(22)

The following chapter shall be inserted after Article 22: ‘CHAPTER VIIa NATIONAL REGULATORY AUTHORITIES Article 22a Designation and independence of national regulatory authorities 1. Each Member State shall designate a single national regulatory authority. 2. Member States shall guarantee the independence of the national regulatory authority and shall ensure that it exercises its powers impartially and transparently. For this purpose, Member State shall ensure that, when carrying out the regulatory tasks conferred upon it by this Directive and other relevant legislation , the national regulatory authority: (a) is legally distinct and functionally independent from any other public or private entity; and (b) ║its staff and the persons responsible for its management act independently from any market interest, and (c) does not seek or take direct instructions from any government or other public or private entity when carrying out regulatory tasks . 3. In order to protect the independence of the national regulatory authority, Member States shall, in particular, ensure that: (a) the national regulatory authority has legal personality, financial autonomy and adequate human and financial resources to carry out its duties; (b) the members of the board of the national regulatory authority are appointed for a non-renewable fixed term of at least five but no more than seven years and that for the first mandate, that term shall be two-and-a-half years for half of the members. The members shall be relieved from office during their term only if they no longer fulfil the conditions set out in this Article or have been guilty of serious misconduct under national law; and (c) the budgetary needs of the national regulatory authority are met by direct revenues from energy market operations. Article 22b Policy objectives of the national regulatory authority In carrying out the regulatory tasks specified in this Directive, the national regulatory authority shall take all reasonable measures to achieve the following objectives: (a) the promotion, in close cooperation with the Commission, the Agency, and the national regulatory authorities of other Member States ║ of a competitive, secure and environmentally sustainable internal electricity market within the Community , effective market opening for all consumers and suppliers in the Community , and ensuring that energy supply networks operate in an effective, reliable way, taking into account long-term objectives ; (b) the development of competitive and properly functioning ▐ markets within the Community in view of the achievement of the objective mentioned in point (a); (c) the suppression of any restrictions to electricity trade between Member States, including the development of appropriate cross-border transmission capacities to meet demand and enhance the integration of national markets so as to facilitate unrestrained electricity flows across the Community; (d) the development , in the most cost-effective way, ║ of consumer oriented, secure, reliable and efficient grid systems, promoting ▐ system adequacy, while ensuring energy efficiency and the integration of large and small-scale renewable energy and ensuring distributed generation in both transmission and distribution grids ; (e) facilitating access to the grid for new generation capacity, in particular removing barriers that could prevent access for new market entrants and renewable energies; (f) ensuring that network operators are granted adequate incentives, in both the short and the long term, to increase efficiencies in network performance and foster market integration; (g) ensuring that customers benefit through the efficient functioning of their national market, ensuring consumer protection and promoting effective competition in cooperation with competition authorities ; (h) helping to achieve high standards of universal and public service in electricity supply, contributing to the protection of vulnerable customers, and helping to ensure that the consumer protection measures set out in Annex A are effective; and (i) harmonising necessary data exchange processes. Article 22c Duties and powers of the national regulatory authority 1. The national regulatory authority shall have the following duties , which it shall carry out, where appropriate, in close consultation with other relevant Community or national bodies, transmission system operators and market stakeholders, without prejudice to their specific competencies : (a) establishing or approving, independently and in accordance with transparent criteria, regulated network tariffs and network tariff components; (b) ensuring compliance of transmission and distribution system operators, and, where relevant, system owners, as well as ║ any electricity undertakings, with their obligations under this Directive and other relevant Community legislation, including as regards cross-border issues; (c) cooperating on cross-border issues with the national regulatory authority or authorities of other Member States and with the Agency, including ensuring that there is sufficient interconnection capacity between transmission infrastructures to satisfy an efficient overall market assessment and security-of-supply criterion, without discriminating between supply undertakings in different Member States ; (d) complying with, and implementing, any relevant binding decisions of the Commission and the Agency ║; (e) reporting annually on its activities and the fulfilment of its duties to the Commission, the relevant authorities of the Member States and the Agency ║. Such reports shall cover the steps taken and the results obtained as regards each of the tasks listed in this Article; (f) monitoring compliance with unbundling requirements under this Directive and other relevant Community legislation and ensuring that there are no cross subsidies between transmission, distribution, and supply activities as well as ensuring that distribution and transmission tariffs are set well in advance of the periods during which they are to apply ; (g) reviewing the investment plans of the transmission system operators, and providing in its annual report an assessment of the investment plan of the transmission system operators as regards its consistency with the European-wide 10-year network investment plan mentioned at Article 2c(1) of Regulation (EC) No 1228/2003; the 10-year investment plan shall create incentives for the promotion of investments, and ensure that the quality and size of the workforce are sufficient to meet service obligations; failure by the relevant operator to honour the 10-year investment plan shall result in the imposition of proportionate sanctions by the national regulatory authority on the operator in accordance with recommendations issued by the Agency; (h) approving the annual investment plans of the transmission system operators; (i) monitoring compliance with network security and reliability requirements , setting or approving standards and requirements for quality of service and supply and reviewing past performance in terms of quality of service and supply and network security and reliability rules; (j) monitoring the level of transparency, ensuring compliance of electricity undertakings with transparency obligations; (k) encouraging the development of European interruptible supply contracts; (l) monitoring the level of effective market opening and competition at wholesale and retail levels, including on electricity exchanges, household prices, switching rates, adequate prepayment conditions reflecting actual consumption, connection and disconnection rates , maintenance charges and household complaints in an agreed format, as well as any distortion or restriction of competition in cooperation with competition authorities, including providing any relevant information, bringing any relevant cases to the attention of the relevant competition authorities; (m) monitoring the occurrence of restrictive contractual practices, including exclusivity clauses, which may prevent non-household customers from contracting simultaneously with more than one supplier or restrict their choice to do so and, where appropriate, informing the national competition authorities of such practices; (n) with full regard to the provisions of the Treaty, promoting agreements on a long-term basis between energy consumers and suppliers that contribute to the improvement of the energy production and distribution and, at the same time, allow consumers to share the resulting benefits, provided that such agreement can also contribute to an optimal level of investment in the energy sector; (o) recognising contractual freedom with regard to long-term contracts and the possibility to conclude asset based contracts provided that they are compatible with Community law; (p) monitoring the time taken by transmission and distribution undertakings to make connections and repairs and imposing sanctions in accordance with the guidelines provided by the Agency if such connections and repairs are prolonged without due cause ; (q) without prejudice to the competence of other national regulatory authorities, monitoring high standards of universal and public service for electricity and the protection of vulnerable customers ▐; (r) ensuring that the consumer protection measures set out in Annex A are effective and enforced; (s) publishing recommendations, at least on a yearly basis, on compliance of supply tariffs with Article 3 , paying due attention in those recommendations to the impact on the functioning of the market of regulated prices, namely wholesale and final customer prices ; (t) reporting to the national competition authorities and the Commission those Member States in which regulated tariffs are lower than the market price; (u) establishing standardised rules governing relationships between final customers and suppliers, distributors and metering system operators, which cover at least access to customer consumption data , including prices and any related expenditure , the application of an easily understandable harmonised format for such data , adequate prepayment that reflects actual consumption and prompt access for all customers to such data under paragraph (h) of Annex A; (v) monitoring the implementation of rules relating to the roles and responsibilities of transmission system operators, distribution system operators, suppliers and customers and other market parties pursuant to Regulation (EC) 1228/2003; (w) monitoring investment in generation capacities in relation to security of supply; (x) exercising, where appropriate, a right of veto over decisions to appoint or dismiss persons responsible for the general management of a transmission system operator; (y) fixing or approving network access tariffs and publishing the methodology used to set such tariffs; (z) establishing or approving standards for quality of service, monitoring their implementation and imposing sanctions for non-compliance therewith; (aa) monitoring the implementation of safeguard measures referred to in Article 24; (ab) harmonising data exchange processes for the most important market processes at regional level; (ac) imposing price caps in uncompetitive markets for a defined, limited period in order to protect customers against market abuses, fixing such caps at a sufficiently high level so as not to discourage new market entrants or the growth of existing competitors; (ad) auditing the maintenance policies of transmission system operators; (ae) developing, in conjunction with relevant planning authorities, guidelines regarding a time limited licensing procedure in order to encourage new entrants to engage in electricity generation and trading; and (af) ensuring that wholesale fluctuations in prices are transparent. 2. If a Member State so provides, the monitoring duties referred to in paragraph 1 may be carried out by an authority other than the national regulatory authority. In such a case, the information resulting from such monitoring shall be made available to the national regulatory authority as soon as possible. In accordance with the principles of better regulation, the national regulatory authority shall, as appropriate, consult transmission system operators and closely cooperate with other relevant national authorities when carrying out the duties referred to in paragraph 1, while preserving their independence and without prejudice to their own specific competencies. 3. In addition to the tasks conferred upon it under paragraph 1, when an independent system operator has been designated under Article 10, the national regulatory authority shall: (a) monitor the compliance of the transmission system owner and the independent system operator with their obligations under this Article, and issue penalties for non-compliance in accordance with paragraph 5(d); (b) monitor the relations and communications between the independent system operator and the transmission system owner so as to ensure compliance of the independent system operator with its obligations, and, in particular, approve contracts and act as a dispute settlement authority between the independent system operator and the transmission system owner in respect of any complaint submitted by either party pursuant to paragraph 10; (c) without prejudice to the procedure under Article 10(2c), for the first 10-year network development plan, approve the investments planning and the multi-annual network development plan presented on an annual basis by the independent system operator; (d) ensure that network access tariffs collected by independent system operators include a remuneration for the network owner or network owners that provide for an adequate remuneration of the network assets and of any new investments therein; (e) have the powers to carry out inspections at the transmission system owner and independent system operator's premises; and (f) monitor the use of congestion rents collected by the independent system operator in accordance with Article 6(6) of Regulation (EC) No 1228/2003 ║. 4. When monitoring national electricity markets in accordance with paragraph 1(l), including the monitoring of wholesale and retail prices, national regulatory authorities shall adopt harmonised methodologies agreed and approved by the Agency. 5. Member States shall ensure that national regulatory authorities are granted the powers enabling them to carry out the duties referred to in paragraphs 1 and 2 in an efficient and expeditious manner. For this purpose, the national regulatory authority shall, inter alia, have ║ the ║ power to: (a) ║ issue binding decisions on electricity undertakings; (b) ║ carry out in cooperation with the national competition authority investigations of the functioning of electricity markets, and to decide on any appropriate measures necessary and proportionate to promote effective competition and ensure the proper functioning of the market ▐; (c) ║ obtain any information from electricity undertakings relevant for the fulfilment of its tasks , including the justification for any refusal to grant third-party access, and any information on measures necessary to reinforce the network, and to cooperate with financial market regulatory authorities where necessary ; (d) ║ impose effective, appropriate and dissuasive sanctions to electricity undertakings not complying with their obligations under this Directive or any decisions of the regulatory authority or of the Agency; (e) undertake appropriate ║ investigations with relevant powers to conduct dispute settlements under paragraphs 10 and 11; (f) ║ approve safeguards measures as referred to in Article 24. 6. The national regulatory authorities shall be responsible for establishing or approving prior to their entry into force the terms and conditions for: (a) connection and access to national networks, including transmission and distribution tariffs and their methodologies or, alternatively, the methodologies and their monitoring for setting or approving the transmission and distribution tariffs . Those tariffs shall reflect the actual costs incurred, insofar as such costs correspond to those of an efficient operator, and shall be transparent. They shall enable the necessary investments in the networks to be carried out in a manner allowing these investments to ensure the viability of the networks. The tariffs shall not discriminate against new market entrants ; (b) the provision of balancing services , which shall reflect real costs and be revenue-neutral as far as possible, whilst providing appropriate incentives for network users to balance their input and offtakes; they shall be fair and non-discriminatory and based on objective criteria; (c) access to cross-border infrastructures, including the procedures for the allocation of capacity and congestion management. The national regulatory authorities shall have power to require transmission system operators to modify those terms and conditions. 7. In fixing or approving the terms and conditions or methodologies of the tariffs, and the balancing services, the national regulatory authorities shall ensure that network operators are granted adequate incentive, over both the short and long term, to increase efficiencies, foster market integration , ensure security of supply, and support the related research activities. 8. The national regulatory authorities shall monitor congestion management within national electricity systems and interconnectors. Transmission system operators shall submit their congestion management procedures, including capacity allocation, to the national regulatory authorities for approval. National regulatory authorities may request amendments to those procedures before approving them. 9. National regulatory authorities shall have the authority to require transmission and distribution system operators, if necessary, to modify the terms and conditions ▐ referred to in this Article, to ensure that they are proportionate and applied in a non-discriminatory manner. In the event of delay in the establishment of transmission and distribution tariffs, national regulatory authorities shall have the power to set provisional transmission and distribution tariffs and to decide on the appropriate compensatory measures if the final tariffs deviate from those provisional tariffs. 10. Any party having a complaint against a transmission or distribution system operator in relation to that operator's obligations under this Directive may refer the complaint to the national regulatory authority which, acting as dispute settlement authority, shall issue a decision within two months after receipt of the complaint. That period may be extended by two months where additional information is sought by the national regulatory authority. The period may also be extended with the agreement of the complainant. The national regulatory authority's decision shall have binding effect unless and until overruled on appeal. 11. Any party who is affected and who has a right to complain concerning a decision on methodologies taken pursuant to this Article or, where the national regulatory authority has a duty to consult, concerning the proposed tariffs or methodologies, may, at the latest within two months, or a shorter time period as provided by Member States, following publication of the decision or proposal for a decision, submit a complaint for review. Such a complaint shall not have suspensive effect. 12. Member States shall create appropriate and efficient mechanisms for regulation, control and transparency so as to avoid any abuse of a dominant position, in particular to the detriment of consumers, and any predatory behaviour. Those mechanisms shall take account of the provisions of the Treaty, and in particular Article 82 thereof. 13. The national regulatory authority shall put in place an independent complaints service or alternative redress scheme, such as an independent energy ombudsman or a consumer body. That service or scheme shall be responsible for the efficient treatment of complaints and shall comply with best practice criteria. The national regulatory authority shall set standards and guidelines on how complaints will be handled by producers and network operators. 14. Member States shall ensure that the appropriate measures are taken, including administrative action or criminal proceedings in conformity with their national law, against the natural or legal persons responsible where confidentiality rules imposed by this Directive have not been respected. 15. Complaints referred to in paragraphs 10 and 11 shall be without prejudice to the exercise of rights of appeal under Community and national law. 16. Decisions taken by a national regulatory authority shall be fully reasoned and available to the public to allow for legal scrutiny . 17. Member States shall ensure that suitable mechanisms exist at national level under which a party affected by a decision of the national regulatory authority has a right of appeal to a national judicial body or other independent national authority independent of both the parties involved and any government . ▐ Article 22d Regulatory regime for cross border issues 1. National regulatory authorities shall closely cooperate and consult with each other, and shall provide each other and the Agency with any information necessary for the fulfilment of their tasks under this Directive. In respect of the information exchanged, the receiving authority shall ensure the same level of confidentiality as that required of the originating authority. 2. In order to ensure that, where regional electricity markets occur, their integration is mirrored by adequate regulatory structures, the relevant national regulatory authorities shall ensure, in close cooperation with and under the guidance of the Agency, that at least the following regulatory tasks are performed in relation to their regional markets: (a) cooperation at least at a regional level to foster the creation of operational arrangements in order to ensure an optimal management of the network, develop joint electricity exchanges and the allocation of cross-border capacity, and to ensure an adequate level of interconnection capacity including through new interconnection, within the region and between regions to allow for the development of effective competition and the improvement of security of supply; (b) harmonisation at least at the relevant regional level of all technical and market codes for the relevant transmission system operators and other market actors; (c) harmonisation of the rules governing the management of congestion and the fair redistribution of revenues and/or costs of congestion management among all market actors; (d) adoption of rules to ensure that the owners and/or managers of power exchange(s) which operate the relevant regional pool market are fully independent of the owners and/or managers of generation assets. 3. National regulatory authorities shall have the right to enter into agreements with each other to foster regulatory cooperation, and the actions referred to in paragraphs 1 and 2 shall be carried out, as appropriate, in close consultation with other relevant national authorities and without prejudice to their specific competencies. 4. The Agency shall decide upon the regulatory regime for infrastructure connecting at least two Member States: (a) upon a joint request from the competent national regulatory authorities, or, (b) where the competent national regulatory authorities have not been able to reach an agreement on the appropriate regulatory regime within six months from the date the file was brought before the last of these regulatory authorities. ▐ Article 22e Compliance with guidelines 1. The Commission or any national regulatory authority ║ may request the opinion of the Agency on the compliance of a decision taken by a regulatory authority with guidelines referred to in this Directive or in Regulation (EC) No 1228/2003. 2. The Agency shall provide its opinion to the Commission or the national regulatory authority which has requested it ║, respectively, and to the national regulatory authority which has taken the decision in question, within four months of the date of the request. 3. Where the national regulatory authority which has taken the disputed decision fails to comply with the Agency's opinion within four months from the date of its receipt, the Agency shall inform the Commission accordingly. 4. Any national regulatory authority may inform the Commission where it considers that a decision taken by a national regulatory authority does not comply with guidelines referred to in this Directive or in Regulation (EC) No 1228/2003 within two months from the date of that decision. 5. Where the Commission ║ finds that the decision of a national regulatory authority raises serious doubts as to its compatibility with guidelines referred to in this Directive or in Regulation (EC) No 1228/2003, either within two months of being informed of the failure to comply with the Agency's opinion in accordance with paragraph 3 or of the failure to comply with guidelines in accordance with paragraph 4, or, on its own initiative, within three months from the date of the disputed decision, the Commission may decide to initiate proceedings. In such a case, the Commission shall invite the national regulatory authority and the parties to the proceedings before the national regulatory authority to submit comments. 6. Where the Commission has decided to initiate proceedings, it shall, within no more than four months of the date of such decision, issue a final decision: (a) not to raise objections against the decision of the national regulatory authority; or (b) requiring the national regulatory authority concerned to amend or withdraw its decision if it considers that guidelines have not been complied with. 7. Where the Commission has not taken a decision to initiate proceedings or a final decision within the time-limits set in paragraphs 5 and 6 respectively, it shall be deemed not to have raised objections against the decision of the national regulatory authority. 8. The national regulatory authority shall comply with the Commission decision to amend or withdraw their decision within a period of two months and shall inform the Commission accordingly. ▐ Article 22f Record keeping 1. Member States shall require supply undertakings to keep at the disposal of the national regulatory authority, the national competition authority and the Commission, for at least five years, the relevant data relating to all transactions in electricity supply contracts and electricity derivatives with wholesale customers and transmission system operators. 2. The data shall include details on the characteristics of the relevant transactions such as duration, delivery and settlement rules, the quantity, the dates and times of execution and the transaction prices and means of identifying the wholesale customer concerned, as well as specified details of all unsettled electricity supply contracts and electricity derivatives. 3. The national regulatory authority shall report on the outcome of its investigations or its request to market participants whilst ensuring that commercially sensitive information on individual market players or individual transactions is not released. ▐ ▐ 4. ║ This Article shall not create additional obligations vis-à-vis the authorities mentioned in paragraph 1 for entities falling within the scope of Directive 2004/39/EC. 5. In the event that the authorities referred to in paragraph 1 need access to data kept by entities falling within the scope of Directive 2004/39/EC, the authorities responsible under that Directive shall provide those authorities ║ with the required data.’