consumer 
protection entail a number of public 
service obligations of general interest 
which free competition, left to itself, 
cannot be relied upon to fulfil; 
(1) OJNoL313, 13.11.1990, p. 30. 
(2) OJ No L 185, 17.7.1990, p. 16. 
(3) OJ No L 277, 10.11.1993, p. 32. 
13 
Whereas the need to ensure a real 
opening-up of the market and a fair 
balance in the application of these 
measures requires the introduction of 
harmonized criteria and procedures for the 
construction and operation of generating 
installations; whereas these criteria and 
procedures must be objective, transparent 
and non-discriminatory in order to ensure 
that there is no distortion of competition 
arising in particular, from special 
conditions as regards the location of 
generating installations within the 
Community and their proximity to the 
market; 
Whereas it is therefore necessary to 
establish common rules for the licensing 
by Member States of the construction and 
operation of generating installations and 
transmission and distribution lines and to 
take such other steps as are required in 
order to ensure the effective functioning 
of the internal market; 
Whereas the establishing of the internal 
market for energy, more particularly in the 
electricity sector, will take into account 
the objective of economic and social 
cohesion; 
Whereas electricity undertakings must, in 
the internal market, be able to operate on 
normal commercial principles; Whereas the need to ensure a real 
opening-up of the market and a fair 
balance in the application of these 
measures now requires the introduction of 
harmonized criteria and procedures for the 
construction and operation of generating 
installations; whereas these criteria and 
procedures must be objective, transparent 
and non-discriminatory; 
Whereas it is therefore necessary to 
establish common rules for the production, 
transmission and distribution of electricity; 
Whereas in establishing of the internal 
market for electricity full account should 
be taken of the Community objective of 
economic and social cohesion, particularly 
in sectors such as the infrastructures, 
national or intracommunity, which serve 
for the transmission of electricity; 
Whereas electricity undertakings must, in 
the internal market, be able to operate, 
without prejudice to constraints connected 
with public service obligations, on normal 
commercial principles; 
14 
Whereas provision should be made for 
customers and producers of electricity to 
have access to the transmission and 
distribution systems without discrimination 
and subject to the availability of capacity 
and in return for reasonable remuneration 
; whereas this provision may be limited 
during the next phase by Member states to 
large industrial companies and with regard 
to distribution companies under certain 
conditions; 
Whereas each transmission system must 
be subject to central management and 
control in order to ensure the security and 
reliability of the system in interests of 
producers and customers; whereas a 
transmission system operator should 
therefore be designated and entrusted with 
the management and development of the 
system; whereas the transmission system 
operator must behave in an objective, 
transparent and non-discriminatory manner 
in all aspects of his operation, including 
the approval of connections to the system, 
charges paid for services provided and 
dispatching of generating installations; 
Whereas for similar reasons a distribution 
system operator must be designated to 
manage and develop each distribution 
system; 
Whereas the conditions for connection to 
the transmission and distribution systems 
must be defined by reference to European 
specifications where possible or to other 
international standards and specifications; Whereas whatever the nature of the 
prevailing market organisation, access to 
the system must be open to producers and 
autoproducers, together with the customers 
connected to the system, in conformity 
with this Directive; 
Whereas each transmission system must 
be subject to central management and 
control in order to ensure the security and 
reliability of the system in the interests of 
producers and customers; whereas a 
transmission system operator should 
therefore be designated and entrusted with 
the management and development of the 
system; whereas the transmission system 
operator must behave in an objective, 
transparent and non-discriminatory 
manner; 
Whereas at the level of distribution, 
concessionary rights of local, regional or 
State bodies may be granted and a 
manager must be designated to manage 
and develop each distribution system; 
Whereas the conditions for connection to 
the transmission and distribution systems 
must be defined by reference to European 
specifications where possible or to other 
international standards and specifications; 
15 
Whereas principles of charging should be 
clearly laid down in order to ensure fair 
and transparent conditions for the use of 
transmission and distribution systems; 
Whereas in order to ensure transparency 
and non-discrimination the transmission 
and distribution functions of vertically 
integrated undertakings should be operated 
as separate divisions with separate 
accounts; whereas the accounts of all 
electricity undertakings should provide for 
maximum transparency in particular to 
identify possible abuses of dominant 
position, consisting for example in 
abnormally high or low tariffs or in 
discriminatory practices relating to 
equivalent transactions; 
Whereas provision must be made for 
safeguards and dispute resolution 
procedures; Whereas in order to ensure transparency 
and non-discrimination the transmission 
function of vertically integrated 
undertakings should be operated 
independently from the other activities; 
whereas the accounts of all electricity 
undertakings should provide for maximum 
transparency, in particular to identify 
possible abuses of a dominant position, 
consisting for example in abnormally high 
or low tariffs or in discriminatory 
practices relating to equivalent 
transactions; whereas to this end the 
accounts must be separate for each 
activity; 
Whereas it is also necessary to provide for 
access by the competent authorities to the 
internal accounting documents of 
undertakings without thereby 
compromising commercial confidentiality; 
Whereas provision must be made for 
safeguards and dispute resolution 
procedures; 
16 
(3) 
Whereas, in accordance with the principle 
of subsidiarity, general principles 
providing for a framework must be 
established at Community level, but their 
detailed implementation should be left to 
Member States, thus allowing each 
Member State to choose the regime which 
corresponds best to its particular situation; 
whereas therefore Member States should, 
subject to the Treaty provisions and those 
made thereunder, remain free to determine 
the detailed criteria for licensing the 
construction of power stations and of 
transmission and distribution lines, and to 
determine the non-discriminatory and 
objective criteria for the dispatching of 
power stations; whereas, moreover, 
Member States should be able to 
determine the extent and nature of 
distribution companies' rights (including 
the grant of exclusive distribution 
concessions in respect of all customers 
below the eligibility thresholds for access 
to the transmission and distribution 
system) and of their public service 
obligations, including the obligation to 
supply, the maintenance of system security 
and the development of the system 
capability to meet demand; whereas 
Member States also retain the power to 
regulate all aspects of electricity tariffs for 
final customers who are not eligible for 
access to the transmission and distribution 
system, for instance to ensure equal 
treatment of these customers; Whereas, in accordance with the principle 
of subsidiarity, general principles 
providing for a framework must be 
established at Community level, but their 
detailed implementation should be left to 
Member States, thus allowing each 
Member State to choose the regime which 
corresponds best to its particular situation; 
whereas therefore Member States should, 
subject to the Treaty provisions and those 
made thereunder, remain free to determine 
the detailed criteria for licensing the 
construction of power stations and of 
transmission and distribution lines, and to 
determine the non-discriminatory and 
objective criteria for the dispatching of 
power stations; whereas, moreover, 
Member States should be able to 
determine the extent and nature of 
distribution companies' rights (including 
the grant of exclusive distribution 
concessions in respect of all customers 
below the eligibility thresholds for access 
to the transmission and distribution 
system) and of their public service 
obligations, including the obligation to 
supply, the maintenance of system 
security and the development of the 
system capability to meet demand; 
whereas Member States also retain the 
power to regulate all aspects of electricity 
tariffs for final customers who are not 
eligible for access to the transmission and 
distribution system, for instance to ensure 
equal treatment of these customers; 
17 
Whereas these measures constitute a 
second phase of liberalization; whereas 
once they have been put into effect some 
obstacles to trade in electricity between 
Member States will nevertheless remain in 
place; whereas, therefore, it will be 
necessary to provide for further market 
liberalization including in particular a 
reduction in the barriers to the supply of 
electricity by producers to customers; 
whereas the precise details of this third 
phase, which should complete the internal 
electricity market, can only be defined in 
the light of experience during the second 
phase; whereas a three-year period is 
sufficiently long to gather the experience 
on which to base the definition of the 
third and final phase; 
Whereas the present Directive does not 
prejudice the application of the rules of 
the Treaty, Whereas these measures constitute a 
second phase of liberalization; whereas 
once they have been put into effect some 
obstacles to trade in electricity between 
Member States will nevertheless remain in 
place; whereas, therefore, it will be 
necessary to provide for further market 
liberalization including in particular a 
reduction in the barriers to the supply of 
electricity by producers to customers; 
whereas the precise details of this third 
phase, which should complete the internal 
electricity market, can only be defined in 
the light of experience during the second 
phase; whereas the Commission must 
therefore report to the Council and the 
European Parliament on the application of 
this Directive before the end of this 
second phase; 
Whereas this Directive does not affect the 
application of the rules of the Treaty, 
18 
HAS ADOPTED THIS DIRECTIVE: 
Chapter I 
Scope 
ARTICLE 1 
This Directive establishes common rules 
for the access to the market and for the 
criteria and procedures to be used when 
licensing the generation, transmission and 
distribution of electricity and for the 
operation of the interconnected system. 
ARTICLE 2 
For the purposes of this Directive: 
1. "Generation" shall mean the 
production of electricity. 
2. "Producer" shall mean a legal or 
natural person generating electricity 
for his own use or for sale. 
3. "Transmission" shall mean the 
transport of electricity on the 
highvoltage interconnected system in 
view of its delivery to customers. 
4. "Distribution" shall mean the transport 
of electricity on lowervoltage 
distribution systems in view of its 
delivery to cstomers. 
5. "Customers" shall mean wholesale or 
final purchasers of electricity. HAVE ADOPTED THIS DIRECTIVE: 
Chapter I 
Scope and definitions 
ARTICLE 1 
This Directive establishes common rules 
for the production, transmission and 
distribution of electricity. It lays down 
the rules relating to the organisation and 
functioning of the electricity sector, 
access to the market, the criteria and 
procedures applicable to calls for tender 
and the granting of licences, together 
with the operation of systems. 
ARTICLE 2 
For the purposes of this Directive: 
1. "generation" means the production of 
electricity; 
2. "producer" means a legal or natural 
person generating electricity for his 
own use or for sale; 
3. "transmission" means the transport 
of electricity on the highvoltage 
interconnected system in view of its 
delivery to final customers or to 
distributors; 
4. "distribution" means the transport of 
electricity on lowervoltage 
distribution systems in view of its 
delivery to customers; 
5. "customers" means wholesale or 
final purchasers of electricity; 
19 
6. "Interconnectors" shall mean 
equipment used to link electricity 
systems. 
7. "interconnected system" shall mean a 
number of transmission and 
distribution systems linked together 
by means of one or more 
interconnectors. 
8. "Direct line" shall mean a line 
linkingone or more customers with a 
point of supply without using the 
interconnected system. 
9. "Economic precedence" shall mean 
the ranking of sources of electricity 
supply in accordance with economic 
criteria. 
10. "European specification" shall mean 
acommon technical specification, or a 
European standard, or a national 
standard implementing a European 
standard. 
11. "European standard" shall mean a 
standard approved by the European 
Committee for Standardization (CEN) 
or by the European Committee for 
Electrotechnical Standardization 
(CENELEC) as a "European Standard 
(EN)" or "Harmonization Document 
(HD)", according to the common rules 
of those organisations. 6. "final customer" means the customer 
buying electricity for his own use; 
"large industrial consumer" means a 
final customer whose consumption 
exceeds 100 GWh per year or a 
lower quantity as may be specified 
by the Member State; 
"interconnectors" means equipment 
used to link electricity systems; 
9. "interconnected system" means a 
number of transmission and 
distribution systems linked together 
by means of one or more 
interconnectors; 
10. "direct line" means a line linking 
one or more customers with a point 
of supply without using the 
interconnected system; 
11. "economic precedence" means the 
ranking of sources of electricity 
supply in accordance with economic 
criteria; 
20 
12. "Common technical specification" 
shall mean a technical requirement 
drawn up in accordance with a 
procedure recognized by the Member 
States with a view to uniform 
application in all Member States and 
published in the Official Journal of 
the European Communities. 
13. "Ancillary services" shall mean all 
services necessary for the operation of 
a transmission or distribution system 
such as meeting load characteristics, 
frequency control, voltage control, 
reserve power etc.. 
14. "System user" shall mean any legal or 
natural person supplying to or being 
supplied by a transmission or 
distribution system. This shall 
include producers, system operators, 
owners of independent transmission 
and distribution lines, distribution 
companies and other customers. 
15. "Supplier" shall mean a legal or 
natural person supplying electricity to 
customers. 
16. "Supply" shall mean the delivery or 
sale of electricity to customers. 12. "European specification" means a 
common technical specification, or a 
European standard, or a national 
standard implementing a European 
standard; 
13. "European standard" means a 
standard approved by the European 
Committee for Standardization 
(CEN) or by the European 
Committee for Electrotechnical 
Standardization (CENELEC) as a 
"European Standard (EN)" or 
"Harmonization Document (HD)", 
according to the common rules of 
those organisations; 
14. "common technical specification" 
means a technical requirement drawn 
up in accordance with a procedure 
recognized by the Member States 
with a view to uniform application 
in all Member States and published 
in the Official Journal of the 
European Communities; 
15. "ancillary services" means all 
services necessary for the operation 
of a transmission or distribution 
system such as meeting load 
characteristics, frequency control, 
voltage control, reserve power etc.; 
16. "system user" means any legal or 
natural person supplying to or being 
supplied by a transmission or 
distribution system; 
21 
17. "Vertically integrated electricity 
undertaking" shall mean an electricity 
undertaking performing two or more 
of the tasks of generation, 
transmission and distribution of 
electricity. 17. "supplier" means a legal or natural 
person supplying electricity to 
customers; 
18. "supply" means the delivery or sale 
of electricity to customers; 
19. "vertically integrated electricity 
undertaking" means an electricity 
undertaking performing two or more 
of the tasks of production, 
transmission and distribution of 
electricity: 
20. "independent producer" means a 
producer who does not carry out 
electricity transmission or 
distribution functions on the territory 
covered by the system where he is 
established; 
21. "autoproducer" means an 
independent producer who produces 
electricity essentially for his own 
use. 
22 
Chapter II 
Access to the market 
ARTICLE 3 
1. Member States shall ensure that 
electricity undertakings are operated on 
commercial principles and shall not 
discriminate between these 
undertakings as regards either rights or 
obligations. 
2. Electricity undertakings shall in 
particular be free to adjust the nature of 
their business to the market and to 
establish within the Community 
activities in fields associated with the 
electricity business. 
3. Without prejudice to Article 16(2), 
Member States shall not establish, 
approve, influence or regulate tariffs or 
prices to customers in respect of the 
volume for which these customers 
exercise their right to purchase and to 
be supplied or to contract to purchase 
and to be supplied through the 
transmission and distribution system in 
accordance with Articles 6 and 7. Chapter II 
General rules for the organisation of the 
sector 
ARTICLE 3 
1. Member States shall ensure that, 
without prejudice to paragraph 2, 
electricity undertakings are operated 
on commercial principles and shall not 
discriminate between these 
undertakings as regards either rights 
or obligations. 
2. Member States may, in accordance 
with Community law, impose public 
service obligations on undertakings 
operating in the electricity sector as 
regards the security, regularity, quality 
and price of supplies. 
23 
ARTICLE 4 
1. Member States shall allow 
undertakings established in the 
Community to build, operate, purchase 
or sell generating installations which 
are located on their territory and 
which are intended for the generation 
of electricity destined for own use or 
for sale subject only to criteria and 
procedures for authorization to be 
established in accordance with 
paragraphs 2 to 6. 
2. Member States shall lay down the 
criteria which shall be met by an 
undertaking applying for a licence to 
build or operate a generating 
installation. The criteria shall be 
objective and nondiscriminatory. 
They shall be published not later than 
six months after the date laid down in 
Article 28. 
The criteria shall relate exclusively to: 
- security and safety of the 
installation; 
- environmental protection 
requirements; 
- land use and siting; 
- the technical and financial capacity 
of the applicant undertaking. 
However, Member States may, for 
reasons of environmental policy or of 
security of supply, supplement these 
criteria by criteria restricting the nature 
of the primary energy source that may 
be used for the generation of electricity. 
24 
(4) 
3. Member States shall lay down and 
publish, not later than six months 
after the date laid down in Article 28, 
the procedures to be followed by an 
undertaking applying for a licence to 
build and operate generating 
installations. The procedures shall be 
non-discriminatory. 
The procedures may vary according to 
the nature of the primary energy 
source to be used and the technical 
type of the generating installations. In 
the case of major installations, a 
licence may be granted for each 
successive phase of construction. 
4. Member States shall ensure that the 
criteria and procedures are applied in a 
manner which is non-discriminatory 
and that all applications are handled in 
a timely manner. 
Any change to the criteria and 
procedures made during the course of 
an application shall be applied in a 
non discriminatory manner to all 
applicants whose applications are 
under consideration. 
5. Member States may attach conditions 
and requirements to the licence 
provided that such conditions and 
requirements are non-discriminatory 
and are no more restrictive than is 
necessary to ensure that the criteria are 
respected. 
6. Member States shall ensure that the 
reasons for any refusal to grant a 
licence are given to the applicant and 
shall establish a procedure enabling 
the applicant to appeal against such 
refusals. 
25 
ARTICLE 5 
1. Member States shall grant licences to 
build or operate electricity 
transmission or distribution lines and 
associated equipment on their territory 
in accordance with the provisions of 
paragraphs 2 to 8. 
2. Member States shall lay down the 
criteria which shall be met by an 
undertaking applying for a licence to 
build or operate a transmission or 
distribution line. The criteria shall be 
objective and non-discriminatory. 
They shall be published not later than 
six months after the date laid down in 
Article 28. 
The criteria shall relate exclusively to: 
- security and safety of lines and 
associated equipment; 
- environmental protection 
requirements; 
- land use and siting; 
- public ground use; 
- technical and financial capacity of 
the applicant undertaking. 
3. Member States may refuse or defer the 
grant of a licence, if the transmission 
or distribution requirements concerned 
can be satisfied by the existing 
transmission and distribution capacities 
available in the interconnected system 
at a reasonable and equitable price. 
4. Member States shall lay down and 
publish not later than six months after 
the date laid down in Article 28, the 
procedures to be followed by an 
undertaking applying for a licence to 
build or operate transmission and 
distribution lines. The procedures 
shall be non-discriminatory. 
26 
5. Member States shall ensure that the 
criteria and procedures are applied in a 
manner which is non-discriminatory 
and that all applications are handled 
without delay. 
Any change to the criteria and 
procedures made during the course of 
an application shall be applied in a 
non-discriminatory manner to all 
applicants whose applications are 
under consideration. 
6. Any right to expropriate private 
property or any right to use public 
ground shall be granted in a non­
discriminatory manner. 
In so far as the public interest is taken 
into consideration when granting a 
right of expropriation or a right to use 
public ground, a line shall be deemed 
of public interest if: 
(i) the line is necessary to meet 
transmission or distribution 
requirements which cannot be met by 
the existing systems; or 
(ii) a substantial part of the capacity of the 
line is either open for use by third 
parties, or made available to the 
public, at a reasonable and equitable 
price. price. 
7. Member States may attach conditions 
and requirements to the licence, 
provided that such conditions and 
requirements are non-discriminatory 
and are no more restrictive than is 
necessary to ensure that the criteria are 
respected. 
27 
8. Member States shall ensure that the 
reasons for any refusal to grant a 
licence are given to the applicant and 
shall establish a procedure enabling 
the applicant to appeal against such 
refusals. 
ARTICLE 6 
1. Subject to Article 5(1), Member States 
shall ensure that electricity producers 
and suppliers established in their 
territory are able to supply their own 
premises, subsidiaries and affiliate 
companies and customers through a 
direct line. 
2. Subj ect to Article 5( 1 ), Member States 
shall ensure that any customer 
established in their territory is able to 
purchase and to be supplied with 
electricity from a producer or supplier 
through a direct line. 
ARTICLE 7 
1. Member States shall ensure that 
electricity producers and suppliers 
established in their territory are able: 
(i) to supply their own premises, 
subsidiaries and affiliate companies in 
the same Member State or in another 
Member State through the use of the 
interconnected system, subject to the 
conclusion of agreements with the 
relevant transmission and distribution 
system operators pursuant to Articles 
14 and 21 respectively; 
28 
(ii) to supply or to contract to supply 
customers in the same Member State 
or in another Member State, through 
the use of the interconnected system, 
subject to the conclusion of 
agreements with the relevant 
transmission and distribution system 
operators pursuant to Articles 14 and 
21 respectively. 
2. Member States shall ensure that any 
customer established in their territory 
is able to purchase and to be supplied 
or to contract to purchase and to be 
supplied with electricity to be 
delivered from a producer or suppliers 
in the same Member State or in 
another Member State, through the use 
of the interconnected system, subject 
to the conclusion of agreements with 
the relevant transmission and 
distribution system operators pursuant 
to Articles 14 and 21 respectively. A 
Member State may limit such use of 
the interconnected system: 
- to companies for the supply of sites 
the overall individual consumption of 
which exceeds 100 GWh per year or 
such lower figure as may be specified 
by the Member State; 
- to distribution companies, individually 
or in association, whose individual or 
aggregated sales represent at least 3% 
of overall consumption in the Member 
State concerned or such lower figure 
as may be specified by the Member 
State. 
29 
Chapter m 
Transmission system operation Chapter m 
Production and transmission 
ARTigg 4 
Member States shall determine, in 
accordance with Community law, the 
public service obligations referred to in 
Article 3(2) assigned to production and 
transmission companies. 
ARTICLE 5 
1. Member States must authorize the 
construction on their territory of 
production and transmission capacity 
on the basis of objective, transparent 
and non-discriminatory criteria and 
procedures laid down in Article 7. 
2. Member States which do not wish to 
use the authorization procedure 
referred to in paragraph 1 shall draw 
up an inventory of the new means of 
production and transmission including 
replacement capacity, in accordance 
with the annual estimate referred to in 
Article 11. The inventory shall take 
account of the needs of systems for 
interconnection. 
The requisite capacity shall be 
allocated by means of a tender 
procedure organized in accordance 
with the procedure laid down in 
Article 6. 
30 
3. However, autoproducers and 
independent producers must be 
authorised, also in Member States 
which have opted for the tender 
procedure provided in paragraph 2, to 
construct production capacity and 
electricity lines on the basis of 
objective, transparent and non­
discriminatory criteria laid down in 
Article 7. 
ARTICLE 6 
1. The invitation to tender designed to 
allocate production capacity shall 
cover the making available of new or 
existing production capacity, making 
use, if necessary, of interconnected 
systems. 
2. Details of the tender procedure for 
means of production and transmission 
shall be published in the Official 
Journal of the European Communities 
at least six months prior to the date on 
which the contract is to be awarded. 
The tender specifications shall be 
made available to any interested 
undertaking established on the 
territory of a Member State so that it 
has sufficient time in which to submit 
a tender. 
3. The tender specifications shall contain 
a description of the procedure to be 
followed by all tenderers and an 
exhaustive list of the criteria 
governing the selection of tenderers 
and the award of the contract. These 
criteria shall be objective and non­
discriminatory. 
31 
The tender procedure shall be 
organised by the public authorities or 
by an independent entity appointed for 
this purpose. 
ARTICLE 7 
The criteria for granting the 
authorizations referred to in Article 5(1) 
and (3) relate to : 
- the safety and security of installations 
and associated equipment; 
- protection of the environment; 
- land occupation and the selection of 
sites; 
- use of public ground; 
- the technical and financial 
capabilities of the enterprises. 
These criteria may be supplemented by 
the taking into account of the nature of 
the primary sources to be used for the 
authorization of the construction of 
production capacities. 
The detailed criteria and the procedures 
shall be made public. 
Applicants shall be informed of the 
reasons, which must be objective and 
non-discriminatory, for any refusal to 
grant an authorization; a reason for 
refusal may be an infringement by the 
applicant of public service obligations. 
Appeal procedures must be made 
available to the applicant. 
32 
(5) 
ARTICLE 8 
1. Member States shall designate or shall 
require the undertakings which own 
transmission systems (including 
electrical lines forming part thereof) or 
are responsible for system control or 
for dispatch to designate a system 
operator, which has the obligation to 
operate and to ensure the maintenance 
and development of the transmission 
system in a given area and its 
interconnectors with other systems. 
2. Member States shall lay down 
provisions requiring the transmission 
system to be operated separately from 
the generation and distribution divisions 
of any integrated electricity 
undertakings and from any generation 
and distribution undertakings. 
3. Member States shall ensure that the 
transmission system operator acts in 
accordance with Articles 9 to 15. ARTICLE 8 
1. Member States shall designate or shall 
require the undertakings which own 
transmission systems to designate, for a 
period of a least fifteen years, a system 
operator, charged with operating and 
ensuring the maintenance and 
development of the transmission system 
in a given area and its interconnectors 
with other systems. 
2. Unless the transmission system is 
already indépendant from production 
and distribution activities, the system 
operator shall be at least 
administratively independent from the 
other activities relating to the 
transmission system. The fees for the 
use of the lines and installations needed 
for transit shall be paid to their 
proprietors. 
3. Member States shall ensure that the 
transmission system operator acts in 
accordance with the provisions of 
Articles 9 to 14. 
33 
ARTICLE 9 
1. The transmission system operator shall 
maintain a secure, reliable and efficient 
electricity system in its area. 
2. The transmission system operator shall 
refrain from buying or selling 
electricity, except in cases where such 
transactions are related to: 
- ancillary services referred to in 
paragraph 4 of this Article; 
- electricity produced by generating 
installations referred to in Article 13(4). 
3. The transmission system operator shall 
use its best endeavours to develop the 
transmission system and to achieve the 
expeditious construction of such new 
transmission capacity as may be needed 
to enable the transmission capacity to 
adjust to the demand for the use of that 
capacity. 
4. The transmission system operator shall 
take all necessary steps to ensure the 
availability of all ancillary services 
necessary to maintain a high level of 
reliability and security of the electricity 
system. ARTICLE 9 
1. The system operator shall be 
responsible for managing energy flows 
on the system, taking into account 
exchanges with interconnected systems. 
It shall maintain a secure, reliable and 
efficient electricity system in its area. 
2. The system operator shall take all 
necessary steps to ensure the 
availability of all ancillary services 
necessary to maintain a high level of 
reliability and security of the electricity 
system. 
3. Without prejudice to the provisions of 
paragraphs 1 and 2, Member States 
may grant the system operator any 
powers they regard as essential to the 
proper functioning of the system. 
34 
5. The transmission system operator shall 
ensure the availability of metered 
operational data and provide interested 
parties with all information necessary 
for settlement and payment. 
6. The transmission system operator shall 
not discriminate between users or 
classes of users of the system or 
between users of the system and any of 
the system operator's other businesses, 
any businesses affiliated to it, or any of 
its shareholders. 
ARTICLE 10 
1. The transmission system operator shall 
provide to the operator of any other 
system with which its system is 
interconnected sufficient information to 
ensure the secure and efficient 
operation and the coordinated 
development of the interconnected 
system. 
2. The transmission system operator shall 
facilitate transfers of electricity to and 
from connected systems. To that end 
the transmission system operator shall 
conclude all agreements necessary with 
other relevant transmission or 
distribution system operators to enable 
a user connected to its system to use 
the interconnected system. 
The transmission system operator shall 
fix terms for the use of interconnectors 
after consultation with the system 
operator of the connected system. The system operator shall ensure the 
availability of metered operational data 
and provide interested parties with all 
information necessary for settlement 
and payment. 
The system operator shall not 
discriminate between users or classes 
of users of the system and any of the 
system operator's affiliates or 
shareholders. 
ARTICLE 10 
1. The system operator shall provide to 
the operator of any other system with 
which its system is interconnected 
sufficient information to ensure the 
secure and efficient operation and the 
coordinated development of the 
interconnected system. 
2. The system operator shall facilitate 
transfers of electricity to and from 
connected systems. To that end the 
system operator shall conclude all 
necessary agreements with other 
relevant, transmission or distribution 
system operators to enable a user 
connected to its system to use the 
interconnected system. 
The system operator shall fix terms for 
the use of interconnectors after 
consultation with the system operator 
of the connected system. 
35 
ARTICLE 11 
The transmission system operator shall 
prepare and publish an annual estimate on 
the generation capacity which is likely to 
be connected to the system, and on the 
demand for electricity. The estimate shall 
cover a period of at least 10 years, 
beginning from the year in which it is 
prepared. 
ARTICLE 12 
1. Within a period not exceeding one year 
from the date laid down in Article 28, 
the transmission system operator shall 
develop and publish Technical Rules, 
which shall establish the minimum 
technical design and operational 
requirements for the connection to the 
system of generating installations, final 
customers' electrical installations, other 
transmission or distribution systems, 
and direct transmission and distribution 
lines. These requirements shall be 
objective and non-discriminatory and 
not disturb the functioning of the 
internal market for electricity. ARTICLE 11 
The system operator shall draw up and 
publish an annual estimate on the 
generation and transmission capacity 
which is likely to be connected to the 
system, on the need for interconnections 
with other systems, on the potential 
transmission capacity, and on the demand 
for electricity. The estimate shall cover a 
period of at least 10 years, beginning 
from the year in which it is prepared. 
ARTICLE 12 
1. Within a period not exceeding one year 
from the date laid down in Article 28, 
the system operator shall develop and 
publish technical rules, which shall 
establish the minimum technical design 
and operational requirements for the 
connection to the system of generating 
installations, final customers' electrical 
installations, other transmission or 
distribution systems, and direct 
transmission and distribution lines. 
These requirements shall ensure the 
interoperatibility of systems, shall be 
objective and non-discriminatory and 
shall not disturb the functioning of the 
internal market for electricity. The 
system operator shall consult the 
parties concerned before 
implementation of the technical rules. 
36 
2. The Technical rules shall be approved 
by the Member States concerned, 
which shall, in accordance with 
Article 8 of Council Directive 
83/189/EEC(3), notify to the 
Commission the rules in respect of 
performance requirements and 
connections. 
3. The Technical Rules shall address at 
least the following: 
(a) voltage and frequency performance 
requirements; 
(b) conditions for connection to the 
transmission system including tariff 
metering; 
(c) operating procedures and requirements. 
The Technical Rules shall be defined 
by reference to European 
specifications where these exist. 
In the absence of European 
specifications, the Technical Rules 
shall as far as possible be defined by 
reference to other standards having 
currency within the Community. 
Technical Rules shall be complied 
with, implemented and enforced by the 
transmission system operator. In 
instances where a user is subject to 
differing Technical Rules which are 
applied by two or more transmission 
or distribution system operators, the 
system operators concerned shall use 
their best endeavours to resolve the 
differences. 
(3) OJNoL 109,26.4.1983, p. 8. 2. The technical rules shall be approved 
by the Member States concerned, 
which shall, in accordance with 
Article 8 of Council Directive 
83/189/EEC(4), notify to the 
Commission the rules in respect of 
performance requirements and 
connections. 
3. The technical rules shall address at 
least the following: 
(a) voltage and frequency performance 
requirements; 
(b) conditions for connection to the 
transmission system including tariff 
metering; 
(c) operating procedures and 
requirements. 
4. The technical rules shall be defined by 
reference to European specifications 
where these exist. 
In the absence of European 
specifications, the technical rules shall 
be defined as far as possible by 
reference to other standards having 
currency within the Community. 
5. The technical rules shall be complied 
with, implemented and enforced by 
the system operator. In instances 
where a user is subject to differing 
technical rules which are applied by 
two or more transmission or 
distribution system operator^, the 
system operators concerned shall use 
their best endeavours to resolve the 
differences. 
(4) OJNoL 109, 26.4.1983, p. 8. 
37 
6. In the preparation, implementation and 
enforcement of the Technical Rules, 
there shall be no discrimination 
between users or classes of users of a 
system except as necessary to ensure 
security and quality of supply. The 
Rules shall not impose unreasonable 
requirements or unduly inhibit access 
to the system. 
ARTICLE 13 
1. The transmission system operator shall 
be responsible for dispatching the 
generating installations in its area and 
for determining the use of 
interconnectors with other systems. 
2. The dispatch of the generating 
installations and the use of 
interconnectors shall be determined by 
the transmission system operator 
according to the actual needs of the 
system on the basis of criteria which 
are approved by the Member State 
concerned. The criteria shall be 
objective, transparent and applied in a 
non discriminatory manner and not 
disturb the functioning of the internal 
market for electricity. 
The criteria for dispatch and for use of 
interconnectors shall take into account 
the economic precedence of electricity 
from available generating installations 
or interconnector transfers, the 
technical constraints arising on the 
system and any measure taken by a 
Member State pursuant to paragraph 5. 6. In the preparation, implementation and 
enforcement of the technical rules, 
there shall be no discrimination 
between users or classes of users of a 
system except as necessary to ensure 
security and quality of supply. The 
rules shall not impose unreasonable 
requirements or unduly inhibit access 
to the system. 
ARTICLE 13 
1. The system operator shall be 
responsible for dispatching the 
generating installations in its area and 
for determining the use of 
interconnectors with other systems. 
2. Without prejudice to the supply to 
distribution companies of electricity 
from their own generating plants 
directly connected to their distribution 
system, the dispatch of the generating 
installations and the use of 
interconnectors shall be determined by 
the system operator, as far as 
contractual obligations allow, 
according to the actual needs of the 
system on the basis of criteria which 
are approved by the Member State 
concerned. The criteria shall be 
objective, transparent and applied in a 
non discriminatory manner and shall 
not disturb the functioning of the 
internal market for electricity. 
3. The criteria for dispatch of the 
generating installations and for the use 
of interconnectors shall take into 
account the economic precedence of 
electricity from available generating 
installations or interconnector transfers 
and the technical constraints arising on 
the system. 
38 
5. When dispatching generating 
installations in its area the 
transmission system operator shall 
give priority to generating installations 
whose capacity does not exceed 25 
Megawatts provided that these 
installations use renewable energy 
sources or waste or produce combined 
heat and power and are offered at 
reasonable prices. 
A Member State may, for reasons of 
security of supply, direct that priority 
be given to the dispatch of generating 
installations using indigenous primary 
fuel sources, to an extent not 
exceeding in any calendar year 20% of 
the overall primary energy necessary 
to produce the electricity consumed in 
the Member State concerned. This 
figure shall be progressively reduced 
to 15% by 31 December 2000. 
ARTICLE 14 
1. System users and prospective system 
users may apply to the transmission 
system operator to enter into an 
agreement for connection to and/or use 
of the interconnected system. When dispatching generating 
installations the system operator may 
give priority to generating installations 
using reneweble energy sources or 
waste or producing combined heat and 
power. The electricity sold or 
purchased by these installations shall 
be priced in accordance with the 
guidelines laid down in 
recommendation 3(c) of Council 
Recommendation 88/611/EEC(5). 
(5) OJNoL 335, 7.12.1988, p. 29. 
39 
2. In response to such an application, the 
transmission system operator shall 
propose an agreement for connection 
to and/or use of the interconnected 
system. The transmission system 
operator may, however, refuse to make 
a proposal for an agreement for use of 
the system if such use would prejudice 
the transmission of electricity in 
fulfilment of any statutory obligation 
or of contractual commitments. The 
reasons for any refusal shall be given 
to the applicant. 
All applications shall be handled in a 
timely manner and a response shall, in 
any event, be given within three 
months following receipt of the 
application. 
3. The proposal for an agreement shall 
include terms relating to an obligation 
on the part of the transmission system 
operator: 
(i) to accept into the relevant system at 
such entry point or points such 
quantities of electricity as may be 
specified in the application; and/or 
(ii) to enable the delivery to be made of 
such quantities of electricity as are 
referred to in (i) above (less any 
transmission losses) at such exit point 
or points on the relevant system as 
may be specified in the application. 
4. The transmission system operator 
shall, on request and at a reasonable 
charge, make available to a potential 
user, a statement of opportunities for 
electricity transactions involving the 
use of the system and of its 
interconnectors. 
40 
(6) 
This statement of opportunities shall 
contain sufficient information to 
enable a potential user to make a 
reasonable assessment of those 
opportunities. 
5. The transmission system operator shall 
publish the basis upon which the terms 
for connection to and use of the 
system and its interconnectors will be 
set. The publication shall contain 
sufficient information to enable a 
potential user to make a reasonable 
assessment of the charges that would 
be payable for electricity transactions 
involving the use of the system and of 
its interconnectors. 
6. The basis upon which the transmission 
system operator's terms are set shall be 
such that the charges that would be 
payable are reasonably related to the 
long term costs incurred in the 
provision of the relevant service, 
together with a reasonable rate of 
return on capital employed in the 
provision of that service. 
7. The transmission system operator shall 
not discriminate between any persons 
or classes of persons in the terms for a 
connection to its system or for the use 
of its system and interconnectors. 
8. The contractual right of use of the 
interconnected system shall be lost if 
the transmission capacity is not used . 
If capacities are partly unused the 
same shall apply to the unused part of 
the capacity. 
41 
ARTICLE 15 
The transmission system operator shall 
preserve the confidentiality of 
commercially sensitive information 
obtained in the course of carrying out its 
business. ARTICLE 14 
The transmission system operator shall 
preserve the confidentiality of 
commercially sensitive information 
obtained in the course of carrying out its 
business. 
42 
Chapter IV 
Distribution system operation 
ARTICLE 16 
1. Member States shall define the rights 
and the public service obligations of 
distribution companies and the rights 
and obligations of their customers. 
2. Member States may lay upon 
distribution companies an obligation to 
supply the customers located in a given 
area, with respect to the volume for 
which they do not exercise their right, 
or do not have the right to be supplied 
by other suppliers in accordance with 
Articles 6 and 7. Without prejudice to 
Article 3(3), the tariff for such supplies 
may be regulated, for instance to ensure 
equal treatment of the customers 
concerned. 
3. Member States shall establish rules: 
- on the procedure to be followed by 
customers who wish to terminate 
supply by the distribution company, in 
particular as regards the minimum 
notice period for termination, which 
shall not exceed three months; 
- on the procedure to be followed by 
customers who wish to resume supply 
from the distribution company, in 
particular on the minimum notice 
period for resumption, which shall not 
exceed six months. Chapter IV 
Distribution system operation 
ARTICLE 15 
1. Member States shall determine, in 
accordance with Community law, the 
rights and the public service 
obligations referred to in Article 3(2), 
of distribution companies and the 
rights and obligations of their 
customers. 
2. Member States may impose, on 
distribution companies, an obligation 
to supply the customers located in a 
given area. The tariff for such 
supplies may be regulated, for 
instance to ensure equal treatment of 
the customers concerned. 
43 
4. Member States shall designate or shall 
require undertakings which own or are 
responsible for distribution systems 
(including electrical lines forming part 
thereof) to designate a distribution 
system operator, which has the 
obligation to operate and to ensure the 
maintenance and development of the 
distribution system in a given area and 
its interconnectors with other systems. 
5. Member States shall ensure that the 
distribution system operator acts in 
accordance with Articles 17 to 22. 
ARTICLE 17 
1. The distribution system operator shall 
maintain a secure, reliable and efficient 
electricity distribution system in its 
area. 
The distribution system operator shall 
use its best endeavours to develop the 
distribution system and to achieve the 
expeditious construction of such new 
distribution capacity as may be needed 
to enable the distribution capacity to 
adjust to the demand for the use of that 
capacity. 3. Member States shall designate or shall 
require undertakings which own or are 
responsible for distribution systems 
(including electrical lines forming part 
thereof) to designate a system 
operator, charged with operating and 
ensuring the maintenance and 
development of the distribution system 
in a given area and its interconnectors 
with other systems. 
4. Member States shall ensure that the 
distribution system operator acts in 
accordance with Articles 16, 17 and 
18. 
ARTICLE 16 
1. The system operator shall maintain a 
secure, reliable and efficient electricity 
distribution system in its area, while 
respecting people's health and the 
environment. 
2. The system operator shall be required 
to fulfil the public service obligations 
assigned to it. 
44 
3. The distribution system operator shall 
ensure the availability of metered 
operational data and provide interested 
parties with all information necessary 
for settlement and payment. 
4. The distribution system operator shall 
not discriminate between users or 
classes of users of the system or 
between users of the system and any of 
the system operator's other businesses, 
any businesses affiliated to it, or any of 
its shareholders. 
ARTICLE 18 
1. The distribution system operator shall 
provide to the operator of any system 
with which its system is 
interconnected sufficient information to 
ensure the secure and efficient 
operation and the coordinated 
development of the interconnected 
electricity system. 
2. The distribution system operator shall 
cooperate with other relevant system 
operators to define all the necessary 
agreements for the use of the 
interconnected system applied for by a 
user connected to its system. 3. The system operator shall use its best 
endeavours to encourage the optimum 
use of existing capacity and to ensure 
the expeditious construction of such 
new distribution capacity as may be 
needed to enable capacity to adjust to 
demand. 
The system operator shall not 
discriminate between users or classes 
of users of the system and any of the 
system operator's affiliates or 
shareholders. 
45 
The distribution system operator shall in 
particular determine the terms for the use 
of the interconnectors after consultation 
with the system operator of the connected 
system. 
ARTICLE 19 
1. The distribution system operator shall 
prepare annually a report on the quality 
of supply and the quality of service. 
The report shall be brought to the 
attention of the authority competent for 
the distribution area concerned, and 
those competent for the neighbouring 
areas, and shall be made available to 
the Member State and the SOEC upon 
request. 
2. The Commission shall establish the 
appropriate criteria for the content of 
the reports in order to ensure their 
comparability on Community level. 
ARTICLE 20 
1. Within a period not exceeding one year 
from the date laid down in Article 28, the 
distribution system operator shall develop 
and publish Technical Rules, which shall 
establish the minimum design and 
operational technical requirements for the 
connection to the system of generating 
installations, customers electrical 
installations, transmission and other 
distribution systems and direct 
transmission and distribution lines. These 
requirements shall be objective and non­
discriminatory and not disturb the 
functioning of the internal market for 
electricity. ARTICLE 17 
1. The system operator shall draw up 
and publish an annual report on the 
quality of supply and the quality of 
service. 
2. The Commission shall establish the 
appropriate criteria for the content of 
the reports in order to ensure their 
comparability at Community level. 
46 
2. The Technical Rules shall be approved 
by the Member State concerned which 
shall, in accordance with Article 8 of 
Directive 83/189/EEC notify to the 
Commission the rules in respect of 
performance requirements and 
connections. 
3. The Technical Rules shall address at 
least the following: 
(a) voltage and frequency performance 
requirements; 
(b) conditions for connection to and 
operation of the distribution system 
including tariff metering; 
(c) operating procedures and requirements. 
4. The Technical Rules shall be defined 
by reference to European 
specifications where these exist. 
In the absence of European 
specifications, the Technical Rules 
shall as far as possible be defined by 
reference to other standards having 
currency within the Community. 
5. Technical Rules shall be complied 
with, implemented and enforced by the 
distribution system operator. In 
instances where a user is subject to 
differing Technical Rules which are 
applied by two or more transmission 
or distribution system operators, the 
system operators concerned shall use 
their best endeavours to resolve the 
differences. 
47 
6. In the preparation, implementation and 
enforcement of the Technical Rules, 
there shall be no discrimination 
between users or classes of users of a 
system except as necessary to ensure 
security and quality of supply. The 
Rules shall not impose unreasonable 
requirements or unduly inhibit access 
to the system. 
ARTICLE 21 
1. System users and prospective system 
users may apply to the distribution 
system operator to enter into an 
agreement for connection to and/or use 
of the interconnected system. 
2. In response to such an application, the 
distribution system operator shall 
propose an agreement, for connection 
to and/or use of the interconnected 
system. The distribution system 
operator may, however, refuse to make 
a proposal for an agreement for use of 
the system if such use would prejudice 
the distribution of electricity in 
fulfilment of any statutory obligation or 
of contractual commitments. The 
reasons for any refusal shall be given 
to the applicant. 
All applications shall be handled in a 
timely manner and a response shall, in 
any event, be given within three 
months following receipt of the 
application. 
3. The proposal for an agreement shall 
include terms relating to an obligation 
on the part of the distribution system 
operator: 
48 
(7) 
(i) to accept into the relevant system at 
such entry point or points such 
quantities of electricity as may be 
specified in the application; and/or 
(ii) to enable the delivery to be made of 
such quantities of electricity as are 
referred to in (i) (less any distribution 
losses) at such exit point or points on 
the relevant system as may be 
specified in the application. 
4. The distribution system operator shall, 
on request and at a reasonable charge, 
make available to a potential user, a 
statement of opportunities for 
electricity transactions involving the 
use of the system and of its 
interconnectors. 
This statement of opportunities shall 
contain sufficient information to 
enable a potential user to make a 
reasonable assessment of those 
opportunities. 
5. The distribution system operator shall 
publish the basis upon which the terms 
for connection to and/or use of the 
system and its interconnectors will be 
set. The publication shall contain 
sufficient information to enable a 
potential user to make a reasonable 
assessment of the charges that would 
be payable for electricity transactions 
involving the use of its system and of 
its interconnectors. 
49 
6. The basis upon which the distribution 
system operator's terms are set shall be 
such that the charges that would be 
payable are reasonably related to the 
long term costs incurred in the 
provision of the relevant service, 
together with a reasonable rate of 
return on the capital employed in the 
provision of that service. 
7. The distribution system operator shall 
not discriminate between any persons 
or classes of persons in the terms of a 
connection to its system or for the use 
of the system and interconnectors. 
8. The contractual right of use of the 
interconnected system shall be lost if 
the distribution capacity is not used. 
If capacities are partly unused, the 
same shall apply to the unused part of 
the capacity. 
ARTICLE 12 
The distribution system operator shall 
preserve the confidentiality of 
commercially sensitive information 
obtained in the course of carrying out its 
business. ARTICLE 18 
The distribution system operator shall 
preserve the confidentiality of 
commercially sensitive information 
obtained in the course of carrying out its 
business. 
50 
Chapter V 
Unbundling and transparency of accounts 
ARTICLE 23 
Member States shall make the necessary 
arrangements for ensuring that vertically 
integrated electricity undertakings organize 
their electricity generation, transmission 
and distribution activities - as the case 
may be - in as many separate divisions as 
there are activities. Any State aid granted 
to one division may not benefit another 
division. Chapter V 
Unbundling and transparency of 
accounts 
ARTICLE 24 
1. Member States shall take the necessary 
steps to ensure that the accounts of 
electricity undertakings are drawn up in 
accordance with paragraphs 2 to 7. 
2. Vertically integrated undertakings shall, 
in their internal accounting, keep 
separate accounts for each division 
established in accordance with Article 
23, as they would be required to do if 
the activities in question were carried 
out by separate companies, and shall 
publish a balance sheet and a profit and 
loss account for each division in their 
annual management report. ARTICLE 19 
Member States or any competent 
authority they designate shall have right 
of access to the accounting documents of 
production, transmission or distribution 
companies which they must consult in 
carrying out their checks. 
ARTICLE 20 
1. Member States shall take the 
necessary steps to ensure that the 
accounts of electricity undertakings 
are drawn up in accordance with 
paragraphs 2 to 6. 
2. Vertically integrated undertakings 
shall, in their internal accounting, 
keep separate accounts for their 
production, transmission and 
distribution activities, as they would 
be required to do if the activities in 
question were carried out by separate 
companies, and shall publish a 
balance sheet and a profit and loss 
account for each activity in their 
annual management report. 
51 
3. Electricity undertakings, whatever thier 
system of ownership or legal form, 
shall draw up, publish and submit to 
audit their annual accounts in 
accordance with the rules of national 
legislation concerning the annual 
accounts of limited liability companies 
adopted to implement Council 
Directive 78/660/EEC(4). Undertakings 
which are not legally obliged to 
publish their annual accounts shall 
hold a copy of these at the disposition 
of the public in their head office. 
4. In addition, the accounts of electricity 
distribution undertakings and the 
accounts of the distribution division of 
vertically integrated undertakings shall 
distinguish between: 
(a) electricity supply costs from 
distribution costs and other charges; 
(b) sales of 
purposes 
purposes. electricity for industrial 
from sales for other 
5. Undertakings shall specify in notes to 
the annual accounts the rules for the 
allocation of charges which they 
follow in drawing up the separate 
accounts pursuant to paragraph 2. 
These rules may be amended only in 
exceptional cases. Such amendments 
must be mentioned in the annual 
report and must be duly substantiated. 
6. The depreciation rules applied to the 
different categories of fixed assets 
shall appear separately in the notes 
among the rules of valuation. 
(4) OJNoL 222, 14.8.1978, p. 11. Electricity undertakings, whatever 
thier system of ownership or legal 
form, shall draw up, publish and 
submit to audit their annual accounts 
in accordance with the rules of 
national law concerning the annual 
accounts of limited liability 
companies adopted to implement 
Council Directive 78/660/EEC(6). 
Undertakings which are not legally 
obliged to publish their annual 
accounts shall hold a copy of these at 
the disposition of the public in their 
head office. 
4. Undertakings shall specify in notes to 
the annual accounts the rules for the 
allocation of charges which they 
follow in drawing up the separate 
accounts pursuant to paragraph 2. 
These rules may be amended only in 
exceptional cases. Such amendments 
must be mentioned in the annual 
management report must be duly 
substantiated. 
5. The depreciation rules applied to the 
different categories of fixed assets 
shall appear separately in the notes 
among the rules of valuation. 
(6) OJNoL 222, 14.8.1978, p. 11. 
52 
7. The annual accounts shall indicate in 
notes any important transaction 
conducted with associated 
undertakings within the meaning of 
Article 33 of Council Directive 
83/349/EEC(5), or affiliated 
undertakings or undertakings which 
belong to the same owner. 
(5) OJNoL 193, 18.7.1983, p. 1. The annual accounts shall indicate in 
notes any important transaction 
conducted with associated 
undertakings within the meaning of 
Article 33 of Council Directive 
83/349/EEC(7), or affiliated 
undertakings or undertakings which 
belong to the same owner. 
(7) OJNoL 193, 18.7.1983, p. 1. 
53 
Chapter VI 
Access to the system 
ARTICLE 21 
1. Member States shall take the 
necessary measures for: 
i) electricity producers and transmitters 
either inside or outside the territory 
covered by the system to be able to 
negotiate access to the system so as 
to conclude supply contracts with 
final customers who are large 
industrial consumers and with 
distributors on the basis of voluntary 
commercial agreement; 
ii) electricity producers to be able to 
negotiate access to the system so as 
to supply their own premises, 
subsidiaries and affiliate companies 
in the same Member State or in 
another Member State, by means of 
the interconnected system; 
iii) producers outside the territory 
covered by the system to be able to 
conclude a supply contract following 
a call for tender for new production 
capacities, and to have access to the 
system to perform the contract. 
2. Where the industrial consumer is 
connected to the distribution system, 
access to the system must be the 
subject of negotiation with the 
distribution company managing the 
system to which the consumer is 
connected. Similarly access to the 
transmission system must be 
negotiated with the system operator 
concerned. 
54 
3. Member States shall ensure that the 
parties negotiate in good faith and 
that none of them abuses its 
negotiating position by preventing the 
successful outcome of those 
negotiations. The system operator 
may refuse access where the contract 
in question would prevent him from 
carrying out the public service 
obligations referred to in Article 3(2) 
which are assigned to him. 
4. Member States shall designate a 
competent authority, which must be 
independent of the parties, to settle 
disputes relating to the contracts and 
negotiations in question. Recourse to 
this authority shall be had without 
prejudice to the exercise of rights of 
appeal under Community law. 
(See Art. 6) ARTICLE 22 
1. Member States shall ensure that all 
the producers and suppliers of 
electricity established in their 
territory are able, subject to Article 
7, to supply their own premises, 
subsidiaries and customers through a 
direct line. 
2. Member States shall ensure that any 
customer established in their territory 
is able to purchase and to be supplied 
with electricity by a producer or 
supplier through a direct line, subject 
to Article 7. 
55 
Chapter VI 
Final provisions 
ARTICLE 25 
In the event of a sudden crisis in the 
energy market and where physical safety 
or security of persons, apparatus or 
installations or system integrity is 
threatened, a Member State may take the 
necessary protection measures. 
Such measures must cause the least 
possible disturbance in the functioning of 
the internal market and must not be wider 
in scope than is strictly necessary to 
remedy the sudden difficulties which have 
arisen. 
The Member State concerned shall 
without delay notify these measures to 
the other Member States and to the 
Commission, which may decide that the 
Member State concerned shall amend or 
abolish such measures, in so far as they 
distort competition and adversely affect 
trade to an extent contrary to the common 
interest. 
ARTICLE 26 
Member States shall establish a dispute 
resolution procedure by which the parties 
can settle disputes on matters covered by 
this Directive. Chapter VII 
Final provisions 
ARTICLE 23 
In the event of a sudden crisis in the 
energy market and where the physical 
safety or security of persons, apparatus or 
installations or system integrity is 
threatened, a Member State may take the 
necessary protection measures. 
Such measures must cause the least 
possible disturbance in the functioning of 
the internal market and must not be wider 
in scope than is strictly necessary to 
remedy the sudden difficulties which 
have arisen. 
The Member State concerned shall 
without delay notify these measures to 
the other Member States and to the 
Commission, which may decide that the 
Member State concerned shall amend or 
abolish such measures, in so far as they 
distort competition and adversely affect 
trade to an extent contrary to the common 
interest. 
ARTICLE 24 
Member States shall establish a dispute 
resolution procedure by which the parties 
can settle disputes on matters covered by 
this Directive in accordance with 
Community rules. 
56 
ARTICLE 27 
Each Member State shall establish a 
consultative procedure enabling system 
users including domestic consumers in its 
temtory to be consulted, at least once a 
year, on matters arising under this 
Directive, and in particular on the 
transmission and distribution system 
reports established pursuant to Articles 11 
and 19. 
ARTICLE 28 
Member States shall bring into force the 
laws, regulations and administrative 
provisions necessary to comply with this 
Directive by 31 December 1992. They 
shall forthwith inform the Commission 
thereof. 
When Member States adopt these 
measures, these shall contain a reference 
to this Directive or shall be accompanied 
by such reference on the occasion of their 
official publication. The methods of 
making such reference shall be laid down 
by Member States. ARTICLE 25 
Each Member State shall establish a 
procedure enabling system users in its 
territory, including domestic consumers, 
auto-producers or independent producers, 
the social partners and organisations for 
the protection of the environment, to be 
consulted, at least once a year, on matters 
arising from the implementation of this 
Directive, and in particular on the annual 
estimate and the transmission and 
distribution system reports drawn up 
pursuant to Articles 11 and 17 
respectively. 
57 
ARTICLE 29 
The Commission shall review the 
application of this Directive and make 
appropriate proposals with a view to 
establishing the internal market for 
electricity. On the basis of these 
proposals the Council shall make the 
necessary amendments to this Directive, 
for implementation by 1 January 1996. ARTICLE 26 
1. The Commission will present a report 
to the Council and the European 
Parliament before 31 December 1995 
and will attach to that report any 
harmonization proposals necessary to 
the effective operation of the internal 
electricity market. 
2. The Council and the European 
Parliament will give their views on 
such proposals before 12 December 
1997. 
ARTICLE 27 
The Commission shall review the 
application of this Directive and make 
appropriate proposals with a view to 
establishing the internal market for 
electricity. On the basis of these 
proposals the Council shall make the 
necessary amendments to this Directive, 
for implementation on 1 January 1999. 
ARTICLE 28 
Member States shall bring into force the 
laws, regulations and administrative 
provisions necessary to comply with this 
Directive by 1 July 1994. They shall 
immediately inform the Commission 
thereof. 
58 
ARTICLE 3Q 
This Directive is addressed to the Member 
States. 
Done at Brussels, 
For the Council 
The President When Member States adopt these 
provisions, these shall contain a reference 
to this Directive or shall be accompanied 
by such reference at the time of their 
official publication. The procedure for 
such reference shall be adopted by 
Member States. 
ARTICLE 29 
This Directive shall enter into force on 
the twentieth day following that of its 
publication in the Official Journal of the 
European Communities. 
ARTICLE 30 
This Directive is addressed to the 
Member States. 
Done at Brussels, 
For the European Parliament 
The President For the Council 
The President 
59 
Amended proposal for a 
EUROPEAN PARLIAMENT AND COUNCIL DIRECTIVE 
concerning common rules for the internal market in natural gas 
THE COUNCIL OF THE EUROPEAN 
COMMUNITIES, 
Having regard to the Treaty establishing the 
European Economic Community, and in 
particular Article 57(2), Article 66 and 
Article 100a thereof, 
Having regard to the proposal from the 
Commission, 
In cooperation with the European Parliament, 
Having regard to the opinion of the 
Economic and Social Committee, 
Whereas it is important to adopt measures 
with the aim of establishing the internal 
market as provided for in Article 8a of the 
Treaty; whereas the internal market is to 
comprise an area without internal frontiers in 
which the free movement of goods, persons, 
services and capital is ensured; 
Whereas the establishing of the internal 
market in natural gas is particularly 
important both in order to increase the 
efficiency of the natural gas industry, while 
reinforcing the Community's security of 
suppply, and in order to ensure that all users 
are able to purchase natural gas on an equal 
basis, thus avoiding distortion of competition 
in user industries; THE EUROPEAN PARLIAMENT AND 
THE COUNCIL OF THE EUROPEAN 
UNION, 
Having regard to the Treaty establishing 
the European Community, and in particular 
Article 57(2), Article 66 and Article 100a 
thereof, 
Having regard to the proposal from the 
Commission, 
Having regard to the opinion 
Economic and Social Committee, of the 
Whereas it is important to adopt measures 
with the aim of establishing the internal 
market as provided for in Article 7a of the 
Treaty; whereas the internal market is to 
comprise an area without internal frontiers 
in which the free movement of goods, 
persons, services and capital is ensured; 
Whereas the establishing of the internal 
market in natural gas is particularly 
important in order to increase efficiency in 
the industry of this sector, while 
reinforcing the Community's security of 
supply; 
60 
Whereas the establishing of the internal 
market, more particularly in the natural gas 
sector, contributes to the achievement of the 
objectives of the Community's energy 
strategy by improving environmental 
protection and reinforcing security of supply 
through the diversification of energy sources; 
Whereas the establishing of the internal 
natural gas market needs to be progressive 
and to be implemented in phases in order to 
enable industry to adjust in a flexible and 
ordered manner to its new environment; 
Whereas Council Directives 91/296/EEC of 
31 May 1991 on the transit of natural gas 
through grids(1) and 90/377/EEC of 29 June 
1991 concerning a Community procedure to 
improve the transparency of gas and 
electricity prices charged to industrial end 
users(2), provide for a first phase for the 
establishing 
market; of the internal natural gas 
Whereas it is now necessary to take further 
measures with a view to the establishment of 
the internal market for gas; Whereas, irrespective of the need to 
establish a common energy policy, the 
establishing of the internal market in the 
natural gas sector contributes to the 
achievement of the objectives of the 
Community's energy strategy by improving 
environmental protection and reinforcing 
security of supply through the 
diversification of energy sources; 
Whereas the establishing of the internal 
natural gas market needs to be progressive 
and to be implemented in phases in order 
to enable industry to adjust in a flexible 
and ordered manner to its new 
environment; 
Whereas the establishing of the internal 
market in the natural gas sector should 
favour the interconnection and 
interoperability of systems; 
Whereas Council Directives 91/296/EEC of 
31 May 1991 on the transit of natural gas 
through grids(1) and 90/377/EEC of 29 June 
1991 concerning a Community procedure 
to improve the transparency of gas and 
electricity prices charged to industrial end 
users(2), as amended by Commission 
Directive 93/87/EEC(3), provide for a first 
phase for the establishing of the internal 
natural gas market; 
Whereas it is now necessary to take further 
measures with a view to the establishment 
of the internal market for gas; 
(1) OJ No L 147, 12.6.1991, p. 37. 
(2) OJ No L 185, 17.7.1990, p. 16. (1) OJNoL 147, 12.6.1991, p. 37. 
(2) OJ No L 185, 17.7.1990, p. 16. 
(3) OJ No L 277, 10.11.1993, p. 32. 
61 
Whereas it is therefore necessary to 
establish common rules for the licensing 
by Member States of the construction and 
operation of liquified natural gas (LNG) 
terminals, transmission and distribution 
lines and storage facilities and to take such 
other steps as are required in order to 
ensure the effective functioning of the 
common market; 
Whereas the establishing of the internal 
market for energy, more particularly in the 
natural gas sector, will take into account 
the objective of economic and social 
cohesion; 
Whereas natural gas companies must, in 
the internal market, be able to operate on 
normal commercial principles; Whereas security of supply and consumer 
protection entail a number of public service 
obligations of general economic interest 
which free competition, left to itself, 
cannot be relied upon to fulfil; 
Whereas, however, given the continuing 
lack of a common energy policy, and in 
the light of the need to ensure security of 
supply and consumer protection, the natural 
gas sector warrants special treatment; 
Whereas it is therefore necessary to 
establish common rules for the licensing by 
Member States of the construction and 
operation of liquified natural gas (LNG) 
terminals, transmission and distribution 
lines and storage facilities and to take such 
other steps as are required in order to 
ensure the effective functioning of the 
common market; 
Whereas the establishing of the internal 
market for energy, more particularly in the 
natural gas sector, will take into account 
the objective of economic and social 
cohesion, especially in such areas as that 
of infrastructure for natural gas 
transmission; 
Whereas natural gas undertakings must, in 
the internal market, be able to operate, 
without prejudice to constraints connected 
with public service obligations, on normal 
commercial principles; 
62 
Whereas provision should be made for 
customers and producers of natural gas to 
have access to the transmission and 
distribution systems, LNG facilities and 
storage facilities, without discrimination 
and subject to die availability of capacity 
and in return for reasonable remuneration; 
whereas this provision may be limited 
during the next phase by Member States to 
large industrial companies and with regard 
to distribution companies under certain 
conditions; 
Whereas the transmission grid system is 
controlled by transmission companies each 
of which ensures the security and 
reliability of its part of the system in the 
interest of producers, importers and 
customers; whereas each transmission 
company must behave in an objective, 
transparent and non-discriminatory manner 
in all aspects of its operation, including the 
approval of connections to the system and 
charges paid for services provided; 
Whereas each distribution system must be 
subject to central management and control 
in order to ensure the security and 
reliability of the system in the interest of 
suppliers and of customers; whereas a 
distribution system operator should 
therefore be designated and entrusted with 
the management and the development of 
the system; whereas the distribution system 
operator must behave in an objective, 
transparent and non-discriminatory manner 
in all aspects of his operation, including 
the approval of connections to the system, 
and charges paid for services provided; Whereas provision should be made for 
customers and producers of natural gas to 
have access to the transmission and 
distribution systems, LNG facilities and 
storage facilities, without discrimination 
and subject to the availability of capacity 
and in return for reasonable remuneration; 
whereas this provision may be limited, 
during the next phase, by Member States, 
to large industrial companies and to 
distribution companies; 
Whereas the transmission grid system is 
controlled by transmission undertakings 
each of which ensures the security and 
reliability of its part of the system; 
Whereas gas undertakings responsible for 
natural gas transmission must adjust 
storage and transmission capacity to 
demand; 
Whereas each distribution system must be 
subject to central management and control 
in order to ensure the security and 
reliability of the system in the interest of 
suppliers and of customers; whereas a 
distribution system operator should 
therefore be designated and entrusted with 
the management and the development of 
the system; whereas the distribution system 
operator must behave in an objective, 
transparent and non-discriminatory manner; 
63 
Whereas the conditions for connection to 
the transmission and distribution systems, 
LNG facilities and storage facilities, must 
be defined by reference to European 
specifications where possible or other 
international standards and specifications; 
Whereas principles of charging should be 
clearly laid down in order to ensure fair 
and transparent conditions for the use of 
LNG terminals, storage facilities, 
transmission and distribution systems; 
Whereas in order to ensure transparency 
and non-discrimination the transmission, 
distribution and storage functions of 
vertically integrated undertakings should be 
operated as separate divisions with separate 
accounts; whereas the accounts of all 
natural gas undertakings should provide for 
maximum transparency, in particular to 
identify possible abuses of dominant 
position, consisting for 
abnormally high or low 
discriminatory practices 
equivalent transactions; m example 
tariffs or in 
relating to 
Whereas provision must be made for 
safeguards and dispute resolution 
procedures; Whereas at the level of distribution, 
concessionary rights of local and regional 
authorities or the State may be granted; 
Whereas in order to ensure transparency 
and non-discrimination, separate accounts 
need to be kept for the transmission, 
distribution and storage functions of 
vertically integrated undertakings; whereas 
the accounts of all natural gas undertakings 
should provide for maximum transparency, 
in particular to identify possible abuses of 
a dominant position, consisting for example 
in abnormally high or low tariffs or in 
discriminatory practices relating to 
equivalent transactions; 
Whereas it is also necessary to provide for 
access by the competent authorities to the 
internal accounting documents of 
undertakings without thereby 
compromising commercial confidentiality; 
Whereas provision must be made for 
safeguards and dispute resolution 
procedures; 
64 
Whereas specific provision must be made 
for safeguards in case of a natural gas 
undertaking being in economic difficulties 
because of the impossibility to respect 
take-off volumes which are part of Take or 
Pay obligations; 
Whereas, in accordance with the principle 
of subsidiarity, general principles providing 
for a framework must be established at 
Community level, but their detailed 
implementation should be left to the 
Member States, thus allowing each 
Member State to choose the regime which 
corresponds best to its particular situation; 
whereas therefore Member States should, 
subject to the provisions of the Treaty and 
made under the Treaty, remain free to 
determine the detailed criteria for licensing 
distribution lines and storage and LNG 
facilities; whereas, moreover, Member 
States should be able to determine the 
extent and the nature of distribution 
companies' rights (including the grant of 
exclusive distribution concessions in 
respect of all customers below the 
eligibility thresholds for access to the 
transmission and distribution system) and 
of their public service obligations, 
including the obligation to supply, the 
maintenance of system security and the 
development of the system capability to 
meet demand; whereas Member States also 
retain the power to regulate all aspects of 
gas tariffs for final customers who are not 
eligible for access to the transmission and 
distribution system, for instance to ensure 
equal treatment of these customers; Whereas specific provision must be made 
for safeguards in the case of a natural gas 
undertaking being in economic difficulties 
because of the impossibility to respect 
take-off volumes which are part of take or 
pay obligations; 
Whereas, in accordance with the principle 
of subsidiarity, general principles providing 
for a framework must be established at 
Community level, but their detailed 
implementation should be left to the 
Member States, thus allowing each 
Member State to choose the regime which 
corresponds best to its particular situation; 
whereas therefore Member States should, 
subject to the Treaty provisions and those 
made thereunder, remain free to determine 
the detailed criteria for licensing 
distribution lines and storage and LNG 
facilities; whereas, moreover, Member 
States should be able to determine the 
extent and the nature of distribution 
companies' rights (including the grant of 
exclusive distribution concessions in 
respect of all customers below the 
eligibility thresholds for access to the 
transmission and distribution system) and 
of their public service obligations, 
including the obligation to supply, the 
maintenance of system security and the 
development of the system capability to 
meet demand; whereas Member States also 
retain the power to regulate all aspects of 
gas tariffs for final customers who are not 
eligible for access to the transmission and 
distribution system, for instance to ensure 
equal treatment of these customers; 
65 
Whereas these measures constitute a 
second phase of liberalisation; whereas 
once they have been put into effect some 
obstacles to trade in natural gas between 
Member States will nevertheless remain in 
place; whereas, therefore, it will be 
necessary to provide for further market 
liberalisation including in particular a 
reduction in the barriers to the supply of 
natural gas by producers to customers; 
whereas the precise details of this third 
phase, which should complete the internal 
natural gas market, can only be defined in 
the light of experience during the second 
phase; whereas a three year period is 
sufficiently long to gather the experience 
on which to base the definition of the third 
and final phase; 
Whereas the present Directive does not 
prejudice the application of the rules of the 
Treaty, Whereas these measures constitute a 
second phase of liberalisation; whereas 
once they have been put into effect some 
obstacles to trade in natural gas between 
Member States will nevertheless remain in 
place; whereas, therefore, it will be 
necessary to provide for further market 
liberalisation including in particular a 
reduction in the barriers to the supply of 
natural gas by producers to customers; 
whereas the precise details of this third 
phase, which should complete the internal 
natural gas market, can only be defined in 
the light of experience during the second 
phase; whereas the Commission must 
therefore report to the Council and the 
European Parliament on the application of 
this Directive before the end of this second 
phase; 
Whereas this Directive does not affect the 
application of the rules of the Treaty, 
66 
HAS ADOPTED THIS DIRECTIVE: J HAVE ADOPTED THIS DIRECTIVE: 
Chapter I 
Scope 
ARTICLE 1 
This Directive establishes common rules 
for the access to the market and for the 
criteria and procedures to be used when 
licensing the transmission, storage and 
distribution of natural gas and for the 
operation of the interconnected system. 
ARTICLE 2 
For the purposes of this Directive: 
1. "Transmission" shall mean the 
transport of natural gas through a 
high pressure pipeline in view of its 
delivery to customers. 
"Transmission company" shall mean 
any company that owns or operates a 
high pressure pipeline. 
3. "Distribution" shall mean the 
transport of natural gas on local or 
regional pipeline systems in view of 
its delivery to customers. Chapter I 
Scope and definitions 
ARTICLE 1 
This Directive establishes common rules 
for the storage, transmission and 
distribution of natural gas. It lays down 
the rules relating to the organisation and 
functioning of the natural gas sector, 
access to the market, the criteria and 
procedures applicable to the granting of 
licences for transmission, storage, 
distribution and supply of natural gas, 
together with the operation of systems. 
ARTICLE 2 
For the purposes of this Directive: 
1. "transmission" means the transport of 
natural gas through a high pressure 
pipeline in view of its delivery to 
final customers or to gas companies 
responsible for distribution or to other 
transmission companies; 
2. "gas company" means any 
undertaking carrying out all or some 
of the following functions: the 
purchase, storage, transmission, 
distribution or sale of natural gas, and 
which is responsible for the technical 
or maintenance tasks related to those 
functions; 
3. "distribution" means the transport of 
natural gas on local or regional 
pipeline systems in view of its 
delivery to customers; 
67 
4. "Customers" shall mean wholesale 
and final purchasers of natural gas. 
5. "LNG facility" shall mean a terminal 
which is used for the handling of 
liquified natural gas (LNG). 
"Storage facility" shall mean a 
facility owned or operated by a 
producer or a gas company for the 
storage of gas in order to balance 
supply and demand. 
7. "Interconnected System" shall mean a 
number of transmission and 
distribution systems which are linked 
with each other. 
8. "Direct line" shall mean a line linking 
one or more customers with a point 
of supply without using the 
interconnected system. 
9. "Distribution system operator" shall 
mean an undertaking having the 
responsibility of operating and 
developing a natural gas distribution 
system. 4. "customers" means gas companies or 
final customers who purchase natural 
gas; 
5. "final customer" means a consumer 
purchasing natural gas for his own 
consumption. 
6. "large-scale industrial consumer" 
means an individual consumer whose 
consumption exceeds 25 million m3 
per year or such lower figure as may 
be specified by the Member State; 
7. "LNG facility" means a terminal 
which is used for the offloading, 
storage and regasification of liquified 
natural gas (LNG); 
8. "storage facility" means a facility 
owned or operated by a producer or a 
gas company for the storage of gas in 
order to balance seasonal, daily and 
hourly variations in supply and 
demand; 
9. "interconnected system" means a 
number of transmission and/or 
distribution systems which are linked 
with each other; 
10. "direct line" means a line linking one 
or more customers with a point of 
supply without using the 
interconnected system; 
11. "distribution system operator" means 
an undertaking having the 
responsibility of operating and 
developing a natural gas distribution 
system; 
68 
10. "European specification" shall mean 
a common technical specification or a 
European standard, or a national 
standard implementing a European 
standard. 
11. "European standard" shall mean a 
standard approved by the European 
Committee for Standardization (CEN) 
or by the European Committee for 
Electrotechnical Standardization 
(CENELEC) as a "European Standard 
(EN)" or "Harmonization Document 
(HD)", according to the common 
rules of those organizations. 
12. "Common technical specification" 
shall mean a technical requirement 
drawn up in accordance with a 
procedure recognized by the Member 
States with a view to uniform 
application in all Member States and 
published in the Official Journal of 
the European Communities. 
13. "Ancillary services" shall mean all 
services necessary for the operation 
of transmission or distribution 
systems including in particular 
storage, load balancing, blending, 
reserve gas supply etc.. 
14. "System user" shall mean any legal 
or natural person supplying to or 
being supplied by a transmission or 
distribution system. This shall include 
in particular producers, importers, 
transmission companies, distribution 
system operators, owners of 
independent transmission and 
distribution lines, suppliers and other 
customers. 
15. "Supplier" shall mean a legal or 
natural person supplying natural gas 
to customers. 12. "European specification" means a 
common technical specification or a 
European standard, or a national 
standard implementing a European 
standard; 
13. "European standard" means a standard 
approved by the European Committee 
for Standardization (CEN) or by the 
European Committee for 
Electrotechnical Standardization 
(CENELEC) as a "European Standard 
(EN)" or "Harmonization Document 
(HD)", according to the common rules 
of those organisations; 
14. "common technical specification" 
means a technical requirement drawn 
up in accordance with a procedure 
recognized by the Member States 
with a view to uniform application in 
all Member States and published in 
the Official Journal of the European 
Communnities; 
15. "system user" means any legal or 
natural person supplying to or being 
supplied by a transmission or 
distribution system. This shall include 
in particular producers, importers, 
transmission companies, distribution 
system operators, owners of 
independent transmission and 
distribution lines, suppliers and other 
customers; 
16. "supplier" means a legal or natural 
person supplying natural gas to 
customers; 
69 
16, "Supply" shall mean the delivery and 
sale of natural gas to customers. 
17. "Vertically integrated natural gas 
company" shall mean a natural gas 
company performing two or more of 
the tasks of production, import, 
storage, transmission and distribution 
of natural gas. 17. "supply" means the delivery and sale 
of natural gas to customers or to the 
system; 
18. "vertically integrated natural gas 
company" means a natural gas 
company performing two or more of 
the tasks of production, import, 
storage, transmission and distribution 
of natural gas. 
70 
Chapter II 
Access to the market 
ARTICLE 3 
1. Member States shall ensure that natural 
gas companies are operated on 
commercial principles and shall not 
discriminate between these 
undertakings as regards either rights or 
obligations. 
2. Natural gas companies shall in 
particular be free to adjust the nature of 
their business to the market and to 
establish within the Community 
activities in fields associated with the 
natural gas business. 
3. Without prejudice to Article 14(2), 
Member States shall not establish, 
approve, influence or regulate tariffs or 
prices to customers in respect of the 
volume for which these customers 
exercise their right to purchase and to 
be supplied or to contract to purchase 
and to be supplied through the 
transmission and distribution system in 
accordance with Articles 5 and 6. Chapter II 
General rules for the organisation of the 
sector 
ARTICLE 3 
1. Member States shall ensure that without 
prejudice to paragraph 2, natural gas 
undertakings are operated on 
commercial principles and shall not 
discriminate between these undertakings 
as regards either rights or obligations. 
Member States may, in accordance with 
Community law, impose public service 
obligations on undertakings operating in 
the natural gas sector as regards the 
security, regularity, quality and price of 
supplies. 
71 
ARTICLE 4 
1. Member States shall grant licences to 
build or operate LNG facilities, storage 
facilities, transmission and distribution 
lines and associated equipment on their 
territory, in accordance with paragraphs 
2 to 8. 
2. Member States shall lay down the 
criteria which shall be met by an 
undertaking applying for a licence to 
build or operate LNG facilities, storage 
facilities and transmission and 
distribution lines. The criteria shall be 
objective and non-discriminatory. They 
shall be published not later than six 
months after the date laid down in 
Article 27. 
The criteria shall relate exclusively to : 
- security and safety of lines and 
associated equipment; 
- environmental protection 
requirements; 
- land use and siting; 
- public ground use; 
- technical and financial capacity of 
the applicant undertaking. ARTICLE 4 
1. Member States shall grant licences to 
build or operate LNG facilities, storage 
facilities, transmission and distribution 
lines and associated equipment on their 
territory, in accordance with paragraphs 
2 to 8. 
2. Member States shall lay down the 
criteria which shall be met by an 
undertaking applying for a licence to 
build or operate LNG facilities, storage 
facilities and transmission and 
distribution lines. The criteria shall be 
objective and non-discriminatory and 
relate to: 
- safety and security of lines and 
associated equipment; 
- protection of the environment; 
- land occupation and the selection of 
sites; 
- use of public ground; 
- the technical and financial 
capabilities of the applicant 
undertaking. 
The detailed criteria shall be published 
at the latest six months after the date 
given in Article 25. 
72 
4. Member States shall lay down and 
publish not later than six months after 
the date laid down in Article 27, the 
procedures to be followed by an 
undertaking applying for a licence to 
build or operate LNG facilities, 
storage facilities and transmission and 
distribution lines. The procedures 
shall be non-discriminatory. 
5. Member States shall ensure that the 
criteria and procedures are applied in 
a manner which is non-discriminatory 
and that all applications are handled 
without delay. 
Any change to the criteria and 
procedures made during the course of 
an application shall be applied in a 
non-discriminatory manner to all 
applicants whose applications are 
under consideration. 
6. Any right to expropriate private 
property or any right to use public 
ground shall be granted in a non­
discriminatory manner. 
In so far as the public interest is taken 
into consideration when granting a 
right of expropriation or a right to use 
public ground, a line, an LNG facility 
or a storage facility shall be deemed 
of public interest if: 
(i) the line or the LNG facility or the 
storage facility is necessary to meet 
supply, transmission or distribution 
requirements which cannot be 
satisfied by the existing systems; or 5. 
(i) Member States shall lay down and 
publish not later than six months after 
the date laid down in Article 23, the 
procedures to be followed by an 
undertaking applying for a licence to 
build or operate LNG facilities, 
storage facilities and transmission and 
distribution lines. The procedures 
shall be non-discriminatory. 
Member States shall ensure that the 
criteria and procedures are applied in 
a manner which is non-discriminatory 
and that all applications are handled 
without delay. 
Any change to the criteria and 
procedures made during the course of 
an application shall be applied in a 
non-discriminatory manner to all 
applicants whose applications are 
under consideration. 
Any right to expropriate private 
property or any right to use public 
ground shall be granted in a non­
discriminatory manner. 
In so far as the public interest is taken 
into consideration when granting a 
right of expropriation or a right to use 
public ground, a line, an LNG facility 
or a storage facility shall be deemed 
of public interest if: 
the line or the LNG facility or the 
storage facility is necessary to meet 
supply, transmission or distribution 
requirements which cannot be satisfied 
by the existing systems; or 
73 
(ii) a substantial part of the capacity of 
the line, of the LNG facility or of the 
storage facility is either open for use 
by third parties, or made available to 
the public at a reasonable and 
equitable price. 
7. Member States may attach conditions 
and requirements to the licence, 
provided that such conditions and 
requirements are non-discriminatory 
and are no more restrictive than is 
necessary to ensure that the criteria 
are respected. 
8. Member States shall ensure that the 
reasons for any refusal to grant a 
licence are given to the applicant and 
shall establish a procedure enabling 
the applicant to appeal against such 
refusals. 
ARTICLE 5 
1. Subj ect to Article 4(1), Member States 
shall ensure that gas producers and 
suppliers established in their territory 
are able to supply their own premises, 
subsidiaries and affiliate companies 
and customers through a direct line. 
2. Subject to Article 4(1), Member States 
shall ensure that any customer 
established in their territory is able to 
purchase and to be supplied with gas 
from a producer or suppliers through a 
direct line. 
ARTICLE 6 
1. Member states shall ensure that gas 
producers and suppliers established in 
their territory are able: (ii) a substantial part of the capacity of 
the line, of the LNG facility or of the 
storage facility is either open for use 
by third parties, or made available to 
the public at a reasonable and 
equitable price. 
6. Member States may attach conditions 
and requirements to the licence, 
provided that such conditions and 
requirements are non-discriminatory 
and are no more restrictive than is 
necessary to ensure that the criteria 
are respected. 
7. Member States shall ensure that the 
reasons for any refusal to grant a 
licence are objective and non­
discriminatory and are given to the 
applicant. They shall establish a 
procedure enabling the applicant to 
appeal against such refusals. 
ARTICLE 5 
(becomes Article 18) 
ARTICLE 6 
becomes Article 17(1) (ii) 
74 
(i) to supply their own premises, 
subsidiaries and affiliate companies 
in the same Member State or in 
another Member State through the use 
of the interconnected system, subject 
to the conclusion of agreements with 
the relevant transmission companies 
and distribution system operators 
pursuant to Articles 12 or 19 
respectively. 
(ii) to supply or to contract to supply 
customers in the same Member State 
or in another Member State, through 
the use of the interconnected system, 
subject to the conclusion of 
agreements with the relevant 
transmission companies and 
distribution system operators pursuant 
to Articles 12 or 19 respectively. 
2. Member States shall ensure that any 
customer established in their territory 
is able to purchase and to be supplied 
or to contract to purchase and to be 
supplied with gas to be delivered from 
a producer or producers through the 
use of the interconnected system, 
subject to the conclusion of 
agreemments with the relevant 
transmission companies and 
distribution system operators pursuant 
to Articles 12 or 19 respectively. A 
Member State may limit such use of 
the interconnected system: 
- to companies for the supply of sites 
whose overall individual 
consumption exceeds 25 mio m3 
per year or such lower figure as 
may be specified by the Member 
State; 
75 
to distribution companies, indivually 
or in association, whose individual 
or aggregated sales represent at 
least 1% of overall consumption in 
the Member State concerned or 
such lower figure as may be 
specified by the Member State. 
76 
Chapter III 
Transmission system operation 
ARTICLE 7 
Member States shall take the measures 
necessary to ensure that transmission 
companies act in accordance with Articles 
8 to 13. 
ARTICLE 8 
1. The task of operating the integrated 
grid system shall be assured 
individually by each transmission 
company which shall maintain a secure, 
reliable and efficient natural gas system 
in its part of the interconnected system. 
2. Each transmission company shall use 
its best endeavours to develop the 
transmission system and to achieve the 
expeditious construction of such new 
transmission capacity as may be needed 
to enable the transmission capacity to 
adjust to the demand for the use of that 
capacity. 
3. Each transmission company shall take 
all necessary steps to ensure the 
availability of all ancillary services 
necessary to maintain a high level of 
reliability and security of its system. 
4. Each transmission company shall 
ensure the availability of metered 
operational data and provide interested 
parties with all information necessary 
for settlement and payment. Chapter III 
Storage and transport 
ARTICLE 5 
Member States shall take the measures 
necessary to ensure that transmission 
companies act in accordance with Articles 
6 to 10. 
ARTICLE 6 
1. The task of operating the integrated 
grid system shall be assured 
individually by each transmission 
company which shall maintain a secure, 
reliable and efficient natural gas system 
in its part of the interconnected system. 
2. Each transmission company shall use 
its best endeavours to develop the 
transmission system and to achieve the 
expeditious construction of such new 
transmission capacity as may be needed 
to enable its supply capacity to adjust 
to demand. 
Each transmission company shall take 
all necessary steps to ensure the 
availability of all ancillary services 
necessary to maintain a high level of 
reliability and security of its system. 
77 
5. Each transmission company shall not 
discriminate between users or classes 
of users of the system or between users 
of the system and any of the 
transmission company's other 
businesses, any businesses affiliated to 
it, or any of its shareholders. 
ARTICLE 9 
1. Each transmission company shall 
provide to any other transmission 
company or distribution system 
operator with which its system is 
connected sufficient information to 
ensure the secure and efficient 
operation and the coordinated 
development of the interconnected 
system. 
2. Each transmission company shall 
facilitate transfers of natural gas to and 
from connected systems. To that end 
the transmission company shall 
conclude all agreements necessary with 
other relevant transmission companies 
or distribution system operators to 
enable a user connected to its system to 
use the interconnected system. 
ARTICLE 10 
Each transmission.company shall prepare 
and publish an annual estimate on the 
demand for gas in its area and on the 
system transmission capability including 
transfer capabilities to and from 
neighbouring systems. The estimate shall 
cover a period of at least 10 years 
beginning from the year in which it is 
prepared. 4. Each transmission company shall not 
discriminate between users or classes of 
users of the system and any of its 
affiliates or shareholders. 
ARTICLE 7 
1. Each transmission company shall 
provide to any other transmission 
company or distribution system 
operator with which its system is 
interconnected sufficient information to 
ensure the secure and efficient 
operation and the coordinated 
development of the interconnected 
system. 
2. Each transmission company shall 
facilitate transfers of natural gas to and 
from connected systems. To that end 
the transmission company shall 
conclude all necessary agreements with 
other relevant transmission companies 
or distribution system operators to 
enable a user connected to its system to 
use the interconnected system. 
ARTICLE 8 
Each transmission company shall draw up 
and publish an annual estimate on the 
demand for gas in its area and on the 
transmission system's capacity, including 
transfer capacity to and from neighbouring 
systems. The estimate shall cover a 
period of at least 10 years beginning from 
the year in which it is drawn up. 
78 
ARTICLE 11 
1. Within a period not exceeding one year 
from the date laid down in Article 27, 
each transmission company shall 
develop and publish Technical Rules, 
which shall establish the minimum 
technical design and operational 
requirements for the connection to its 
system of LNG facilities, storage 
facilities, customers' natural gas 
installations, other transmission or 
distribution systems, and direct 
transmission and distribution lines. 
These requirements shall be objective 
and non-discriminatory and not disturb 
the functioning of the internal market 
for gas. 
2. The Technical rules shall be approved 
by the Member State concerned, which 
shall, in accordance with Article 8 of 
Council Directive 83/189/EEC(3), notify 
to the Commission the rules in respect 
of performance requirements and 
connections. 
3. The Technical Rules shall address at 
least the following: 
(a) pressure requirements; 
(b) conditions for connection to and 
operation of the transmissionsystem, 
including tariff metering. 
(3) OJ No L 109, 26.4.1983, p. 8. ARTICLE 9 
1. Within a period not exceeding one year 
from the date laid down in Article 23, 
each transmission company shall 
develop and publish technical rules, 
which shall establish the minimum 
technical design and operational 
requirements for the connection to its 
system of LNG facilities, storage 
facilities, customers' natural gas 
installations, other transmission or 
distribution systems, and direct 
transmission and distribution lines. 
These requirements shall ensure the 
interoperability of systems, shall be 
objective and non-discriminatory and 
shall not disturb the functioning of the 
internal market for gas. 
2. The technical rules shall be approved 
by the Member State concerned, which 
shall, in accordance with Article 8 of 
Council Directive 83/189/EEC(4), notify 
to the Commission the rules in respect 
of performance requirements and 
connections. 
3. The technical rules shall address at 
least the following: 
(a) pressure requirements; 
(b) conditions for connection to and 
operation of the transmission system, 
including tariff metering. 
(4) OJ No L 109, 26.4.1983, p. 8. 
79 
4. The Technical Rules shall be defined 
by reference to European specifications 
where these exist. 
In the absence of European 
specifications, the Technical Rules 
shall as far as possible be defined by 
reference to other standards having 
currency within the Community. 
5. The Technical Rules shall be 
implemented by the transmission 
company which shall ensure 
compliance by all system users. In 
instances where a user is subject to 
differing Technical Rules which are 
applied by two or more transmission 
companies or distribution system 
operators, the transmission company 
shall use its best endeavours to resolve 
the differences in cooperation with the 
other transmission companies and with 
the distribution system operators 
concerned. 
6. In the preparation, implementation and 
enforcement of the Technical Rules, 
there shall be no discrimination 
between users or classes of users of a 
system except as necessary to ensure 
security and quality of supply. The 
Rules shall not impose unreasonable 
requirements or unduly inhibit access 
to the system. 
ARTICLE 12 
1. System users and prospective systems 
users may apply to a transmission 
company to enter into an agreement for 
connection to and/or use of its system 
or of an LNG facility or any storage 
facility owned or operated by the 
transmission company. 4. The technical rules shall be defined by 
reference to European specifications 
where these exist. 
In the absence of European 
specifications, the technical rules shall 
be defined as far as possible by 
reference to other standards having 
currency within the Community. 
5. The technical rules shall be 
implemented by the transmission 
company which shall ensure 
compliance by all system users. In 
instances where a user is subject to 
differing technical rules which are 
applied by two or more transmission 
companies or distribution system 
operators, the transmission company 
shall use its best endeavours to resolve 
the differences in cooperation with the 
other transmission companies and with 
the distribution system operators 
concerned. 
6. In the preparation, implementation and 
enforcement of the technical rules, 
there shall be no discrimination 
between users or classes of users of a 
system except as necessary to ensure 
security and quality of supply. The 
rules shall not impose unreasonable 
requirements or unduly inhibit access to 
the system. 
80 
2. In response to such an application, 
the transmission company shall 
propose an agreement for connection 
to and/or use of the interconnected 
system or of the LNG facilities or the 
storage facilities. The transmission 
company may, however, refuse to 
make a proposal for an agreement for 
use of the system including the 
abovementioned facilities, if such use 
would prejudice the transmission or 
storage of natural gas or the import 
or the export of LNG in fulfilment of 
any statutory obligation or contractual 
commitments. The reasons for any 
refusal shall be given to the 
applicants. 
All applications shall be handled in a 
timely manner and a response shall, 
in any event, be given within three 
months following receipt of the 
application. 
3. The proposal for an agreement shall 
include terms relating to an obligation 
on the part of the transmission 
company: 
(i) to accept into the relevant system at 
such entry point or points such 
quantities of natural gas as may be 
specified in the application, and/or 
(ii) to accept into the relevant LNG 
facilityor storage facility such 
quantities of natural gas as may be 
specified in the application, and/or 
(iii) to enable the delivery to be made of 
such quantities of natural gas as are 
referred to in (i) and (ii) (less any 
transmission losses) at such exit point 
or points on the relevant system as 
may be specified in the application. 
81 
4. A transmission company shall, on 
request and at a reasonable charge, 
make available to a potential user, a 
statement of opportunities for 
transactions involving the use of its 
system including any LNG facilities 
and storage facilities which form part 
of the system. 
This statement of opportunities shall 
contain sufficient information to enable 
a potential user to make a reasonable 
assessment of those opportunities. 
5. Each transmission company shall 
publish the basis upon which the terms 
for connection to and use of the system 
will be set. The publication shall 
contain sufficient information to enable 
a potential user to make a reasonable 
assessment of the charges that would 
be payable for natural gas transactions 
involving the use of the system, 
including LNG facilities and storage 
facilities which form part of the 
system. 
6. The basis upon which the transmission 
company's terms are set shall be such 
that the charges that would be payable 
are reasonably related to the long-term 
costs incurred in the provision of the 
relevant service, together with a 
reasonable rate of return on capital 
employed in the provision of that 
service. 
7. The transmission company shall not 
discriminate between any persons or 
classes of persons in the terms for a 
connection to its system or for the use 
of its system. i 
82 
8. The contractual right of usage of LNG 
facilities, storage or transmission 
capacities shall be lost if these 
capacities are not used. If capacities are 
partly unused the same shall apply to 
the unused part of the capacity. 
ARTICLE 13 
Each transmission company shall preserve 
the confidentiality of commercially-
sensitive information obtained in the 
course of carrying out its business. ARTICLE 10 
Each transmission company shall preserve 
the confidentiality of commercially 
sensitive information obtained in the 
course of carrying out its business. 
83 
Chapter IV 
Distribution system operation 
ARTICLE 14 
1. Member States shall define the rights 
and the public service obligations of 
distribution companies and the rights 
and obligations of their customers. 
Member States may lay upon 
distribution companies an obligation to 
supply the customers located in a given 
area, with respect to the volume for 
which they do not exercise their right, 
or do not have the right to be supplied 
by other suppliers, in accordance with 
Articles 5 and 6. Without prejudice to 
Article 3(3), the tariff for such 
supplies may be regulated, for instance 
to ensure equal treatment of the 
customers concerned. 
Member States shall, establish rules: 
- on the procedure to be followed by 
customers who wish to terminate 
supply by the distribution company, 
in particular as regards the minimum 
notice period for termination, which 
shall not exceed three months; 
- on the procedure to be followed by 
customers who wish to resume 
supply from the distribution 
company, in particular on the 
minimum notice period for 
resumption, which shall not exceed 
six months. Chapter IV 
Distribution system operation 
ARTICLE 11 
1. Member States shall determine, in 
accordance with Community law, the 
rights and the public service obligations 
referred to Article 3(2) assigned to 
distribution companies, together with 
the rights and obligations of their 
customers. 
2. Member States may impose on 
distribution companies, an obligation to 
supply the customers located in a given 
area. The tariff for such supplies may 
be regulated, for instance to ensure 
equal treatment of the customers 
concerned. 
84 
4. Member States shall designate or shall 
require the undertakings which own or 
are responsible for distribution systems 
(including natural gas lines forming 
part thereof) to designate a distribution 
system operator, which has the 
obligation to operate and to ensure the 
maintenance and development of the 
distribution system in a given area. 
5. Member States shall ensure that the 
distribution system operator acts in 
accordance with the provisions in 
Articles 15 to 20. 
ARTICLE 15 
1. The distribution system operator shall 
maintain a secure, reliable and efficient 
natural gas distribution system in its 
area. 
2. The distribution system operator shall 
use its best endeavours to develop the 
distribution system and to achieve the 
expeditious construction of such new 
distribution capacity as may be needed 
to enable the distribution capacity to 
adjust to the demand for the use of that 
capacity. 
3. The distribution system operator shall 
ensure the availability of metered 
operational data and provide interested 
parties with all information necessary 
for settlement and payment. 
4. The distribution system operator shall 
not discriminate between users or 
classes of users of the system or 
between users of the system and any of 
the undertaking's other businesses, any 
businesses affiliated to it, or any of its 
shareholders. 3. Member States shall designate or shall 
require undertakings which own or are 
responsible for distribution systems 
(including natural gas lines forming 
part thereof) to designate a system 
operator, charged with operating and 
ensuring the maintenance and 
development of the distribution system 
in a given area. 
4. Member States shall ensure that the 
distribution system operator acts in 
accordance with the provisions in 
Articles 12, 13 and 14. 
ARTICLE 12 
1. The system operator shall maintain a 
secure, reliable and efficient natural gas 
distribution system in its area. 
2. The system operator shall ensure that 
new distribution capacity is constructed 
as may be needed to enable capacity to 
adjust to demand. 
85 
ARTICLE 16 
1. The distribution system operator shall 
provide to any transmission company 
or to the distribution system operator 
of any system with which its system 
is interconnected sufficient 
information to ensure the secure and 
efficient operation and the coordinated 
development of the interconnected 
natural gas system. 
2. The distribution system operator shall 
cooperate with relevant transmission 
companies and distribution system 
operators to define all the agreements 
necessary for the use of the 
interconnected system by a user 
connected to its system. 
ARTICLE 17 
1. The distribution system operator shall 
prepare annually a report on the 
quality of supply and the quality of 
service. The report shall be brought 
to the attention of die authority 
competent for the neighbouring areas, 
and shall be made available to the 
Member State and the SOEC upon 
request. 
2. The Commission shall establish the 
appropriate criteria for the content of 
the reports in order to ensure their 
comparability on Community level. ARTICLE 13 
1. The system operator shall draw up and 
publish an annual report on the quality 
of supply and the quality of service. 
2. The Commission shall establish the 
appropriate criteria for the content of 
the reports in order to ensure their 
comparability at Community level. 
86 
ARTICLE 18 
1. Within a period not exceeding one 
year from the date laid down in 
Article 27, the distribution system 
operator shall develop and publish 
Technical Rules, which shall 
establish the minimum technical 
design and operational requirements 
for the connection to its system of 
storage facilities, customers' natural 
gas installations, transmission and 
other distribution systems and direct 
transmission and distribution lines. 
These requirements shall be objective 
and non-discriminatory and not 
disturb the functioning of the internal 
market for gas. 
2. The Technical rules shall be approved 
by the Member State concerned, 
which shall, in accordance with 
Article 8 of Directive 83/189/EEC, 
notify to the Commission the rules in 
respect of performance requirements 
and connections. 
3. The Technical Rules shall address at 
least the following: 
(a) pressure requirements; 
(b) conditions for connection to and 
operation of the distribution system 
including tariff metering. 
4. The Technical Rules shall be defined 
by reference to European 
specifications where these exist. 
In the absence of European 
specifications, the Technical Rules 
shall as far as possible be defined by 
reference to other standards having 
currency within die Community. 
87 
5. Technical rules shall be complied 
with, implemented and enforced by 
the distribution system operator. In 
instances where a user is subject to 
differing Technical Rules which are 
applied by two or more transmission 
companies or distribution system 
operators, the distribution system 
operator shall use its best endeavours 
to resolve the differences in 
cooperation with the other system 
operator or with the transmission 
companies concerned. 
6. In the preparation, implementation and 
enforcement of the Technical Rules, 
there shall be no discrimination 
between users or classes of users of a 
system except as necessary to ensure 
security and quality of supply. The 
Rules shall not impose unreasonable 
requirements or unduly inhibit access 
to the system. 
ARTICLE 19 
1. System users and prospective system 
users may apply to the distribution 
system operator to enter into an 
agreement for connection to and/or 
use of the interconnected system or of 
a storage facility owned or operated 
by the distribution system operator. 
88 
2. In response to such an application, 
the distribution system operator 
shall propose an agreement, for 
connection to and/or use of the 
interconnected system or of the 
storage facility. The distribution 
system operator may, however, 
refuse to make a proposal for an 
agreement if such use would 
prejudice the distribution of natural 
gas in fulfilment of any statutory 
obligation or contractual 
commitments. The reasons for any 
refusal shall be given to the 
applicant. 
All applications shall be handled in 
a timely manner and, a response 
shall, in any event, be given within 
three months following receipt of 
the application. 
3. The proposal for an agreement shall 
include terms relating to an 
obligation on the part of the 
distribution system operator: 
(i) to accept into the relevant system at 
such entry point or points such 
quantities of natural gas as may be 
specified in the application; and/or 
(ii) to accept into the relevant storage 
facility such quantities of natural gas 
as may be specified in the 
application; and/or 
(iii) to enable the delivery to be made of 
such quantities of natural gas as are 
referred to in (i) and (ii) (less any 
transmission losses) at such exit 
point or points on the relevant 
system as may be specified in the 
application. 
89 
4. The distribution system operator 
shall, on request and at a reasonable 
charge, make available to a potential 
user a statement of opportunities for 
natural gas transactions involving 
the use of the distribution system, 
including any storage facilities 
which form part of the system. 
This statement of opportunities shall 
contain sufficient information to 
enable a potential user to make a 
reasonable assessment of those 
opportunities. 
5. The distribution system operator 
shall publish the basis upon which 
the terms for connection to and/or 
use of the system will be set. The 
publication shall contain sufficient 
information to enable a potential 
user to make a reasonable 
assessment of the charges that 
would be payable for natural gas 
transactions involving the use of the 
system including any storage 
facilities which form part of the 
system. 
6. The basis upon which the 
distribution system operator's terms 
are set shall be such that the charges 
that would be payable are 
reasonably related to the long-term 
costs incurred in the provision of the 
relevant service, together with a 
reasonable rate of return on the 
capital employed in the provision of 
that service. 
7. The distribution system operator 
shall not discriminate between any 
persons or classes of persons in the 
terms for a connection to its system 
or for the use of its system. 
90 
The contractual right of usage of 
distribution capacities shall be lost if 
these capacities are not used. If 
capacities are partly unused the 
same shall apply to the unused part 
of the capacity. 
ARTICLE 20 
The distribution system operator shall 
preserve the confidentiality of 
commercially sensitive information 
obtained in the course of carrying out its 
business. ARTICLE 14 
The distribution system operator shall 
preserve the confidentiality of 
commercially sensitive information 
obtained in the course of carrying out its 
business. 
91 
Chapter V 
Unbundling and transparency of accounts 
ARTICLE 21 
Member States shall make the necessary 
arrangements for ensuring that vertically 
integrated natural gas companies organize 
their natural gas production, transmission, 
storage and distribution activities - as the 
case may be - in as many separate 
divisions as there are activities. Any State 
aid granted to one division may not 
benefit another division. 
ARTICLE 22 
1. Member States shall take the necessary 
steps to ensure that the accounts of 
natural gas companies are drawn up in 
accordance with paragraphs 2 to 9. Chapter V 
Unbundling and transparency of accounts 
ARTICLE 15 
Member States or any competent authority 
they designate shall have right of access to 
the accounting documents of production, 
transmission or distribution companies 
which they must consult in carrying out 
their checks. 
ARTICLE 16 
1. Member States shall take the necessary 
steps to ensure that the accounts of 
natural gas companies are drawn up in 
accordance with paragraphs 2 to 8. 
92 
2. Vertically integrated companies shall, 
in their internal accounting, keep 
separate accounts for each division 
established in accordance with Article 
21, as they would be required to do if 
the activities in question were carried 
out by separate companies, and shall 
publish a separate balance sheet and a 
profit and loss account for each 
division in their annual management 
report. 
3. Natural gas companies, whatever their 
system of ownership or legal form, 
shall draw up, publish and submit to 
audit, their annual accounts in 
accordance with the rules of national 
legislation concerning the annual 
accounts of limited liability 
companies adopted to implement 
Council Directive 78/660/EEC(4). 
Undertakings which are not legally 
obliged to publish their annual 
accounts shall hold a copy of these at 
the disposition of the public in their 
head office. 
4. In addition, the profit and loss 
accounts of natural gas transmission 
companies and the accounts of the 
transmission division of vertically 
integrated companies shall distinguish 
natural gas supply costs from 
transmission costs and other charges. 
5. The accounts of natural gas storage 
companies and the accounts of the 
storage division of vertically 
integrated companies shall distinguish 
natural gas supply costs from cushion 
gas costs and other charges. 
(4) OJNoL 222, 14.8.1978, p. 11 Vertically integrated companies shall, 
in their internal accounting, keep 
separate accounts for their natural gas 
production, transmission, storage and 
distribution activities, as they would 
be required to do if the activities in 
question were carried out by separate 
companies, and shall publish a 
separate balance sheet and a profit 
and loss account for each activity in 
their annual management report. 
Natural gas companies, whatever their 
system of ownership or legal form, 
shall draw up, publish and submit to 
audit, their annual accounts in 
accordance with the rules of national 
law concerning the annual accounts 
of limited liability companies adopted 
to implement Council Directive 
78/660/EEC(5). Undertakings which 
are not legally obliged to publish 
their annual accounts shall hold a 
copy of these at the disposition of the 
public in their head office. 
4. In addition, the profit and loss 
accounts of natural gas transmission 
companies and the accounts of the 
"transmission" activity of vertically 
integrated companies shall distinguish 
natural gas supply costs from 
transmission costs and other charges. 
5. The accounts of natural gas storage 
companies and the accounts of the 
"storage" activity of vertically 
integrated companies shall distinguish 
natural gas supply costs from cushion 
gas costs and other charges. 
(5) OJ No L 222, 14.8.1978, p. 11, 
93 
6. The accounts of natural gas 
distribution companies and the 
accounts of the distribution division 
of vertically integrated companies 
shall distinguish: 
(a) natural gas supply costs from 
distribution costs and other charges; 
(b) sales of natural gas for industrial 
purposes from sales for other 
purposes. 
7. Companies shall specify in notes to 
die annual accounts the rules for the 
allocation of charges which they 
follow in drawing up the separate 
accounts pursuant to paragraph 2. 
These rules may be amended only in 
exceptional cases. Such amendments 
must be mentioned in the annual 
management report and must be duly 
substantiated. 
8. The depreciation rules applied to the 
different categories of fixed asset 
shall appear separately in the notes 
among the rules of valuation. 
9. The annual accounts shall indicate in 
die notes any important transaction 
conducted with associated or 
affiliated companies within the 
meaning of Article 33 of Directive 
83/349/EEC(5) or with companies 
which belong to the same 
shareholders. 
(5) OJNoL 193, 18.7.1983, p. 1. Companies shall specify in notes to 
the annual accounts the rules for the 
allocation of charges which they 
follow in drawing up the separate 
accounts pursuant to paragraph 2. 
These rules may be amended only in 
exceptional cases. Such amendments 
must be mentioned in the annual 
management report and must be duly 
substantiated. 
The depreciation rules applied to the 
different categories of fixed asset 
shall appear separately in the notes 
among the rules of valuation. 
The annual accounts shall indicate in 
the notes any important transaction 
conducted with associated companies 
within the meaning of Article 33 of 
Directive 83/349/EEC(6> or affiliated 
companies or companies which 
belong to the same shareholders. 
(6) OJNoL 193, 18.7.1983, p. 1. 
94 
Chapter VI 
Final provisions Chapter VI 
Access to the system 
ARTICLE 17 
1. Member States shall take the 
necessary measures for: 
(i) natural gas undertakings to be able to 
conclude supply contracts with final 
customers who are large industrial 
consumers and with distribution 
companies on the basis of voluntary 
commercial agreement; 
(ii) producers and suppliers of natural gas 
to be able to supply their own 
premises, subsidiaries and affiliate 
companies in the same Member State 
or in another Member State, by 
means of the interconnected system, 
subject to the conclusion of 
agreements with the relevant 
transmission companies and 
distribution systems operators; 
2. The contracts must be negotiated with 
the natural gas companies which are 
the systems operators concerned. 
3. Member States shall ensure that the 
parties negotiate in good faith and 
that none of them abuses its 
negotiating position by preventing the 
successful outcome of those 
negotiations. The system operator 
may refuse access where the contract 
in question would prevent him from 
carrying out the public service 
obligations referred to in Article 3(2) 
which are assigned to him. 
95 
4. Member States shall designate a 
competent authority, which must be 
independent of the parties, to settle 
disputes relating to the contracts and 
negotiations in question. Recourse to 
this authority shall be had without 
prejudice to the exercise of rights of 
appeal under Community law. 
ARTICLE 18 
1. Subject to Article 4, Member States 
shall ensure that all the producers and 
suppliers of natural gas established in 
their territory are able to supply their 
own establishments, affiliates and 
customers by means of a direct line. 
2. Subject to Article 4, Member States 
shall ensure that any customer 
established in their territory is able to 
purchase and to be supplied with 
natural gas by a producer or supplier by 
means of a direct line. 
96 
Chapter VI 
Final provisions 
ARTICLE 23 
In the event of a sudden crisis in the 
energy market and where physical safety 
or security of persons, apparatus or 
installations or system integrity is 
threatened, a Member State may take the 
necessary protection measures. 
Such measures must cause the least 
possible disturbance in the functioning of 
the internal market and must no be wider 
in scope than is strictly necessary to 
remedy the sudden difficulties which have 
arisen. 
The Member State concerned shall 
without delay notify these measures to the 
other Member States and to the 
Commission, which may decide that the 
Member State concerned shall amend or 
abolish such measures in so far as they 
distort competition and adversely affect 
trade to an extent contrary to the common 
interest. Chapter VII 
Final provisions 
ARTICLE 19 
In the event of a sudden crisis in the 
energy market and where the physical 
safety or security of persons, apparatus or 
installations or system integrity is 
threatened, a Member State may take the 
necessary protection measures. 
Such measures must cause the least 
possible disturbance in the functioning of 
the internal market and must not be wider 
in scope than is strictly necessary to 
remedy the sudden difficulties which have 
arisen. 
The Member State concerned shall 
without delay notify these measures to the 
other Member States and to the 
Commission, which may decide that the 
Member State concerned shall amend or 
abolish such measures, in so far as they 
distort competition and adversely affect 
trade to an extent contrary to the common 
interest. 
97 
ARTICLE 24 
1. If one or more companies within a 
Member State's territory comes into 
major economic difficulties because 
their sales of natural gas have fallen 
below the level of the minimum 
offtake guarantees contained in gas 
purchase contracts entered into before 
1 July 1991, the Member State 
concerned shall notify the 
Commission of any plan to take 
measures to alleviate these economic 
difficulties. Such notification shall be 
made in advance and shall contain all 
relevant information on the nature and 
extent of the difficulties and on their 
causes. The measures must be 
temporary and limited to those which 
are necessary to alleviate the 
difficulties in question, and must not 
adversely affect trade between 
Member States to an extent contrary 
to the common interest. The plan shall 
only be put into effect by the Member 
State with the approval of the 
Commission, which shall give its 
decision within three months of the 
notification. 
2. The Commission shall make a report 
to the European Parliament and the 
Council on the operation of 
paragraph 1 by 31 December 1994, 
and shall propose any appropriate 
measures in relation to the provisions 
of this Directive. ARTICLE 20 
If one or more companies within a 
Member State's territory comes into 
major economic difficulties because 
their sales of natural gas have fallen 
below the level of the minimum 
offtake guarantees contained in gas 
purchase contracts entered into before 
1 July 1991, the Member State 
concerned shall notify the Commission 
of any plan to take measures to 
alleviate these economic difficulties. 
Such notification shall be made in 
advance and shall contain all relevant 
information on the nature and extent 
of the difficulties and on their causes. 
The measures must be temporary and 
limited to those which are necessary 
to alleviate the difficulties in question, 
and must not adversely affect trade 
between Member States to an extent 
contrary to the common interest. The 
plan cannot be put into effect by the 
Member State unless it has been 
approved by the Commission, which 
shall give its decision within three 
months of the notification. 
The Commission shall make a report 
to the European Parliament and the 
Council on the operation of paragraph 
1 by 31 December 1996, and shall 
propose any appropriate measures in 
relation to the provisions of this 
Directive. 
98 
ARTICLE 25 
Member States shall establish a dispute 
resolution procedure by which the parties 
can settle disputes on matters covered by 
this Directive. 
ARTICLE 26 
Each Member State shall establish a 
consultative procedure enabling system 
users including domestic consumers in its 
territory , at least once a year, on matters 
arising under this Directive, and in 
particular on the transmission and 
distribution system reports established 
pursuant to Articles 10 and 17. 
ARTICLE 27 
Member States shall bring into force the 
laws, regulations and administrative 
provisions necessary to comply with this 
Directive by 31 December 1992. They 
shall forthwith inform the Commission 
thereof. 
When Member States adopt these 
measures, these shall contain a reference 
to this Directive or shall be accompanied 
by such reference on the occasion of their 
official publication. The methods of 
making such reference shall be laid down 
by Member States. ARTICLE 21 
Member States shall establish a dispute 
resolution procedure by which the parties 
can settle disputes on matters covered by 
this Directive, in accordance with 
Community rules. 
ARTICLE 22 
Each Member State shall establish a 
consultative procedure enabling system 
users including domestic consumers in its 
territory, at least once a year, on matters 
arising from the implementation of this 
Directive, and in particular on the 
transmission and distribution system 
reports drawn up pursuant to Articles 8 
and 13 respectively. 
99 
ARTICLE 23 
1. The Commission will present a report 
to the Council and the European 
Parliament before 31 December 1995 
and will attach to that report any 
harmonization proposals necessary to 
the effective operation of the internal 
natural gas market. 
2. The Council and the 
European Parliament will give their 
views on such proposals 
before 12 December 1997. 
ARTICLE 28 
The Commission shall review the 
application of this Directive and make 
appropriate proposals with a view to 
establishing the internal market for natural 
gas. On the basis of these proposals the 
Council shall make the necessary 
amendments to this Directive, for 
implementation by 1 January 1996. ARTICLE 24 
The Commission shall review the application of 
this Directive and make appropriate proposals 
with a view to establishing the internal market 
for natural gas. On the basis of these proposals 
the Council shall make the necessary 
amendments to this Directive, for 
implementation on 1 January 1999. 
ARTICLE 25 
Member States shall bring into force the laws, 
regulations and administrative provisions 
necessary to comply with this Directive by 1 
July 1994. They shall immediately inform the 
Commission thereof. 
When Member States adopt these measures, 
these shall contain a reference to this Directive 
or shall be accompanied by such reference at the 
time of their official publication. The procedure 
for such reference shall be adopted by Member 
States. 
100 
ARTICLE 29 
This Directive is addressed to the Member 
States. 
Done at Brussels, For the Council 
The President ARTICLE 26 
This Directive shall enter into force on the 
twentieth day following that of its publication in 
the Official Journal of the European 
Communities. 
ARTICLE 27 
This Directive is addressed to the Member 
States. 
Done at Brussels, 
For the European Parliament 
The President For the Council 
The President 
101 
ISSN 0254-1475 
COM(93) 643 final 
DOCUMENTS 
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