Opinion of the European Economic and Social Committee on the ‘Proposal for a Regulation of the European Parliament and of the Council amending Regulation (EC) No 1228/2003 as regards the date of application of certain provisions to Slovenia’ (COM(2004) 309 final — 2004/0109 (COD))
Date: 2004-06-30
Institutions: European Economic and Social Committee
Subjects: Slovenia, cross-border transport, electrical energy, energy grid, market access, transport network

7.12.2004

EN

Official Journal of the European Union

C 302/39

Opinion of the European Economic and Social Committee on the ‘Proposal for a Regulation of the
European Parliament and of the Council amending Regulation (EC) No 1228/2003 as regards the
date of application of certain provisions to Slovenia’

(COM(2004) 309 final — 2004/0109 (COD))

(2004/C 302/10)

On 11 May 2004, the Council of the European Union decided to consult the European Economic and
Social Committee, under Article 95 of the Treaty establishing the European Community, on the abovemen-
tioned proposal.

The Section for Transport, Energy, Infrastructure and the Information Society, which was responsible for
preparing the Committee's work on the subject, adopted its opinion on 10 June 2004. The rapporteur was
Mr Simons.

At its 410th plenary session, held on 30 June and 1 July 2004 (meeting of 30 June 2004), the European
Economic and Social Committee adopted the following opinion by 158 votes to two, with seven absten-
tions:

1. Introduction

3. General comments

1.1
Regulation 1228/2003/EC of the European Parliament
and of the Council on conditions for access to the network for
cross-border exchanges in electricity (the ‘Electricity Regu-
lation’) aims to set up a true single electricity market by step-
ping up cross-border trade in electricity. Fair, cost-oriented,
transparent and directly applicable rules are to be introduced
for the fixing of prices for cross-border transfers and the alloca-
tion of available connection capacity. These rules would take
account of a comparison between efficient network operators
from structurally comparable areas and supplement the provi-
sions of Directive 96/92/EC so that cross-border transactions
are guaranteed effective access to transmission networks.

2. The Commission's proposal

the chapter on the approximation of

The EU Commission proposal is based on Article 95 of
3.1
the Treaty establishing the European Community, which is part
of
laws. The facts,
however — Regulation 1228/2003 came out after the end of
the accession negotiations and the signing of the accession
treaty, so that Slovenia could not take part in the adoption
process — justify in every respect an approach based on the
relevant Accession Treaty and Act of Accession.

3.2
The latter contains provisions concerning the applica-
tion of decisions taken by the institutions, and particularly if a
new Member State has not been able to take part in the nego-
tiations concerning a decision that has been taken between the
date on which the Treaty or Act was signed and the country's
actual accession on 1 May 2004. That is now the case for
Slovenia.

2.1
The Republic of Slovenia has submitted to the Commis-
sion a request for amendment of the Electricity Regulation,
which would allow Slovenia to continue operating its current
system of congestion management at the interconnections with
Austria and Italy until 1 July 2007. At the moment, half of the
total available capacity of the two interconnections in question
is allocated by Slovenia on the basis of this system. In fact,
according to an arrangement between the transmission system
operators concerned, the other halves of the total capacity are
allocated by the Italian or the Austrian system operator respec-
tively. Under the current Slovenian system the available capa-
city,
in case total demand for capacity exceeds the capacity
available (congestion), is allocated to applicants for capacity on
a pro rata basis. The capacity is allocated free of charge. Such a
system cannot be considered a non-discriminatory, market-
the Electricity Regulation.
based solution in the sense of
Slovenia has justified its request
for a derogation on the
grounds that the restructuring of Slovenian industry has not
yet been completed and Slovenian electricity production is still
adjusting to the new market conditions (high costs of invest-
ment in environmental protection).

3.3
It is in the spirit of these provisions that one must
consider the request from the Slovenian government for a post-
ponement until 1 July 2007 of the application of Article 6(1)
of the Regulation and the provisions of the Annex relating
directly to it, together with the present Commission proposal.

In line with the adage ‘pacta sunt servanda’, a refusal
3.4
can only be considered if acceptance of the proposal would
result in irreparable damage for the Union as a whole.

3.5
However, the Commission states in its proposal that the
practical impact of the transitional period on the functioning of
the internal electricity market would be very small. The EESC
can go along with this view. It is also difficult to maintain that
during the requested transitional period Slovenia can realise its
potential of becoming a not unimportant regional hub within
the internal market.

C 302/40

EN

Official Journal of the European Union

7.12.2004

3.6
In addition, the argument that Regulation 1228/2003
was brought in for the very reason of at last getting proper
the ground (1) and the
international
Slovenian request would be in breach of it does not, in view of
the duration, scope and geographical area involved, carry
enough weight for the request to be rejected.

trade in electricity off

3.7
The statement — which in itself is correct — that fair
competition between, for instance, European aluminium and
steel makers as well as between electricity producers is an
essential component of the single market also does not apply
here.

From another angle,

it can be argued that ensuring a
3.8
safe and reliable electricity system in Slovenia and enabling
environmental investments to be made during the transitional
period are grounds for accepting the Commission proposal.

it

The EESC is all the more inclined to recommend accep-
3.9
in its opinion of 17 October
tance of the proposal since,
2001 (2) on Regulation 1228/2003,
said the following
concerning the consequences for the applicant countries, as
they were then: ‘... the electricity and natural gas sectors in the
applicant countries … maintain uncompetitive infrastructures
and management methods. The immediate consequence of this
could be considerable job losses in companies in these sectors,
which in turn would cause unbearable social tensions in the
applicant countries, particularly for those countries which do
not have the same kind of social security system as found in
the Member States. The European Union must share with these
countries the experience that has been gained from the liberali-
sation processes currently underway in Europe, and provide
funding to help them modernise their companies. Opening up
these new markets is not enough; their energy sectors must
also be restructured so that companies in the applicant coun-
tries can compete under the same conditions.’

Brussels, 30 June 2004.

4. Summary and conclusion

4.1
The arguments put forward in the Commission proposal
for allowing Slovenia until 1 July 2007 to comply with Article
6(1) of Regulation 1228/2003 and with the relevant provisions
justified when
concerning congestion management are not
considered purely from the point of view of the interests of fair
competition in the single market.

4.2
However, after considering the facts of the time when
the Regulation was produced and the accession negotiations
were signed, the EESC feels that these arguments are justified.
Authorisation of the short transitional period requested will not
result in irreparable damage for the Union as a whole — on
the contrary: security and reliability as well as environmental
investments in the Slovenian system are ensured — and in its
opinion on Regulation 1228/2003 (3), on the issue of competi-
tion from the applicant states as they were then, the EESC
recommended that the EU should offer a helping hand. The
EESC believes that it is quite clear that Slovenia was unable to
take part in the negotiations concerning or in the approval of
Regulation 1228/2003.

4.3
Quite apart from the explanation and the basis of the
Commission proposal, which should be completed or adapted
in line with the views set out above, the EESC recommends
acceptance of
the proposal to postpone the application of
Regulation 1228/03 until 1 July 2007.

The President

of the European Economic and Social Committee

Roger BRIESCH

(1) See EESC opinion on the Proposal for a Regulation of the European
Parliament and of the Council on conditions for access to the
network for cross-border exchanges in electricity, OJ C 36 of
8.2.2002, page 10.

(2) See EESC opinion on the Proposal for a Regulation of the European
Parliament and of the Council on conditions for access to the
network for cross-border exchanges in electricity, OJ C 36 of
8.2.2002, page 10.

(3) Point 6.6 of the EESC opinion, OJ C 36 of 8.2.2002, page 10.