1999/795/EC: Commission Decision of 8 July 1999 concerning the Austrian application 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) 1551/5) (Only the German text is authentic)
Date: 1999-07-08
Institutions: European Commission
Subjects: Austria, approximation of laws, electrical energy, single market, transitional period (EU)

L 319/30

EN

Official Journal of the European Communities

11.12.1999

COMMISSION DECISION

of 8 July 1999

concerning the Austrian application 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) 1551/5)

(Only the German text is authentic)

(1999/795/EC)

THE COMMISSION OF THE EUROPEAN COMMUNITIES,

Having regard to the Treaty establishing the European
Community,

reduced by the Austrian Government to a stranded cost
amount of ATS 8,7 billion from the ATS 35,6 billion
contained in the initial notification.

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

the European
the Council of 19 December 1996
in
(cid:145)the Directive(cid:146)), and in particular

common rules
(hereinafter

internal market

the

for

the Member

States of

the Austrian

Having
application,

informed

Whereas:

I. FACTS

1. Procedure

(1) By

of

11

letter

February

the Austrian
Angelegenheiten
Bundesministerium f(cid:252)r
notified to the Commission an application for
a
transitional regime pursuant to Article 24 of Directive
96/92/EC.

1998,
wirtschaftliche

(2) On 23 March 1998, the Commission’s representatives
undertook a fact finding mission to Vienna and met with
the Austrian
wirtschaftliche
Bundesministerium f(cid:252)r
as with representatives of
Angelegenheiten as well
consumers (social partners) and the electricity industry.

(3) By

of

letter

15 October

1998,
wirtschaftliche
Commission
the

the Austrian
Angelegenheiten
Bundesministerium f(cid:252)r
complementary
to
submitted
the
information,
the
report of
in particular
independent accountants and lawyers commissioned by
the Austrian Government to determine the anticipated
arising from the
level of
transitional regime in question. On the basis of
this
report, the application for a transitional regime has been

compensatory payments

final

2. The Austrian electricity sector and implementation

of Directive 96/92/EC

(4) Austria is

for

opening

a market

implementing Directive 96/92/EC by the
Elektrizit(cid:228)tswirtschafts- und Organisationsgesetz (hereinafter
(cid:145)ElWOG(cid:146)), which was published on 18 August 1998 and
entered into force on 19 February 1999, as well as
complementary laws for the nine L(cid:228)nder. The ElWOG
provides
starting with
approximately 27 % in February 1999 and increasing to
approximately 50 % in 2003. Accordingly,
in the first
phase final customers with more than 40 GWh yearly
consumption as well as distributors, which also operate
transmission systems, will be eligible. From February
2000, final customers above 20 GWh/a will be eligible,
as well as all distributors above 40 GWh/a. Finally, in
February 2003, all final customers and all distributors
above 9 GWh/a will be eligible. Austria has opted for a
system of regulated network access.

(5) (cid:214)sterreichische Elektrizit(cid:228)tswirtschafts AG (Verbundgesellschaft)
is the main transmission system operator. Through its
it is also Austria’s main
legally separated subsidiaries,
electricity producing company. Most of the nine regional
electricity companies are not only distributors but also
producers; some of them are also transmission system
operators.

3. The transitional regime notified by the Austrian

Government

3.1. Introduction

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

(6) Austria has notified two schemes pursuant to Article 24

of Directive 96/92/EC.

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Official Journal of the European Communities

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granted only

(7) Guarantees of operation given to electricity generation plants
based on the legal authorisation procedure for power
plants prior to liberalisation. Authorisations for certain
types of power plants were
a
corresponding electricity demand had been assessed
received
((cid:145)Bedarfspr(cid:252)fung(cid:146)). Those power plants
authorisation benefited from a guarantee of operation
and guarantee of cost amortisation. The stranded cost
regime in this
to compensate certain
seeks
generating plants from the loss of income that can be
resulting from the
expected from the lower prices
introduction of competition.

respect

that

if

eligible

(8) The final notification of 15 October 1998 limits the
plants
regime to three
hydropower plants: Freudenau, Mittlere Salzach and
Kraftwerkskette Obere Drau, all operated by subsidiaries
of Verbundgesellschaft.

transitional

to the

(9)

a

the power plant benefits

Long-term procurement contract for indigenous lignite for the
(cid:145)Voitsberg(cid:146) power plant. The contract was concluded in
1977 between the lignite mine GKB and the power plant
subsidiary of Verbundgesellschaft.
operator (cid:214)DK,
from a legal
Additionally,
guarantee of operation of up to 3 % of
the yearly
domestic electricity consumption. The stranded cost
regime thus seeks to compensate this generating plant (i)
for its long-term obligation to purchase lignite above
world coal/lignite prices, and (ii) for the loss of income
regarding the expected lower prices resulting from the
introduction of competition with respect
to the legal
guarantee of operation.

3.2. Details of the guarantees of operation given to
electricity generation plants and the lignite
procurement contract

stranded

(10) The proposed method is defined in recital 69 of the
It provides for operating aid to compensate
ElWOG.
stranded costs
abovementioned
in relation to the
commitments and guarantees of operation. On 11
February 1998, Austria preliminarily notified a total
amount of
cost of ATS 35,58 billion
(approximately EUR 2,5 billion). Based on a subsequent
assessment of the stranded costs through independent
final notification was
accountants
submitted on 15 October 1998, which reduced the total
stranded cost amount to ATS 8,7 billion (approximately
EUR 0,6 billion) which consists of a maximum of
ATS 6,27 billion for the three hydropower plants and
ATS 2,43 billion for the lignite-fired power plant. The
transitional regime is limited until 2009.

and lawyers,

a

(11) C a l c u l a t i o n m e t h o d

In a first step the stranded costs were calculated for each
the discounted difference between
power plant as

guaranteed cost coverage and expected market price for
electricity taking into account the real market opening
per company. In a second step, the degree to which the
viability of the consolidated operating companies would
be affected was assessed.

(12) C o m p e n s a t i o n m e t h o d

to the three hydropower plants,

the
With respect
transitional regime envisages the grant of operating aid,
on an annual basis,
in the light of developments in
market prices for electricity, and the consequent effect
this has on the viability of the hydro plants in question.
With respect
to the lignite fuelled plant, a fixed
compensation payment is envisaged.

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

The transitional regime envisages that the payments will
be financed by the imposition of a levy per kWh of
customers. Captive
electricity purchased by eligible
customers pay their proportional part within the
regulated electricity tariff. The funds are collected by the
network operators (via a charge on transmission) and
administrated by the Ministry of Economic Affairs).

II. LEGAL ANALYSIS

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

96/92/EC

(14) The Austrian Government notified an application for a
transitional regime with respect to alleged commitments
and guarantees of operation pursuant to Article 24 of
the Directive.

2. Requirements of Article 24

(15) Article 24 of Directive 96/92/EC states the following:

(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
electricity industry. The Commission shall
inform the
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

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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)

(20) As stated above,

in order to constitute a transitional
regime within the meaning of Article 24, the system
chosen by the Member State must provide for a
derogation from Chapter IV, VI or VII of Directive
96/92/EC.

(16) Article 24(1) and (2) of Directive 96/92/EC, in the light
of the EC Treaty, thus require the following elements to
be examined by the Commission when considering any
application for a transitional regime.

A. Requirements concerning the nature of the commitments

or guarantees of operation in question

(17)

(1) The existence of a commitment or guarantee of

operation must be proven.

(2) The commitment or guarantees of operation must

have been given before 20 February 1997.

(3) A causal
Directive
inability
commitment must be established.

link between the entry into force of the
the

honour

and

the

to

B. Requirements concerning the measures proposed to achieve

the objectives in question

(18)

(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
the commitments or

and linked to the expiry of
guarantees of operation in question.

(3) The

the

apply

transitional

least
regime must
restrictive measures reasonably necessary to 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
electricity
industry.

system and the structure of

its

(21) The measures

in question are based on a pure
compensation scheme, i.e. a system of charges or levies
implemented by a Member State in order to compensate
stranded costs caused by the application of Directive
96/92/EC. The application of such levies in the present
case
from the
abovementioned chapters of the Directive and cannot
therefore be regarded as a transitional regime in the
meaning of Article 24 of the Directive.

derogation

require

does

not

a

can result

in economic

(22) The fact that measures such as those in question in this
case can result in very considerable distortions of the
single market for electricity do not affect this conclusion.
Indeed, the Commission recognises that the payment of
consequences
such levies
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. 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 one which
needs
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.

examined pursuant

to the

to be

(23)

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

it

4. Conclusions

3. Assessment of the Austrian transitional regime

(19)

it

In the present case, concerning the transitional regime as
is not necessary to determine whether
notified,
requirements A(1), (2), (3) or B(2), (3) are met, because
the measures of the transitional regime in question do
not require a derogation from Chapter IV, VI or VII of
Directive 96/92/EC and thus do not meet requirement
B(1).

(24) The

regime notified by

the Austrian
transitional
Government pursuant
to Article 24 of Directive
96/92/EC has been assessed pursuant to Article 24(1)
and (2). The Commission concludes that a transitional
regime according to Article 24 cannot and need not be
approved to the extent that the measures chosen do not
constitute derogations from Chapters IV, VI and VII of
the Directive. The
of
regime
compensation payments to certain electricity producers,
financed through a levy or charge on consumers. Such
measures are not directly addressed by the Directive but

transfers

contains

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need to be examined pursuant to the rules on State aid,
and in particular Article 87(3)(c) of the EC Treaty,

Article 2

HAS DECIDED AS FOLLOWS:

Article 1

The present Decision concerns the Austrian application for a
transitional
to article 24 of Directive
96/92/EC, notified to the Commission on 11 February 1998
and finalised on 15 October 1998. This notification concerns.

regime pursuant

(cid:151) guarantees of operation given to three hydropower plants,

(cid:151) a long-term procurement contract and a guarantee of

operation given to one lignite plant.

The transitional
regime notified by Austria contains no
measures which would constitute derogations from Chapters
IV, VI or VII of Directive 96/92/EC, as defined by Article
24(2). Article 24 is therefore not applicable to the transitional
regime notified by the Austrian Government.

Article 3

This decision is addressed to the Republic of Austria.

Done at Brussels, 8 July 1999.

For the Commission

Christos PAPOUTSIS

Member of the Commission