COMMISSION OF THE EUROPEAN COMMUNITIES 
Brussels, 24.03.1997 
COM(97) 69 final 
95/0208 (SYN) 
Amended proposal for a 
COUNCIL DIRECTIVE 
to introduce rational planning techniques in the electricity and gas 
distribution sectors. 
(presented by the Commission pursuant to Article 189 a (2) 
of the EC-Treaty) 

EXPLANATORY MEMORANDUM 
The Commission adopted on 29 September 1995 a proposal for a Directive on the 
introduction of rational planning techniques in the electricity and gas distribution 
sectors. The proposal is based on Article 130s (1) of the Treaty which foresees the co­
operation procedure with the European Parliament. The European Parliament gave its 
First Opinion on 13 November 1996. Fourteen amendments were voted and accepted. 
In general, the amendments have improved the text. 
Five amendments (No 6, 7, 8, 9 and 10) were accepted by the Commission without 
reserve. Four amendments (No 5, 12, 13 and 14) were partially accepted. 
Five amendments were rejected in full. 
Am. 1 makes reference to a Legal Basis of Article 100A which the Commission does 
not consider to be valid. 
Am. 2 makes reference to a Legal Basis of Article 100A which the Commission does 
not consider to be valid. 
Am. 3 makes reference to a Legal Basis of Article 100A which the Commission does 
not consider to be valid. 
Am. 4 makes reference to a Legal Basis of Article 100A which the Commission does 
not consider to be valid. 
Am. 11 the amendment introduces ambiguity when speaking of 'cost to the consumer' 
which the Commission considers weakens the Directive. 
The amendments rejected in part are: 
Am. 5 second part, makes reference to a Legal Basis of Article 100A which the 
Commission does not consider to be valid. 
Am. 12 first part, the Commision considers setting a quantified objective for a 
Directive to be inappropriate. 
Am. 13 point a) the Commission considers the amendment to be too limiting. 
point d) the wording of the amendment is considered to be too constraining. 
Am 14. point e) the use of the words 'make compulsory' is considered too 
constraining. 
ORIGINAL TEXT AMENDED TEXT 
Proposal for a 
COUNCIL DIRECTIVE 
to introduce rational planning 
techniques in the electricity and 
gas distribution sectors. 
THE COUNCIL OF THE EUROPEAN 
UNION 
Having regard to the Treaty establishing the 
European Community, and in particular 
Article 130s para. 1 thereof, 
Having regard to a proposal from the 
Commission,1 
In cooperation with the European 
Parliament,2 as foreseen by Article 189c of 
the Treaty establishing the European Union 
Having regard to the opinion of the 
Economic and Social Committee,3 Proposal for a 
COUNCIL DIRECTIVE 
to introduce rational planning 
techniques in the electricity and 
gas distribution sectors. 
THE COUNCIL OF THE EUROPEAN 
UNION 
Having regard to the Treaty establishing the 
European Community, and in particular 
Article 130s para. 1 thereof, 
Having regard to a proposal from the 
Commission,1 
In cooperation with the European 
Parliament,2 as foreseen by Article 189c of 
the Treaty establishing the European Union 
Having regard to the opinion of the 
Economic and Social Committee,3 
kWNo 
2OJNo 
3 OJ No C240/78 of 15.7.1996 
ORIGINAL TEXT AMENDED TEXT 
Having regard to the opinion of the 
Committee of the Regions4; 
Whereas on 29 October 1990 the Council 
set an objective of the stabilisation of total 
C02 emissions by the year 2000 at the 1990 
level in the Community as a whole; 
Whereas Article 130r of the Treaty 
stipulates that one objective of the action of 
the Community relating to the environment 
shall be to ensure a prudent and rational 
utilisation of natural resources; whereas the 
power generation industry is responsible for 
30% and the natural gas sector for 18% of 
the C02 emissions in the Community5; 
Whereas on the 24 June 1993 the Council of 
Minister adopted a monitoring mechanism 
for C02 emissions and other greenhouse Having regard to the opinion of the 
Committee of the Regions4; 
Whereas on 29 October 1990 the Council 
set an objective of the stabilisation of total 
C02 emissions by the year 2000 at the 1990 
level in the Community as a whole; 
Whereas Article 130r of the Treaty 
stipulates that one objective of the action of 
the Community relating to the environment 
shall be to ensure a prudent and rational 
utilisation of natural resources; whereas the 
power generation industry is responsible for 
30% and the natural gas sector for 18% of 
the C02 emissions in the Community5; 
Whereas on the 24 June 1993 the Council of 
Minister adopted a monitoring mechanism 
for C02 emissions and other greenhouse 
gases6, 
"OJNo.C337/41of 11.11.1996 
5 A View to the Future, Commission of the European Communities, September 1992. 
6O.J. No. L167 of 9.7.93 
ORIGINAL TEXT AMENDED TEXT 
Whereas, given the transnational nature of 
C02 emissions, the introduction of rational 
planning techniques in the gas and electricity 
distribution sectors can only be satisfactorily 
implemented at the level of Member States; 
and whereas, in application of the principle 
of subsidiarity as set out in Art. 3b of the 
Treaty establishing the European 
Community, what is proposed by the 
adoption of the present Directive is the 
establishment of common measures to be 
applied by all Member States, while leaving 
to each Member State the flexibility to adapt 
them to the peculiarities of its energy sector. 
Whereas in its Resolution of 15 January 
1985 on the improvement of energy saving 
programmes in the Member States, the 
Council invited the latter to pursue and Whereas, given the Commission proposals 
for an Internal Energy Market, the 
introduction of rational planning techniques 
in the gas and electricity distribution sectors 
can only be satisfactorily implemented at the 
level of Member States; and whereas, in 
application of the principle of subsidiarity as 
set out in Art. 3b of the Treaty establishing 
the European Community, what is proposed 
by the adoption of the present Directive is 
the establishment of common measures to 
be applied by all Member States, while 
leaving to each Member State the flexibility 
to adapt them to the peculiarities of its 
energy sector. 
Whereas the Commission's White Paper 
'Growth, Competitiveness, Employment. 
The Challenges and Ways Forward into the 
21st Century', has emphasised the urgent 
need to improve European competitiveness; 
Whereas the Commission's White Paper 
'An Energy Policy for the European Union' 
states that the import dependency, currently 
close to half of gross consumption, could 
move towards three quarters by 2020; 
Whereas in its Resolution of 15 January 
1985 on the improvement of energy saving 
programmes in the Member States, the 
Council invited the latter to pursue and 
ORIGINAL TEXT AMENDED TEXT 
where necessary increase their efforts to 
promote the more rational use of energy by 
the further development of integrated 
energy saving policies;7 
Whereas in its Resolution of 16 September 
1986 the Council adopted for the 
Community the objective of achieving a 
more rational use of energy through 
improved energy efficiency and that the 
efficiency of final demand should be 
improved by at least 20% by 1995;8 
Whereas improved energy efficiency will 
impact positively on both the security of 
energy supplies and the environment which 
are global in nature, a high level of 
international co-operation is desirable to 
produce the most positive results; 
Whereas the relationship between the 
electricity and gas distribution companies 
and the final consumer provides an ideal 
opportunity for the companies to influence 
the energy efficiency investment decision of 
the consumers; where necessary increase their efforts to 
promote the more rational use of energy by 
the further development of integrated 
energy saving policies;7 
Whereas in its Resolution of 16 September 
1986 the Council adopted for the 
Community the objective of achieving a 
more rational use of energy through 
improved energy efficiency and that the 
efficiency of final demand should be 
improved by at least 20% by 1995;8 and 
whereas this target has not been achieved 
and so requires greater efforts and 
effectiveness by legislative actions; 
Whereas improved energy efficiency will 
impact positively on both the security of 
energy supplies and the environment which 
are global in nature, a high level of 
international co-operation is desirable to 
produce the most positive results; 
Whereas it is essential, in order to promote 
rational energy use and improve energy 
efficiency, to change the traditional role of 
gas and electricity distributors which is to 
sell energy products by endowing them with 
the role of providers of energy services; 
7 OJ No. C 020, 22.1.1985, p. 29 
8 OJ No. C 241,25.9.1986, p. 3 
(, 
ORIGINAL TEXT AMENDED TEXT 
Whereas all classes of electricity and gas 
consumers, including residential consumers, 
will benefit directly from a more rational 
planning process by the distribution utilities; 
Whereas the Council at its meeting of 5 June 
1989 decided on the establishment of a 
Community action programme for 
improving the efficiency of electricity use9; 
Whereas the Council on the 28 October 
1991 adopted a Community energy 
efficiency programme (SAVE)10 aimed at 
strengthening energy efficiency 
infrastructures within the Community. Whereas, to that end, the Member States 
must, on the one hand, perfect mechanisms 
making it possible to dissociate the volume 
of product sales (electricity and gas) and 
profits, and, on the other, bring about the 
separation of the different activities in the 
energy chain, viz. fuel supply, production, 
transport and distribution of electricity; 
Whereas all classes of electricity and gas 
consumers, including residential consumers, 
will benefit directly from a more rational 
planning process by the distribution utilities; 
Whereas the Council at its meeting of 5 June 
1989 decided on the establishment of a 
Community action programme for 
improving the efficiency of electricity use9; 
Whereas the Council on the 28 October 
1991 adopted a Community energy 
efficiency programme (SAVE)10 aimed at 
strengthening energy efficiency 
infrastructures within the Community. 
' O.J. L157 of 9.6.1989 p.32-34 
J0OJ.L307of8.11.91 
ORIGINAL TEXT AMENDED TEXT 
Whereas the Council and the Parliament 
have established a Fourth Framework 
Programme1 ^or actions in technological 
research, development and demonstration 
and that Integrated Resource Planning 
constitutes an important instrument for the 
use and promotion of new energy 
technologies that the Framework 
Programme will establish, 
HAS ADOPTED THIS DIRECTIVE: Whereas the Council and the Parliament 
have established a Fourth Framework 
Programme11 for actions in technological 
research, development and demonstration 
and that Integrated Resource Planning 
constitutes an important instrument for the 
use and promotion of new energy 
technologies that the Framework 
Programme will establish, 
HAS ADOPTED THIS DIRECTIVE: 
O.J.L 334 of 22.12.94 
i 
ORIGINAL TEXT AMENDED TEXT 
Article 1 
The purpose of this Directive is to 
contribute to the Community objective of 
stabilising carbon dioxide emissions by the 
year 2000 at the 1990 level in the 
Community as a whole while at the same 
time improving the competitiveness of the 
Community economy by improving end-use 
efficiency in the electricity and gas 
distribution sectors through the introduction 
of more rational planning techniques. These 
techniques (hereinafter referred to as 
Integrated Resource Planning) shall evaluate 
investment opportunities in energy supply 
and energy demand reduction on an equal 
economic basis. 
Article 2 
Member States shall take the following steps 
to promote, through a framework of 
measures, the use of integrated resource 
planning as a tool for a more rational 
approach by electricity and gas distribution 
companies to the problem of meeting future 
energy demand: 
a) establish procedures whereby 
electricity and gas distribution 
companies periodically present Article 1 
The purpose of this Directive is to 
contribute to the Community objective of 
stabilising carbon dioxide emissions by the 
year 2000 at the 1990 level in the 
Community as a whole while at the same 
time improving the competitiveness of the 
Community economy by improving end-use 
efficiency in the electricity and gas 
distribution sectors through the introduction 
of more rational planning techniques. These 
techniques shall evaluate investment 
opportunities in energy supply and energy 
demand reduction (including Demand Side 
Management and Combined Heat and 
Power) on an equal economic basis. 
Ar tide 2 
Member States shall take the following steps 
to promote, through a framework of 
measures, the increased use of rational 
planning techniques by electricity and gas 
distribution/supply companies in their 
approach to the problem of meeting future 
energy services demand: 
a) establish procedures whereby 
electricity and gas 
distribution/supply companies 
ORIGINAL TEXT AMENDED TEXT 
b) 
c) integrated resource plans to the 
competent authorities to be 
determined by the Member States. 
The integrated resource plan shall 
evaluate all resource alternatives 
(including demand side 
management) on an equal economic 
basis. 
examine whether the economic 
energy efficiency measures 
identified by the integrated 
resource plan are undertaken. 
review existing legislation in this 
area to ensure that mechanisms are 
established which permit electricity 
and gas distribution companies to 
recover expenditure on energy 
efficiency programmes provided to 
consumers. Such mechanisms 
should ensure that distribution 
companies which undertake 
demand-side management 
programmes are not net revenue 
losers. periodically present to the 
competent authorities to be 
determined by the Member States a 
strategic development plan showing 
how they will meet future demand 
requirements. This resource 
selection plan shall evaluate all 
resource alternatives (including 
demand side management) on an 
equal economic basis. 
b) examine whether the economic 
energy efficiency measures 
identified by (delete) the strategic 
development plan are undertaken. 
c) review existing legislation in this 
area to ensure that mechanisms are 
established which: 
1. permit electricity and gas 
distribution/supply companies to 
sell energy-saving services to 
customers; 
2. do not adversely affect the 
competitive position of electricity 
and gas in relation to other energy 
sources falling outside the scope of 
this directive; 
Such mechanisms should provide 
an incentive for distribution/supply 
companies, or other bodies, to 
1P 
ORIGINAL TEXT AMENDED TEXT 
d) encourage electricity and gas 
distribution companies to: 
set up comprehensive 
information 
programmes aimed at 
informing consumers 
on rational energy 
efficiency choices; 
provide, where 
necessary, incentives to 
consumers to carry out 
energy efficiency 
investments; 
set up demand-side 
management 
programmes targeted utilise cost effective rational 
planning techniques through 
decoupling profits from sales 
volumes; 
d) encourage electricity and gas 
distribution companies to: 
provide energy services 
that meet the needs of 
heat, light and power 
at the lowest cost to 
the customers; 
ensure that customers 
have clearly identified 
costings of energy and 
energy services 
provision; 
set up comprehensive 
information 
programmes aimed at 
informing customers 
about rational energy 
efficiency services; 
provide, where 
necessary, incentives to 
customers to carry out 
energy efficiency 
investments such as 
building insulation; 
set up demand-side 
management 
programmes targeted 
11 
ORIGINAL TEXT AMENDED TEXT 
at low income energy 
consumers who spend 
a disproportionate 
amount of their 
disposable income on 
energy; 
invest in energy 
efficiency through the 
creation of subsidiaries 
offering third party 
financing facilities to 
consumers, or support 
the efforts of existing 
third party financing 
companies; at low income energy 
customers who spend a 
disproportionate 
amount of their 
disposable income on 
energy. Where such 
programmes might 
prove of limited value 
to distribution/supply 
companies it should be 
ensured that social 
costs are not paid for 
by the service 
providers, so that there 
are no cross-subsidies; 
invest in energy 
efficiency through the 
creation of subsidiaries 
offering third party 
financing facilities to 
customers, or support 
the efforts of existing 
third party financing 
companies; 
encourage the 
establishment of 
branches offering 
consumers financing 
mechanisms through 
the intervention of 
third parties and 
support the efforts of 
01 
ORIGINAL TEXT AMENDED TEXT 
e) promote the integration of Demand 
Side Management options into capacity 
tendering procedures in the distribution 
sector where these exist. 
Article 3 
The Member States will co-operate with the 
Commission in carrying out reviews, every 
two years for the next eight years, of the 
results of the measures taken on the basis of 
this Directive. 
Article 4 
1. The Member States shall bring into 
force the provisions necessary to 
comply with this Directive not later 
than They shall 
immediately inform the 
Commission of these measures. 
When Member States adopt these 
provisions, these shall contain a existing companies 
operating that mode of 
financing; 
e) promote the integration of Demand 
Side Management and Demand 
Side Bidding options into capacity 
tendering/contracting procedures 
in the electricity and gas 
distribution/supply sector where 
these exist. 
Article 3 
The Member States will co-operate with the 
Commission in carrying out reviews, every 
two years for the next eight years, of the 
results of the measures taken on the basis of 
this Directive. 
Article 4 
1. The Member States shall bring into 
force the provisions necessary to 
comply with this Directive not later 
than They shall 
immediately inform the 
Commission of these measures. 
When Member States adopt these 
provisions, these shall contain a 
lb 
ORIGINAL TEXT AMENDED TEXT 
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. 
2. Member States shall communicate 
to the Commission the texts of the 
provisions of national law which 
they adopt in the field of governed 
by this Directive. 
Article 5 
This Directive is addressed to the Member 
States. 
Done at Brussels, 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. 
2. Member States shall communicate 
to the Commission the texts of the 
provisions of national law which 
they adopt in the field of governed 
by this Directive. 
Article 5 
This Directive is addressed to the Member 
States. 
Done at Brussels, 
fl 
ISSN 0254-1475 
COM(97) 69 final 
DOCUMENTS 
EN 12 10 
Catalogue number : CB-CO-97-060-EN-C 
ISBN 92-78-16159-4 
Office for Official Publications of the European Communities 
L-2985 Luxembourg 
4$