COMMON POSITION (EC) No 56/96 adopted by the Council on 25 July 1996 with a view to adopting Directive 96/.../EC of the European Parliament and of the Council, of ..., concerning common rules for the internal market in electricity
Date: 1996-07-25
Institutions: Council of the European Union
Subjects: approximation of laws, electrical energy, electricity supply, energy production, energy transport, single market













EUR-Lex - 51996AG1024(05) - EN






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51996AG1024(05)

COMMON POSITION (EC) No 56/96 adopted by the Council on 25 July 1996 with a view to adopting Directive 96/.../EC of the European Parliament and of the Council, of ..., concerning common rules for the internal market in electricity  


Official Journal C 315 , 24/10/1996 P. 0018 





COMMON POSITION (EC) No  56/96 adopted by the Council on 25 July 1996 with a view to adopting Directive 96/. . ./EC of the  European Parliament and of the Council, of . . ., concerning common rules for the internal market  in electricity (96/C 315/05) 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 (1), Having regard to the opinion of the Economic and Social Committee (2), Acting in accordance with the procedure laid down in Article 189b of the Treaty (3), (1) Whereas it is important to adopt measures to ensure the smooth running of the internal market;  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; (2) Whereas the completion of a competitive electricity market is an important step towards  completion of the internal energy market; (3) Whereas the provisions of this Directive should not affect the full application of the Treaty,  in particular the provisions concerning the internal market and competition; (4) Whereas establishment 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 security of supply and the competitiveness of the European economy and respecting  environmental protection; (5) Whereas the internal market in electricity needs to be established gradually, in order to  enable the industry to adjust in a flexible and ordered manner to its new environment and to take  account of the different ways in which electricity systems are organized at present; (6) Whereas the establishment of the internal market in the electricity sector must favour the  interconnection and interoperability of systems; (7) Whereas Council Directive 90/547/EEC of 29 October 1990 on the transit of electricity through  transmission grids (4) and Council Directive 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  (5), provide for a first phase for the completion of the internal electricity market; (8) Whereas it is now necessary to take further measures with a view to establishing the internal  market in electricity; (9) Whereas, in the internal market, electricity undertakings must be able to operate, without  prejudice to compliance with public service obligations, with a view to achieving a competitive  market in electricity; (10) Whereas Member States, because of the structural differences in the Member States, currently  have different systems for regulating the electricity sector; (11) 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; (12) Whereas, whatever the nature of the prevailing market organization, access to the system must  be open in accordance with this Directive and must lead to equivalent economic results in the  Member States and hence to a directly comparable level of opening-up of markets and to a directly  comparable degree of access to electricity markets; (13) Whereas for some Member States the imposition of public service obligations may be necessary  to ensure security of supply and consumer and environmental protection, which, in their view, free  competition, left to itself, cannot necessarily guarantee; (14) Whereas long-term planning may be one means of carrying out those public service obligations; (15) Whereas the Treaty lays down specific rules with regard to restrictions on the free movement  of goods and on competition; (16) Whereas Article 90 (1) of the Treaty, in particular, obliges the Member States to respect  these rules with regard to public undertakings and undertakings which have been granted special or  exclusive rights; (17) Whereas Article 90 (2) of the Treaty subjects undertakings entrusted with the operation of  services of general economic interest to these rules, under specific conditions; (18) Whereas the implementation of this Directive will have an impact on the activities of such  undertakings; (19) Whereas the Member States, when imposing public service obligations on the enterprises of the  electricity sector, must therefore respect the relevant rules of the Treaty as interpreted by the  Court of Justice; (20) Whereas, in establishing the internal market in electricity, full account should be taken of  the Community objective of economic and social cohesion, particularly in sectors such as the  infrastructures, national or intra-Community, which are used for the transmission of electricity; (21) Whereas Decision No 1254/96/EC of the European Parliament and of the Council of 5 June 1996,  adopting a series of guidelines on trans-European energy networks (1) has contributed to the  development of integrated infrastructures for the transmission of electricity; (22) Whereas it is therefore necessary to establish common rules for the production of electricity  and the operation of electricity transmission and distribution systems; (23) Whereas there are two systems which may be applied for opening up the production market, an  authorization procedure or a tendering procedure, and these must operate in accordance with  objective, transparent and non-discriminatory criteria; (24) Whereas the position of autoproducers and independent producers needs to be taken into  consideration within this framework; (25) Whereas each transmission system must be subject to central management and control in order to  ensure the security, reliability and efficiency of the system in the interests of producers and  their customers; whereas a transmission system operator should therefore be designated and  entrusted with the operation, maintenance, and, if necessary, development of the system; whereas  the transmission system operator must behave in an objective, transparent and non-discriminatory  manner; (26) Whereas the technical rules for the operation of transmission systems and direct lines must be  transparent and must ensure interoperability; (27) Whereas objective and non-discriminatory criteria must be established for the dispatching of  power stations; (28) Whereas, for reasons of environmental protection, priority may be given to the production of  electricity from renewable sources; (29) Whereas, at the distribution level, customers located in a given area may be granted supply  rights and a manager must be designated to manage, maintain and, if necessary, develop each  distribution system; (30) Whereas, in order to ensure transparency and non-discrimination the transmission function of  vertically integrated undertakings should be operated independently from the other activities; (31) Whereas a single buyer must operate separately from the generation and distribution activities  of vertically integrated undertakings; whereas the flow of information between the single buyer  activities and these generation and distribution activities needs to be restricted; (32) Whereas the accounts of all integrated 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; (33) Whereas it is also necessary to provide for access by the competent authorities to the  internal accounts of undertakings with due regard for confidentiality; (34) Whereas, owing to the diversity of structures and the special characteristics of systems in  Member States, there should be different options for system access operating in accordance with  objective, transparent and non-discriminatory criteria; (35) Whereas provision should be made for authorizing the construction and use of direct lines; (36) Whereas provision must be made for safeguards and dispute settlement procedures; (37) Whereas any abuse of a dominant position or any predatory behaviour should be avoided; (38) Whereas, as some Member States are liable to experience special difficulties in adjusting  their systems, provision should be made for recourse to transitional regimes or derogations,  especially for the operation of small isolated systems; (39) Whereas this Directive constitutes a further phase of liberalization; whereas, once it has  been put into effect, some obstacles to trade in electricity between Member States will  nevertheless remain in place; whereas, therefore, proposals for improving the operation of the  internal market in electricity may be made in the light of experience; whereas the Commission  should therefore report to the Council and the European Parliament on the application of this  Directive, 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 organization and functioning of the electricity  sector, access to the market, the criteria and procedures applicable to calls for tender and the  granting of authorizations and the operations of systems. 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; 3. Autoproducer shall mean a legal or natural person generating electricity essentially for his own  use; 4. (a) Independent producer shall mean a producer who does not carry out electricity transmission  or distribution functions in the territory covered by the system where he is established; (b) in Member States in which vertically integrated undertakings do not exist and where a tendering  procedure is used, independent producers are those, corresponding to the definition of point (a),  who may not be exclusively subject to the economic precedence of the interconnected system; 5. Transmission shall mean the transport of electricity on the high-voltage interconnected system  with a view to its delivery to final customers or to distributors; 6. Distribution shall mean the transport of electricity on medium-voltage and low-voltage  distribution systems with a view to its delivery to customers; 7. Customers shall mean wholesale or final customers of electricity and distribution companies; 8. Wholesale customers shall mean any natural or legal persons, if the Member States recognize  their existence, who purchase or sell electricity and who do not carry out transmission, generation  or distribution functions inside or outside the system where they are established; 9. Final customer shall mean a customer buying electricity for his own use; 10. Interconnectors shall mean equipment used to link electricity systems; 11. Interconnected system shall mean a number of transmission and distribution systems linked  together by means of one or more interconnectors; 12. Direct line shall mean an electricity line complementary to the interconnected system; 13. Economic precedence shall mean the ranking of sources of electricity supply in accordance with  economic criteria; 14. Ancillary services shall mean all services necessary for the operation of a transmission or  distribution system; 15. System user shall mean any legal or natural person supplying to, or being supplied by, a  transmission or distribution system; 16. Supply shall mean the delivery and/or sale of electricity to customers; 17. Integrated electricity undertaking shall mean a vertically or horizontally integrated  undertaking; 18. Vertically integrated undertaking shall mean an undertaking performing two or more of the  functions of generation, transmission and distribution of electricity; 19. Horizontally integrated undertaking shall mean an undertaking performing at least one of the  functions of generation for sale, or transmission or distribution of electricity, and another  non-electricity activity; 20. Tendering procedure shall mean the procedure through which planned additional requirements and  replacement capacity are covered by supplies from new or existing generating capacity; 21. Long-term planning shall mean the planning of the need for investment in generation and  transmission capacity on a long-term basis, with a view to meeting the demand for electricity of  the system and securing supplies to customers; 22. Single buyer shall mean any legal person who, within the system where he is established, is  responsible for the unified management of the transmission system and/or for centralized  electricity purchasing and selling; 23. Small isolated system shall mean any system with consumption of less than 2 500 GWh in the year  1996, where less than 5 % of annual consumption is obtained through interconnection with other  systems. CHAPTER II General rules for the organization of the sector Article 3 1. Member States shall ensure, on the basis of their institutional organization and with due regard  for the principle of subsidiarity, that, without prejudice to paragraph 2, electricity undertakings  are operated in accordance with the principles of this Directive, with a view to achieving a  competitive market in electricity, and shall not discriminate between these undertakings as regards  either rights or obligations. The two approaches to system access referred to in Articles 17 and 18  must lead to equivalent economic results and hence to a directly comparable level of opening up of  markets and to a directly comparable degree of access to electricity markets. 2. Having full regard to the relevant provisions of the Treaty, in particular Article 90 Member  States may impose on undertakings operating in the electricity sector, in the general economic  interest, public service obligations which may relate to security, including security of supply,  regularity, quality and price of supplies and to environmental protection. Such obligations must be  clearly defined, transparent, non-discriminatory and verifiable; they, and any revision thereof,  shall be published and notified to the Commission by Member States without delay. As a means of  carrying out the abovementioned public service obligations, Member States which so wish may  introduce the implementation of long-term planning. 3. Member States may decide not to apply the provisions in Articles 5, 6, 17, 18 and 21 in so far  as the application of these provisions would obstruct the performance, in law or in fact, of the  obligations imposed on electricity utilities in the general economic interest and in so far as the  development of trade would not be affected to such an extent as would be contrary to the interest  of the Community. The interest of the Community includes, inter alia, the competition with regard  to eligible customers according to this Directive and Article 90 of the Treaty. CHAPTER III Generation Article 4 For the construction of new generating capacity, Member States may choose between an authorization  procedure and/or a tendering procedure. Authorization and tendering must be conducted in accordance  with objective, transparent and non-discriminatory criteria. Article 5 1. Where they opt for the authorization procedure, Member States shall lay down the criteria for  the grant of authorizations for the construction of generating capacity in their territory. These  criteria may relate to: (a) the safety and security of the electricity system, installations and associated equipment; (b) protection of the environment; (c) land use and siting; (d) use of public ground; (e) energy efficiency; (f) the nature of the primary sources; (g) characteristics particular to the applicant, such as technical, economic and financial  capabilities; (h) the provisions of Article 3. 2. The detailed criteria and procedures shall be made public. 3. Applicants shall be informed of the reasons, which must be objective and non-discriminatory, for  any refusal to grant an authorization; the reasons must be well founded and duly substantiated;  they shall be forwarded to the Commission for information. Appeal procedures must be made available  to the applicant. Article 6 1. Where they opt for the tendering procedure, Member States or any other competent body designated  by the Member State concerned shall draw up an inventory of new means of production, including  replacement capacity, on the basis of the regular estimate referred to in paragraph 2. The  inventory shall take account of the need for interconnection of systems. The requisite capacity  shall be allocated by means of a tendering procedure in accordance with the procedure laid down in  this Article. 2. The transmission system operator or any other competent authority designated by the Member State  concerned shall draw up and publish under State supervision, at least every two years, a regular  estimate of the generating and transmission capacity which is likely to be connected to the system,  of the need for interconnectors with other systems, of potential transmission capacity and of the  demand for electricity. The estimate shall cover a period defined by each Member State. 3. Details of the tendering procedure for means of production shall be published in the Official  Journal of the European Communities at least six months prior to the closing date for tenders. The tender specifications shall be made available to any interested undertaking established in the  territory of a Member State so that it has sufficient time in which to submit a tender. The tender specifications shall contain a detailed description of the contract specifications and  of the procedure to be followed by all tenderers and an exhaustive list of criteria governing the  selection of tenderers and the award of the contract. These specifications may also relate to the  fields referred to in Article 5 (1). 4. In invitations to tender for the requisite generating capacity, consideration must also be given  to electricity supply offers with long-term guarantees from existing generating units, provided  that additional requirements can be met in this way. 5. Member States shall designate an authority or a public body or a private body independent of  electricity generation, transmission and distribution activities responsible for the organization,  monitoring and control of the tendering procedure. This authority or body shall take all necessary  steps to ensure confidentiality of the information contained in the tenders. 6. However, it must be possible for autoproducers and independent producers to obtain  authorization, on the basis of objective, transparent and non-discriminatory criteria as laid down  in Articles 4 and 5, in Member States which have opted for the tendering procedure. CHAPTER IV Transmission system operation Article 7 1. Member States shall designate or shall require the undertakings which own transmission systems  to designate, for a period of time to be determined by Member States having regard to  considerations of efficiency and economic balance, a system operator, responsible for operating,  ensuring the maintenance of, and, if necessary, developing the transmission system in a given area  and its interconnectors with other systems, in order to guarantee security of supply. 2. Member States shall ensure that technical rules establishing the minimum technical design and  operational requirements for the connection to the system of generating installations, distribution  systems, directly connected consumers' equipment, interconnector circuits and direct lines are  developed and published. These requirements shall ensure the interoperability of systems and shall  be objective and non-discriminatory. They shall be notified to the Commission in accordance with  Article 8 of Council Directive 83/189/EEC of 28 March 1983 laying down a procedure for the  provision of information in the field of technical standards and regulations (1). 3. The system operator shall be responsible for managing energy flows on the system, taking into  account exchanges with other interconnected systems. To that end, the system operator shall be  responsible for ensuring a secure, reliable and efficient electricity system and, in that context,  for ensuring the availability of all necessary ancillary services. 4. 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, coordinated  development and interoperability of the interconnected system. 5. The system operator shall not discriminate between system users or classes of system users,  particularly in favour of its subsidiaries or shareholders. 6. Unless the transmission system is already independent from generation and distribution  activities, the system operator shall be independent, at least in management terms, from other  activities not relating to the transmission system. Article 8 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. Without prejudice to the supply of electricity on the basis of contractual obligations,  including those which derive from the tendering specifications, the dispatching of generating  installations and the use of interconnectors shall be determined on the basis of criteria which may  be approved by the Member State and which must be objective, published and applied in a  non-discriminatory manner which ensures the proper functioning of the internal market in  electricity. They shall take into account the economic precedence of electricity from available  generating installations or interconnector transfers and the technical constraints on the system. 3. A Member State may require the system operator, when dispatching generating installations, to  give priority to generating installations using renewable energy sources or waste or producing  combined heat and power. 4. A Member State may, for reasons of security of supply, direct that priority be given to the  dispatch of generating installations using indigenous primary energy fuel sources, to an extent not  exceeding in any calendar year 15 % of the overall primary energy necessary to produce the  electricity consumed in the Member State concerned. Article 9 The transmission system operator must preserve the confidentiality of commercially sensitive  information obtained in the course of carrying out its business. CHAPTER V Distribution system operation Article 10 1. Member States may impose on distribution companies an obligation to supply customers located in  a given area. The tariff for such supplies may be regulated, for instance to ensure equal treatment  of the customers concerned. 2. Member States shall designate or shall require undertakings which own or are responsible for  distribution systems to designate a system operator responsible for operating, ensuring the  maintenance and, if necessary, developing the distribution system in a given area and its  interconnectors with other systems. 3. Member States shall ensure that the system operator acts in accordance with Articles 11 and 12. Article 11 1. The distribution system operator shall maintain a secure, reliable and efficient electricity  distribution system in its area, with due regard for the environment. 2. In any event it must not discriminate between system users or classes of system users,  particularly in favour of its subsidiaries or shareholders. 3. A Member State may require the distribution system operator, when dispatching generating  installations, to give priority to generating installations using renewable energy sources or waste  or producing combined heat and power. Article 12 The distribution system operator must preserve the confidentiality of commercially sensitive  information obtained in the course of carrying out its business. CHAPTER VI Unbundling and transparency of accounts Article 13 Member States or any competent authority they designate as well as the dispute settlement  authorities referred to in Article 20 (3) shall have right of access to the accounts of generation,  transmission or distribution undertakings which they need to consult in carrying out their checks. Article 14 1. Member States shall take the necessary steps to ensure that the accounts of electricity  undertakings are kept in accordance with paragraphs 2 to 5. 2. Electricity undertakings, whatever their system of ownership or legal form, shall draw up,  submit to audit and publish their annual accounts in accordance with the rules of national law  concerning the annual accounts of limited liability companies adopted pursuant to the fourth  Council Directive, 78/660/EEC, of 25 July 1978 based on Article 54 (3) (g) of the Treaty on the  annual accounts of certain types of companies (1). Undertakings which are not legally obliged to  publish their annual accounts shall keep a copy of these at the disposal of the public in their  head office. 3. Integrated electricity undertakings shall, in their internal accounting, keep separate accounts  for their generation, transmission and distribution activities, and, where appropriate,  consolidated accounts for other non-electricity activities, as they would be required to do if the  activities in question were carried out by separate undertakings, with a view to avoiding  discrimination, cross-subsidization and distortion of competition. They shall have included a  balance sheet and a profit and loss account for each activity in notes to their accounts. 4. Undertakings shall specify in notes to the annual accounts the rules for the allocation of  assets and liabilities and expenditure and income which they follow in drawing up the separate  accounts referred to in paragraph 3. These rules may be amended only in exceptional cases. Such  amendments must be mentioned in the notes and must be duly substantiated. 5. The annual accounts shall indicate in notes any transaction of a certain size conducted with  affiliated undertakings, within the meaning of Article 41 of the seventh Council Directive,  83/349/EEC, of 13 June 1983 based on Article 54 (3) (g) of the Treaty on consolidated accounts (2),  or with associated undertakings, within the meaning of Article 33 (1) thereof, or, with  undertakings which belong to the same shareholders. Article 15 1. Member States which designate as a single buyer a vertically integrated electricity undertaking  or part of a vertically integrated electricity undertaking shall lay down provisions requiring the  single buyer to operate separately from the generation and distribution activities of the  integrated undertaking. 2. Member States shall ensure that there is no flow of information between the single buyer  activities of vertically integrated electricity undertakings and their generation and distribution  activities, except for the information necessary to conduct the single buyer responsibilities. CHAPTER VII Organization of access to the system Article 16 For the organization of access to the system Member States may choose between the procedures  referred to in Article 17 and/or in Article 18. Both sets of procedure shall operate in accordance  with objective, transparent and non-discriminatory criteria. Article 17 1. In the case of negotiated access to the system Member States shall take the necessary measures  for electricity producers and, where Member States authorize their existence, supply undertakings  and eligible customers 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 each other on the basis of  voluntary commercial agreements. 2. Where an eligible customer is connected to the distribution system, access to the system must be  the subject of negotiation with the relevant distribution system operator and, if necessary, with  the transmission system operator concerned. 3. To promote transparency and facilitate negotiations for access to the system, system operators  must publish an indicative range of prices for use of the transmission and distribution systems in  the first year following implementation of this Directive. As far as possible, the indicative  prices published for subsequent years should be based on the average price agreed in negotiations  in the previous 12-month period. 4. Member States may also opt for a regulated system of access procedure, giving eligible customers  a right of access, on the basis of published tariffs for use of transmission and distribution  systems, that is at least equivalent, in terms of access to the system, to the other procedures for  access referred to in this Chapter. 5. The operator of the transmission or distribution system concerned may refuse access where he  lacks the necessary capacity. Duly substantiated reasons must be given for such refusal, in  particular having regard to Article 3. Article 18 1. In the case of the single buyer procedure, Member States shall designate a legal person to be  the single buyer within the territory covered by the system operator. Member States shall take the  necessary measures for: (i) the publication of a non-discriminatory tariff for the use of the transmission and distribution  system; (ii) eligible customers to be free to conclude supply contracts to cover their own needs with  producers and, where Member States authorize their existence, with supply undertakings outside the  territory covered by the system; (iii) eligible customers to be free to conclude supply contracts to cover their own needs with  producers inside the territory covered by the system; (iv) independent producers to negotiate access to the system with the transmission and distribution  systems operators so as to conclude supply contracts with eligible customers outside the system, on  the basis of a voluntary commercial agreement. 2. The single buyer may be obliged to purchase the electricity contracted by an eligible customer  from a producer inside or outside the territory covered by the system at a price which is equal to  the sale price offered by the single buyer to eligible customers minus the price of the published  tariff referred to in paragraph 1 (i). 3. If the purchase obligation under paragraph 2 is not imposed on the single buyer, Member States  shall take the necessary measures to ensure that the supply contracts referred to in paragraph 1  (ii) and 1 (iii) are either implemented via access to the system on the basis of the published  tariff referred to in paragraph 1 (i) or via negotiated access to the system according to the  conditions of Article 17. In the latter case there would be no obligation for the single buyer to  publish a non-discriminatory tariff for the use of the transmission and distribution system. 4. The single buyer may refuse access to the system and may refuse to purchase electricity from  eligible customers where he lacks the necessary transmission or distribution capacity. Duly  substantiated reasons must be given for such refusal, in particular having regard to Article 3. Article 19 1. Member States shall take the necessary measures to ensure an opening of their electricity  markets, so that contracts under the conditions stated in Article 17 and 18 can be concluded at  least up to a significant level, to be notified to the Commission on an annual basis. The share of the national market shall be calculated on the basis of the Community share of  electricity consumed by final consumers consuming more than 40 GWh per year (on a consumption site  basis and including autoproduction). The average Community share shall be calculated by the Commission on the basis of information  regularly provided by Member States to the Commission. The Commission shall publish this average  Community share defining the degree of market opening in the Official Journal of the European  Communities before 1 November each year will all appropriate information clarifying the  calculation. 2. The share of the national market, as referred to in paragraph 1, will be progressively increased  over a period of six years. This increase will be calculated by reducing the Community consumption  threshold of 40 GWh, as mentioned in paragraph 1, from 40 GWh to a level of 20 GWh annual  electricity consumption three years after the entry into force of this Directive and to a level of  9 GWh annual electricity consumption six years after the entry into force of this Directive. 3. Member States shall specify those customers inside their territory representing the shares as  specified under paragraphs 1 and 2 which have the legal capacity to contract electricity in  accordance with Articles 17 and 18, given that all final consumers consuming more than 100 GWh per  year (on a consumption site basis and including autoproduction) must be included in the above  category. Distribution companies, if not already specified as eligible customers under this paragraph, will  have the legal capacity to contract under the conditions of Articles 17 and 18 for the volume of  electricity being consumed by their customers designated as eligible within their distribution  system, to supply those customers. 4. Member States shall publish by 30 January each year the criteria for the definition of eligible  customers, which are able to conclude contracts under the conditions stated in Articles 17 and 18.  This information, together with all other appropriate information to justify the fulfilment of  market opening under paragraph 1, will be sent to the Commission to be published in the Official  Journal of the European Communities. The Commission may request a Member State to modify its  specifications, as mentioned in paragraph 3, if they create obstacles to the correct application of  this Directive as regards the good functioning of the internal electricity market. If the Member  State concerned does not follow this request within a period of three months, a final decision will  be taken in accordance with procedure I of Article 2 of Council Decision 87/373/EEC of 13 July 1987  laying down the procedures for the exercise of implementing powers conferred on the Commission  (1). 5. To avoid imbalance in the opening of electricity markets during the period referred to in  Article 26: (a) contracts for the supply of electricity under the provisions of Articles 17 and 18 with an  eligible customer in the system of another Member State shall not be prohibited if the customer is  considered as eligible in both systems involved; (b) in cases where transactions as described in subparagraph (a) are refused because of the  customer being eligible only in one of the two systems, the Commission may oblige, taking into  account the situation in the market and the common interest, the refusing party to execute the  requested electricity supply at the request of the Member State where the eligible customer is  located. In parallel with the procedure and the timetable provided for in Article 26, and not later than  after half of the period provided for in the same Article, the Commission will review the  application of subparagraph (b) of the first subparagraph on the basis of market developments  taking into account the common interest. In the light of experience gained, the Commission will  evaluate this situation and report on possible imbalance in the opening of electricity markets with  regard to this paragraph. Article 20 1. Member States shall take the necessary measures to enable: (i) independent producers and autoproducers to negotiate access to the system so as to supply their  own premises and subsidiaries in the same Member State or in another Member State by means of the  interconnected system; (ii) producers located outside the territory covered by the system to conclude a supply contract  following a call for tender for new generating capacity, and to have access to the system to  perform the contract. 2. 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 negotiations. 3. 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. In particular, this  authority must settle disputes concerning contracts, negotiations and refusal of access or refusal  to purchase. 4. In the event of cross-border disputes, the dispute settlement authority shall be the dispute  settlement authority covering the system of the single buyer or the system operator which refuses  use of, or access to, the system. 5. Recourse to this authority shall be without prejudice to the exercise of rights of appeal under  Community law. Article 21 1. Member States shall take measures under the procedures and rights referred to in Article 17 and  18 to enable: - all electricity producers and electricity supply undertakings, where Member States authorize  their existence, established within their territory to supply their own premises, subsidiaries and  eligible customers through a direct line, - any eligible customer within their territory to be supplied through a direct line by a producer  and supply undertakings, where such suppliers are authorized by Member States. 2. Member States shall lay down the criteria for the grant of authorizations for the construction  of direct lines in their territory. These criteria must be objective and non-discriminatory. 3. The supply possibilities through a direct line as referred to in paragraph 1 do not modify the  possibilities to contract electricity in accordance with Articles 17 and 18. 4. Member States may make authorization to construct a direct line subject either to the refusal of  system access on the basis, as appropriate, of Article 17 (5) or Article 18 (4) or to the opening  of a dispute settlement procedure under Article 20. 5. Member States may refuse to authorize a direct line if the granting of such an authorization  would obstruct the provisions of Article 3. Duly substantiated reasons must be given for such  refusal. Article 22 Member States shall create appropriate and efficient mechanisms for regulation, control and  transparency so as to avoid any abuse of dominant position, in particular to the detriment of  consumers, and any predatory behaviour. These mechanisms shall take account of the provisions of  the Treaty, and in particular Article 86 thereof. CHAPTER VIII 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  temporarily take the necessary safeguard 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 must amend or abolish such  measures, in so far as they distort competition and adversely affect trade in a manner which is at  variance with the common interest. Article 24 1. Those Member States in which commitments or guarantees of operation given before the entry into  force of this Directive may not be honoured on account of the provisions of this Directive may  apply for a transitional regime which may be granted to them by the Commission, taking into  account, among other things, the size of the system concerned, the level of interconnection of the  system and the structure of its electricity industry. The Commission shall inform the Member States  of those applications before it takes a decision, taking into account the respect of  confidentiality. This decision shall be published in the Official Journal of the European  Communities. 2. The transitional regime shall be of limited duration and shall be linked to expiry of the  commitments or guarantees referred to in paragraph 1. The transitional regime may cover derogations  from Chapters IV, VI and VII of this Directive. Applications for a transitional regime must be  notified to the Commission no later than one year after the entry into force of this Directive. 3. Member States which can demonstrate, after the Directive has been brought into force, that there  are substantial problems for the operation of their small isolated systems, may apply for  derogations from the relevant provisions of Chapters IV, V, VI, VII, which may be granted to them  by the Commission. The latter shall inform the Member States of those applications prior to taking  a decision, taking into account the respect of confidentiality. This decision shall be published in  the Official Journal of the European Communities. This paragraph shall also be applicable to  Luxembourg. Article 25 1. The Commission shall submit a report to the Council and the European Parliament, before the end  of the first year following entry into force of this Directive, on harmonization requirements which  are not linked to the provisions of this Directive. If necessary, the Commission shall attach to  the report any harmonization proposals necessary for the effective operation of the internal  electricity market. 2. The Council and the European Parliament shall give their views on such proposals within two  years of their submission. Article 26 The Commission shall review the application of this Directive and submit a report on the experience  gained on the functioning of the internal electricity market and the implementation of the general  rules mentioned in Article 3 in order to allow the European Parliament and the Council, in the  light of experience gained, to consider, in due time, the possibility of a further opening of the  market which would be effective nine years after the entry into force of the Directive taking into  account the coexistence of systems referred to in Articles 17 and 18. Article 27 1. Member States shall bring into force the laws, regulations and administrative provisions  necessary to comply with this Directive not later than . . . (1). They shall forthwith inform the  Commission thereof. 2. Belgium, Greece and Ireland may, due to the technical specificities of their electricity  systems, dispose of an additional period of respectively one year, two years and one year to apply  the obligations ensuing from this Directive. These Member States, when making use of this option,  shall inform the Commission thereof. 3. When Member States adopt these provisions, they 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 28 This Directive shall enter into force on the 20th day following that of its publication in the  Official Journal of the European Communities. Article 29This Directive is addressed to the Member States. Done at . . . For the European Parliament The President For the Council The President (1) OJ No C 65, 14. 3. 1992, p. 4. (2) OJ No C 73, 15. 3. 1993, p. 31. (3) Opinion of the European Parliament of 17 November 1993 (OJ No C 329, 6. 12. 1993, p. 150),  Council common position of 25 July 1996 (not yet published in the Official Journal) and Decision of  the European Parliament of . . . (not yet published in the Official Journal). (4) OJ No L 313, 13. 11. 1990, p. 30. Directive as last amended by Commission Decision 95/162/EC  (OJ No L 107, 12. 5. 1995, p. 53). (5) OJ No L 185, 17. 7. 1990, p. 16. Directive as last amended by Commission Directive 93/87/EEC  (OJ No L 277, 10. 11. 1993, p. 32). (1) OJ No L 161, 29. 6. 1996, p. 147. (1) OJ No L 109, 26. 4. 1983, p. 8. Directive as last amended by the 1994 Act of Accession. (1) OJ No L 222, 14. 8. 1978, p. 11. Directive as last amended by the 1994 Act of Accession. (2) OJ No L 193, 18. 7. 1983, p. 1. Directive as last amended by the 1994 Act of Accession. (1) OJ No L 197, 18. 7. 1987, p. 33. (1) Two years after the date of entry into force of this Directive. STATEMENT OF THE COUNCIL'S REASONS I. INTRODUCTION 1. On 24 February 1992 the  Commission forwarded to the Council a proposal concerning common rules for the internal market in  electricity based on Article 100a of the EC Treaty. 2. The opinions of the Economic and Social Committee and the European Parliament were delivered on  27 January and 17 November 1993, respectively. 3. On 11 February 1994 the Commission forwarded an amended proposal to the Council and the European  Parliament. 4. At its meeting on 25 July 1996, the Council adopted its common position pursuant to Article 189b  of the Treaty. II. OBJECTIVES 5. The purpose of the proposal for a Directive is to take a further step towards  the completion of the internal market in electricity by establishing common rules for the  production, transmission and distribution of electricity. It lays down the rules relating to the  organization and functioning of the electricity sector, access to the market, the criteria and  procedures applicable to calls for tender and the granting of authorizations and the operation of  systems. III. ANALYSIS OF THE COMMON POSITION 6. The Council reached an agreement on the text of the  common position on the basis of the following general outline: (a) it has been agreed to pursue a Directive for the internal market in electricity separated from  the internal market in gas; (b) the internal market in electricity shall initially be subject to a gradual market opening over  nine years; (c) Member States may invoke either a tendering procedure or an authorization procedure when  granting licences to construct new generation capacity; (d) Member States may invoke either the 'negotiated third party access` or the 'single buyer`  systems to grant access to the grids; (e) all issues related to public service obligations have been referred to Article 3; (f) with due regard to the principle of subsidiarity, Member States have been given a larger role  in the implementation provisions. 7. The Council has been able to adopt a large part of the amendments requested by the European  Parliament. (a) The Council has, verbatim or in substance, adopted amendments 3, 7, 11, 13, 14, 15, 16, 22, 24,  25, 28, 33, 34, 40, 41, 48, 51, 60, 62, 63, 64, 66, 76, 77, 79, 83, 85, 88, 89, 91, 92, 97, 236,  237 and 238 which were taken up by the Commission. (b) The Council has, furthermore, been able to adopt verbatim or in substance, amendments 9, 10,  17, 20, 26, 45, 46, 55, 65, 68, 80, 81, 86, 96, 101, 222 and 231 which were not taken up by the  Commission. (c) The Council has not been able to adopt amendments 35, 43, 58, 61, 69, 71, 75, 78, 87, 90, 107  and 108 which were taken up by the Commission. (d) The Council has finally followed the Commission's amended proposal by not adopting the other  amendments proposed by the European Parliament.