WRITTEN QUESTION E-0710/00

by Hiltrud Breyer (Verts/ALE) to the Commission

(17 March 2000)

Subject: Implementation of the electricity directive

1. Has sufficient unbundling taken place in the electricity industry particularly with regard to the separation of transmission and distribution networks for the production and sale of electricity to ensure fair competition, on a footing of equality, in the industry?

2. Has attention been paid to making it possible to keep transaction costs as low as possible, in the interests of small suppliers?

3. How are levels of transit charges monitored on the basis of unbundling?

4. (a) Have any comparisons yet been made between EU Member States, for example of the cost of transit of 1 Kilowatt-hour over 150 km?

(b) If not, why not? How else can the fairness of competition be monitored if there are no comparative data?

5. Is there an explanation for the differences in transit charges?

6. If there is no monitoring in this field, how is the electricity directive implemented?

Answer given by Mrs de Palacio on behalf of the Commission

(3 May 2000)

1. Unbundling in the electricity industry is key to ensuring fair competition, as the Honourable Member rightly points out. According to Directive 96/92/EC of the Parliament and of the Council of 19 December 1996 concerning common rules for the internal market in electricity(1), the Member States are obliged to unbundle the operation of the transmission system operator (TSO) in the accounts and in management terms. There is no obligation on the Member States to legally unbundle transmission system operation or to require separate ownership of the natural monopoly activities from generation and supply. The distribution activities are subject to obligations relating to non dissemination of

commercially sensitive information to other parts of the electricity company. Most Member States have decided to go further than the obligations of the Directive, in the sense that they have either legally unbundled the TSO, or even unbundled ownership of the TSO. The Commission has asked Member States that have unbundled only the management of the TSO to provide information as to the practical implementation of this requirement. The Commission is assessing the answers and will take the appropriate action if it feels that the management unbundling has not been sufficiently ensured.

2. It is the task of the regulatory authorities to regulate transmission prices, and it is the objective of all independent regulators to keep transmission prices as low as possible.

3. The transmission tariffs have recently been set in the Member States due to the implementation of the Electricity Directive. The transmission tariffs are monitored by regulatory authorities in Member States. The Commission is of the opinion that a comparison of transmission tariffs in the Member States is important for transparency of the electricity market. Non-discriminatory and fair access to the network is fundamental for arriving at a competitive electricity market. For this reason it will launch a comparative study on the transmission tariffs in the Member Sates this year.

4. As the transmission tariffs have only recently been developed and are still under development in the Member States that had an additional period to implement the Directive, these data have not yet been collected for the Community.

5. The Commission through its contacts with the market players is however aware of the fact that quite substantial differences exist in transmission tariffs throughout the Community. The reasons for these differences will be one of the elements of the study that the Commission intends to launch this year. However, it can already be stated that these levels will differ due to differences in size of networks, in consumer base over which to allocate the costs due to productivity and efficiency levels, and due to different levels of investments, also for investment in interconnection capacity to facilitate trade in the internal market.

6. Monitoring of the different levels of transmission tariffs is an important element in ensuring that the internal electricity market functions on a non-discriminatory basis. The Commission regards it very much as its task to ensure that transmission tariffs guarantee equal access to the transmission grid.

(1) OJ L 27, 30.1.1997.