1999/792/EC: Commission Decision of 8 July 1999 concerning the application of France for a transitional regime under Article 24 of Directive 96/92/EC of the European Parliament and of the Council concerning common rules for the internal market in electricity (notified under document number C(1999) 1551/2) (Only the French text is authentic)
Date: 1999-07-08
Institutions: European Commission
Subjects: France, approximation of laws, electrical energy, single market, transitional period (EU)

L 319/6

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Official Journal of the European Communities

11.12.1999

COMMISSION DECISION

of 8 July 1999

concerning the application of France for a transitional regime under Article 24 of Directive
96/92/EC of the European Parliament and of the Council concerning common rules for the
internal market in electricity

(notified under document number C(1999) 1551/2)

(Only the French text is authentic)

(1999/792/EC)

THE COMMISSION OF THE EUROPEAN COMMUNITIES,

electricity, including imports and exports, is carried out
by EDF.

Having regard to the Treaty establishing the European
Community,

Having regard to Directive 96/92/EC of
Parliament and of
concerning
electricity (1), and in particular Article 24 thereof,

the European
the Council of 19 December 1996
in

internal market

common rules

the

for

the application
Having informed the Member States of
submitted by France pursuant to Article 24(1) of Directive
96/92/EC,

3. Liberalisation of the electricity market:
transposition of Directive 96/92/EC

(4) The new bill governing the electricity sector entitled
(cid:145)Modernisation et dØveloppement du service public(cid:146)
(Modernisation and development of the public service)
was given its first reading in Parliament
in February
1999. The bill is expected to be voted on in September
1999.

Whereas:

(5) The main focuses of the bill are as follows:

I. FACTS

1. Procedure

(cid:151) eligible customers: customers consuming more than
100 GWh per year will be eligible. This must
represent the minimum required by the Directive,
which is 26,48 %. Distributors will be eligible only
for their eligible customers,

(1) By letter of 19 February 1998 to the Commission, the
French authorities applied to be covered by a transitional
regime pursuant to Article 24 of Directive 96/92/EC.

(cid:151) new production installations: France has opted for the
authorisation procedure as part of a multiannual
investment programme, with a subsidiary invitation
to tender,

(2) Additional
concerning
application was
Commission on 4 November 1998.

information from the French authorities
the
this

received by

(cid:151) access to the network by third parties will be governed

on the basis of published transmission rates,

2. Structure of the electricity sector in France

(3) The electricity sector in France is characterised by the
monopoly of (cid:201)lectricitØ de France (EDF) in the production,
transmission and distribution of electricity. EDF is
responsible for more than 90 % of the production and
distribution of electricity in France. All transmission of

(1) OJ L 27, 30.1.1997, p. 20.

(cid:151) EDF will remain a vertically integrated company. In
order to comply with the Directive, its accounts for
transmission, distribution and other
production,
the
activities will
transmission
to be
independent in terms of the management of other
activities not related to the transmission network,

network manager will have

In addition,

separated.

be

electricity

commission will be
(cid:151) an independent
responsible
Its
regulating
for
decision-making powers will be mainly limited to
settling disputes.

the market.

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4. The transitional regime notified by the French

authorities

(11) Remuneration conditions worsened considerably from
the
the small power stations continued to

they were still enough to ensure that

1993, but
operators of
invest.

4.1. Introduction

(6) The French authorities have notified the following
transitional measures in application of Article 24 of
Directive 96/92/EC:

(12)

(cid:151) contracts for purchasing the electricity produced by

the (cid:145)peak(cid:146) independent producers,

(cid:151) commitments linked to the SuperphØnix fast breeder

reactor,

(cid:151) commitments linked to the financing of the special
pension scheme for the employees of the electricity
and gas industries.

(7) The transitional measure concerning the commitments
linked to the financing of the special pension scheme for
the employees of the electricity and gas industries was
added to the notification by the letter of 4 November.

(8) This measure was not included in the initial notification
of 19 February. The French authorities had, however,
drawn attention to the problem of pensions in this
notification, but did not include it because, in their view,
Directive 96/92/EC did not
social matters.
Following the discussions on this aspect between the
French
Commission and the Member
authorities added this measure in the letter of 4
November.

States,

cover

the

In April 1997, a service contract between EDF and the
French State provided for more substantial reductions in
rates. New contracts known as (cid:145)dispatchable(cid:146) contracts
were concluded with the small (cid:145)peak(cid:146) installations for a
duration of 15 years, minus the period that had elapsed
since the installations had been commissioned. The
installations will be called solely on the basis of
the
needs of
remuneration
electricity system. The
comprises a fixed payment and remuneration for the
energy supplied. An offer was made to any producers
who did not wish to continue under these conditions to
buy back their
the
expenditure minus the income already received.

installations on the basis of

the

(13) The French authorities point out that EDF will no longer
be able to bear the cost resulting from these contracts by
means of its exclusive rights in the electricity sector.

(b) A m o u n t o f s t r a n d e d c o s t s

(14) The commitments resulting from (cid:145)dispatchable(cid:146) contracts
concluded between EDF and the independent producers
concern installed power of 516 MW.

(15) The French authorities estimate that the commitment,
limited to the foreseeable amounts to be paid in respect
of the fixed payment under the contract, will be of the
order of FRF 250 million (1997 value) per annum until
the last contract expires in 2012.

4.2. Details of the measures notified

4.2.1. Contracts for the purchase of the electricity produced by

the (cid:145)peak(cid:146) independent producers

(c) R e c o v e r y m e t h o d

(a) N a t u r e o f t h e c o m m i t m e n t s

(16)

(9)

EDF was under an obligation to buy the electricity
produced during the peak-rate period by the small
independent power stations (cid:151) up to 8 MVA. This
obligation stemmed from Decree No 55-662 of 1955,
amended in 1994.

all

users:

payable

EDF’s costs would be financed by a fund supplied by a
contribution
suppliers,
by
autoproducers and final customers who import or
purchase
The
contribution would be based on the number of kWh
supplied, purchased or produced. It would be divided up
proportionally
eligible
the
customers and the suppliers and non-eligible customers.

electricity within

the Community.

suppliers

between

of

(10) The authorities removed the purchase obligation for new
installations from January 1995. Any installation that
had obtained the necessary authorisations before this
date benefits from the favourable purchase conditions
mentioned above.

(17) No precise decision or method of calculation has been
adopted so far. The French authorities presented the set
of measures on a preliminary basis and subject to its
examination by the French Parliament.

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11.12.1999

4.2.2. Commitments linked to the SuperphØnix power plant

(25) The authorities presented the set of measures on a
to examination by the

preliminary basis and subject
French Parliament.

(a) N a t u r e o f t h e c o m m i t m e n t s

(18) Construction of

the SuperphØnix fast breeder reactor
began in 1976. Initial criticality took place in 1985. In
1994, the plant was transformed into a research facility.

4.2.3. Commitments linked to the financing of the special

pension scheme

(19) On 28 February 1997, the reactor was shut down. On 2
the French Government decided that

February 1998,
SuperphØnix would be permanently abandoned.

(a) N a t u r e o f t h e c o m m i t m e n t s

(20) The NERSA company (51 % EDF, 33 % ENEL and 16 %
SBK) was set up to build and run the power plant. SBK
and ENEL ceased to be part of NERSA from 1 January
1998. EDF is responsible for all the expenditure involved
in shutdown and decommissioning.

(b) A m o u n t o f s t r a n d e d c o s t s

(21) The future expenditure to be met by EDF is estimated at
around FRF 12,7 billion (1997 value) at the end of the
1998 financial year. This expenditure includes EDF’s
share for winding up NERSA, the resulting loss of equity
and the back-end of the fuel cycle, and all expenditure
for shutdown, post-operation and decommissioning of
the power station.

(26) The national

rules governing the employees of

the
electricity and gas industries establish a special pension
scheme. The employers have made no reserve for these
future commitments in the accounts.

(b) A m o u n t o f s t r a n d e d c o s t s

(27) The preservation of

the staff

rules will

involve an
additional cost, which will
increase substantially from
the year 2000. The French authorities point out that
prior
to liberalisation this additional cost could be
covered by the exclusive rights of the employers on the
electricity market. The authorities provide no calculation
or estimate of
this additional cost. They provide no
information in the notification on future pensions or on
any change in these staff rules in the new Electricity Act.

(22)

(23)

In the calculation, a loan granted by the Commissariat (cid:224)
l’(cid:201)nergie atomique (Atomic Energy Commission) of FRF
2,1 billion has been deducted, on the assumption that
reimbursement would not be necessary, as it was only
payable
availability of
SuperphØnix.

event of

sufficient

in the

(c) R e c o v e r y m e t h o d

by

all users:

EDF’s costs would be financed from a fund made up of a
contribution payable
suppliers,
autoproducers and final customers who import or
purchase
The
contribution would be based on the number of kWh
supplied, purchased or produced. It would be divided up
proportionally
eligible
the
customers and the suppliers of non-eligible customers.

electricity within

the Community.

suppliers

between

the

of

(24) Owing to the fact that some of the payment dates are a
long way off, and given possible developments
in
the
security and the
environment, the estimates of future expenditure and the
calculation of charges may be revised.

technology,

areas of

safety,

(c) R e c o v e r y m e t h o d

(28) The method of recovery of this future expenditure is not

indicated in the notification.

II. LEGAL ANALYSIS

1. Legal basis: Article 24(1) and (2) of Directive

96/92/EC

(29) The

applied to be

French authorities

granted a
transitional regime with respect to alleged commitments
and/or guarantees of operation pursuant to Article 24 of
Directive 96/92/EC. However, no explicit derogation
from the provisions of Chapters IV, VI or VII was
requested.

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2. Requirements of Article 24(1) and (2) of Directive

96/92/EC

(30) Under the terms of Article 24 of Directive 96/92/EC:

(cid:145)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, amongst other things,
the
level of
interconnection of the system and the structure of its
inform the
electricity industry. The Commission shall
Member States of those applications before it takes a
decision, taking into account respect for confidentiality.
This Decision shall be published in the Official Journal of
the European Communities.

system concerned,

size of

the

the

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.(cid:146)

(31) Article 24(1) and (2) of Directive 96/92/EC (hereinafter
the EC
referred to as (cid:145)the Directive(cid:146)),
Treaty,
to be
examined by the Commission when considering any
application for a transitional regime.

in the light of
require the following elements

thus

A. Requirements concerning the nature of the commitments

or guarantees of operation in question

(1) The existence of a commitment or guarantee of

operation must be proven.

(2) The commitment or guarantee of operation
must have been given before 20 February 1997.

(3) A causal

link between the entry into force of
the Directive and the inability to honour the
commitment must be established.

B. Requirements concerning the measures proposed to achieve

the objectives in question

(1) The measures of the transitional regime must
fall within the scope of derogations
from
Chapters IV, VI and VII of the Directive.

(2) The transitional

regime must be of

limited
duration and linked to the expiry of
the
commitments or guarantees of operation in
question.

(3) The transitional regime must apply the least
reasonably necessary to
restrictive measures
achieve the objectives, which themselves must
be legitimate. In deciding on these issues, the
Commission must take into account, amongst
other things, the size of the system concerned,
the level of interconnection of the system and
the structure of its electricity industry.

3. Assessment of the French transitional regime

3.1.

(cid:145)Peak(cid:146) producers

(32)

In the present case of the transitional regime introduced
by France concerning the commitments linked to the
contracts for the purchase of the electricity produced by
the (cid:145)peak(cid:146) independent producers and those linked to the
permanent shutdown of the SuperphØnix power plant, it
is not necessary to determine whether the requirements
A(1), (2), (3) or B(2), (3) have been met.

(33) This is because, as stated above, a transitional regime
within the meaning of Article 24 of the Directive must
provide for a derogation from the requirements laid
down in Chapters IV, VI and VII thereof.

(34) The measures under consideration are based on a
scheme of compensation or of
levies and charges
implemented by a Member State in order to offset
stranded costs caused by the application of the Directive.

(35) The application of

such levies does not

require a
the
derogation from the abovementioned chapters of
Directive
a
transitional regime within the meaning of Article 24 of
the Directive.

therefore be

regarded as

and cannot

(36) The measures in question do not come under the scope
of the derogations from Chapters IV, VI and VII of the
Directive and thus do not meet requirement B(1) above.

(37) The fact that measures such as those under consideration
in this case can result in very considerable distortions of
the internal market
this
conclusion.

in electricity does not affect

(38) The Commission recognises that the payment of such
levies can lead to economic consequences substantially
similar
to those resulting from a total or partial
derogation from some of the obligations contained in
Chapters IV, VI and VII of the Directive. However, such
distortions, by their very nature, do not result from such
a specific derogation as envisaged by the Directive.

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(39) The transfer of a compensation payment

to certain
electricity producers, financed through a levy or charge
on the consumers is, therefore, a measure which is not
directly addressed by the directive but one which needs
to be examined pursuant to the rules on competition,
and in particular Article 87(3)(c) of the EC Treaty. Under
these circumstances,
it is understood that measures of
similar economic effect will be treated in a consistent
manner, regardless of
the relevant procedure in each
individual case.

(40)

In the light of the non-applicability of Article 24 of the
Directive, it is not necessary to assess requirements A(1),
(2), (3) and B(2) and (3).

3.2. SuperphØnix

(41)

the transitional regime introduced by
In the case of
France concerning the commitments
linked to the
permanent shutdown of the SuperphØnix power plant, it
is not necessary to determine whether
requirements
A(1), (2), (3) or B(2), (3) have been met.

(48) The transfer of a compensation payment

to certain
electricity producers, financed through a levy or charge
on consumers,
is therefore a measure which is not
directly addressed by the Directive but on which needs
to be examined pursuant to the relevant rules of the
Treaties.

(49)

In the light of the non-applicability of Article 24 of the
Directive, it is not necessary to assess requirements A(1),
(2), (3) and B(2) and (3).

3.3. Commitments linked to the special pension

scheme

(50) The Commission takes the view that the information
supplied by the French authorities concerning potential
action to alleviate the difficulties of the special pension
scheme for the employees of
the electricity and gas
sufficiently detailed to allow the
is not
industries
commission to take a decision in accordance with
Article 24(1) of Directive 96/92/EC,

(42) This is because, as stated above, a transitional regime
within the meaning of Article 24 must provide for a
derogation from the requirements laid down by the
Directive in its Chapters IV, VI and VII.

HAS DECIDED AS FOLLOWS:

(43) The measures under consideration are based on a
compensation scheme or on charges
and levies,
implemented by a Member State in order to offset
stranded costs caused by the application of the Directive.

(44) The application of

such levies does not

require a
the
derogation from the abovementioned chapters of
Directive
a
transitional regime within the meaning of Article 24 of
the Directive.

therefore be

regarded as

and cannot

Article 1

This Decision concerns France’s application for a transitional
regime pursuant to Article 24 of Directive 96/92/EC, notified
to the Commission on 19 February 1998 and supplemented
on 4 November 1998. This notification concerns:

(a) contracts for the purchase by (cid:201)lectricitØ de France (EDF) of
independent

electricity produced by

(cid:145)peak(cid:146)

the

the
producers;

(45) The measures in question do not come under the scope
of the derogations from Chapters IV, VI and VII of the
Directive and thus do not meet requirement B(1).

(b) EDF’s commitments linked to the SuperphØnix fast breeder

reactor;

(46) The fact that measures such as those under consideration
in this case can result in very considerable distortions of
the internal market
this
conclusion.

in electricity does not affect

(c)

the commitments linked to the financing of the special
pension scheme for employees of the electricity and gas
industries.

(47) The Commission recognises that the payment of such
levies can lead to economic consequences substantially
similar
to those resulting from a total or partial
derogation from some of the obligations contained in
Chapters IV, VI or VII of the Directive. However, such
distortions, by their very nature, do not result from such
a specific derogation as envisaged by the Directive.

Article 2

The transitional regime notified by France concerning the
commitments entered into by EDF linked to the contracts for

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the

electricity produced by the

the purchase of
(cid:145)peak(cid:146)
independent producers, and the commitments entered into by
EDF linked to the SuperphØnix fast breeder reactor, contains
no measures which would constitute derogations
from
Chapters IV, VI or VII of Directive 96/92/EC, as defined by
thereof. Article 24 of Directive 96/92/EC is,
Article 24(2)
therefore, not applicable to the transitional regime notified by
the French authorities.

the electricity and gas industries are not approved by this
Decision, in accordance with Article 24 of Directive 96/92/EC.

Article 4

This decision is addressed to the French Republic.

Article 3

Done at Brussels, 8 July 1999.

The provisions concerning the commitments linked to the
financing of the special pension scheme for the employees of

For the Commission

Christos PAPOUTSIS

Member of the Commission