WRITTEN QUESTION E-2115/00 by Luis Berenguer Fuster (PSE) to the Commission. Quantification of the costs of transition to competition (CTCs) for the Spanish electricity industry in the procedure initiated by the Commission.
Date: 2000-06-30
Institutions: European Parliament, Provisional data
Subjects: control of State aid, electrical industry, intra-EU trade, liberalisation of the market, restriction on competition

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Official Journal of the European Communities

EN

6.3.2001

(2001/C 72 E/228)

WRITTEN QUESTION E-2114/00

by Luis Berenguer Fuster (PSE) to the Commission

(30 June 2000)

Subject: Impact of State aid to Spanish electricity companies: real competition on the generation market

In its report on the Uni(cid:243)n Fenosa-HidrocantÆbrico merger the Spanish Competition Court maintains that,
because it allows CTCs (costs of transition to competition) to be securitised by being transferred to third
parties, the CTC system adopted by Spain removes the disincentive that presently serves to ensure that the
wholesale market price does not rise above a given level.

Does the Commission believe that securitisation of CTCs, which amounts to de facto recognition of a fixed
volume of CTCs regardless of the effects of market variables over time, rules out the possibility of
controlling wholesale market prices?

Given that, as the Spanish competition authority acknowledges, there is no real competition on the
Spanish electricity generation market, does the Commission not consider that securitisation of CTCs is
simply tantamount to abandonment of the only means of controlling the market power that companies
wield over the wholesale electricity market price?

Does it not believe that securitisation of CTCs as proposed under the Spanish system will, to all practical
intents and purposes, prevent genuine competition from being introduced on to the market?

What does the Commission think about the fact that, according to the findings of the Spanish Competition
Court, the wholesale market price increased by 20 % in the first four months of the year?

Answer given by Mr Monti on behalf of the Commission

(8 September 2000)

The three first questions that the Honourable Member asks concern (cid:145)securitisation(cid:146) or the possibility of
transferring to third parties the right to receive aid to cover the costs of transition to competition (CTC).

This possibility is one of the set of measures provided for in the Spanish law on the electricity sector.
These measures are currently being examined by the Commission in the light of the EC Treaty provisions
on State aid. It would be premature to comment on any of these measures before the Commission adopts
a decision on this matter.

As to the Honourable Member(cid:146)s fourth question, the Commission cannot state, on the basis of the
information at its disposal, that the prices on the Spanish electricity market are determined exclusively by
the existence of CTCs or, even less, by their possible securitisation, which is not yet a reality.

(2001/C 72 E/229)

WRITTEN QUESTION E-2115/00

by Luis Berenguer Fuster (PSE) to the Commission

(30 June 2000)

Subject: Quantification of the costs of transition to competition (CTCs) for the Spanish electricity industry

in the procedure initiated by the Commission

On 28 September 1998 the Spanish Electricity Commission, now incorporated into the National Energy
Commission, drew up a public report in which it advised the Spanish Government not to adopt the system
of securitising CTCs, but that recommendation has not been heeded. In its report the Spanish regulatory
body stated that the CTCs for the electricity companies would total no more than Ptas 480 000 million,

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taking into account the variable costs and useful life of generation assets, the demand trend, and the types
of discount. However, the Spanish Government is seeking to grant the electricity companies the right to
securitise Ptas 1 billion (in other words they would receive that amount at all once).

Will the Commission take account of the informed opinion of the Spanish regulatory body as regards the
figure to be put on the CTCs?

Does the Commission not consider that the Spanish regulatory body is better placed than the Commission
itself to quantify the CTCs?

Given that, in his answer of 28 March 2000 to Written Question E-0492/00 (1), Mr Monti confirmed that
neither the Commission nor the independent consultant whom the Commission had appointed was
recalculating the Spanish CTCs, would it not be advisable, if only to enforce Article 87 of the Treaty
with circumspection, for the Commission to check the calculation made by an independent body which,
moreover, happens to be the Spanish market regulator?

Will the Commission accept the Ptas 1 billion in State operating aid without question and without even
obtaining the opinion of those who have carried out an impartial examination and, on that basis, put a
substantially lower figure on the amount required?

(1) OJ C 330 E, 21.11.2000, p. 174.

Answer given by Mr Monti on behalf of the Commission

(28 July 2000)

When assessing a state aid case, the Commission takes account of all the information at its disposal, in
addition to that provided by the national authorities, but is not bound by any of it.

The Commission feels that the role of the Comisi(cid:243)n Nacional del Sistema ElØctrico (CNSE), now part of the
Comisi(cid:243)n Nacional de la Energ(cid:237)a (CNE), is different from that of the Commission. The Commission(cid:146)s role is
to assess the compatibility of the measures in question with the common market,
in application of
Articles 87 and 88 (formerly Articles 92 and 93) of the EC Treaty. The CNSE, on the other hand,
is competent to act in particular as a consultative body for the Spanish authorities on electricity matters
and, to this end, it takes part in the legislative process by means of proposals or opinions. The Honourable
Member will note that, in accordance with Section 8 of Act 54/1997 on electricity, the opinions of the
CNSE regarding competition are not binding on the national competition authorities or, of course,
a fortiori, on the Commission.

Although the Commission is aware of the existence of the report to which the Honourable Member refers,
it preferred, in view of the task conferred upon it by the EC Treaty, to decide for itself on the analyses and
studies needed for its own assessment.

It is not customary for the Commission to formally question third parties such as the CNSE as part of the
preparation of a state aid case.

(2001/C 72 E/230)

WRITTEN QUESTION E-2119/00

by Sebastiano Musumeci (UEN) to the Commission

Subject: Future of the Community twinning programme

(30 June 2000)

In an interview published on page 17 the of the Italian daily newspaper (cid:145)La Repubblica(cid:146) on 20 March this
year Neil Kinnock, Vice-President of the Commission, said in reply to the journalist(cid:146)s question concerning
the future of the Europe twinning programme (cid:145)We deal with the twinning of towns. It is a task which we
have accepted with pleasure and our officials have always carried it out very well. But the fact that we are
short of staff means that we must ask ourselves whether twinning constitutes a central task for the
Commission(cid:146).