[ParlTrack]

Proposal for a directive – amending act
Recital 7

(7) Only the removal of the inherent incentive for vertically integrated companies to discriminate against competitors as regards network access and investment can ensure effective unbundling. Ownership unbundling, which implies the network owner being appointed as the network operator and being independent from any supply and production interests, is ~~clearly the most~~an effective and stable way to solve the inherent conflict of interest and to ensure security of supply. For this reason, the European Parliament in its Resolution on Pprospects for the internal gas and electricity market adopted on 10 July 2007 referred to ownership unbundling at transmission level as the most effective tool to promote investments in infrastructures in a non-discriminatory way, fair access to the grid for new entrants and transparency in the market. Member States should therefore be required to ensure that the same person or persons are not entitled to exercise control, including through minority blocking rights on decisions of strategic importance such as investments, over a production or supply undertaking and, at the same time, hold any interest in or exercise any right over a transmission system operator or transmission system. Conversely, control over a transmission system operator should preclude the possibility of holding any interest in or exercising any right over a supply undertaking.

2008/03/11
Committee: ECON

Bernhard RAPKAY, Robert GOEBBELS

Proposal for a directive – amending act
Recital 10 a (new)

(10a) Assuming that they comply with the provisions on effective and efficient corporate unbundling, vertically integrated companies can continue to own network assets while making for effective separation of interests, provided that the network company performs all the functions of a network operator and the necessary provision is made for detailed regulation and comprehensive regulatory oversight mechanisms.

2008/03/11
Committee: ECON

Bernhard RAPKAY, Robert GOEBBELS

Proposal for a directive – amending act
Recital 11

(11) Where the undertaking owning a transmission system is part of a vertically integrated undertaking, Member States should therefore be given a choice between ownership unbundling ~~and, as a derogation~~, setting up system operators which are independent from supply and generation interests, and effective and efficient corporate unbundling of transmission system operators. The full effectiveness of the independent system operator solution needs to be assured by way of specific additional rules. To preserve fully the interests of the shareholders of vertically integrated companies, Member States should have the choice of implementing ownership unbundling either by direct divestiture or by splitting the shares of the integrated company into shares of the network company and shares of the remaining supply and generation business, provided that the requirements resulting from ownership unbundling are complied with.

2008/03/11
Committee: ECON

Bernhard RAPKAY, Robert GOEBBELS

Proposal for a directive – amending act
Article 1 – point 2

Directive 2003/54/EC
Article 3 – paragraph 10

2. In Article 3, the following paragraph 10 is added: “10. The Commission may adopt guidelines for the implementation of this Article. This measure, designed to amend non-essential elements of this Directive by supplementing it, shall be adopted in accordance with the regulatory procedure with scrutiny referred to in Article 27b(3).”deleted

2008/03/11
Committee: ECON

Bernhard RAPKAY, Robert GOEBBELS

Proposal for a directive – amending act
Article 1 – point 4

Directive 2003/54/EC
Article 8 – paragraph -1 a (new)

-1a. To guarantee the independence of transmission system operators, Member States shall ensure that, with effect from [transposition deadline + 1 year], vertically integrated companies comply either with Article 8(1)(a) to (d) on complete ownership unbundling or with Article 10 on independent system operators, or Article 10b on effective and efficient corporate unbundling..

2008/03/11
Committee: ECON

Bernhard RAPKAY, Robert GOEBBELS

Proposal for a directive – amending act
Article 1 – point 6 a (new)

Directive 2003/54/EC
Article 9 – paragraph 1 a to 1 h (new)

(6a) In Article 9, the following paragraphs shall be added: "1a. Each transmission system operator shall elaborate a 10-year network development plan at least every two years. It shall provide efficient measures in order to guarantee system adequacy and security of supply. That development plan shall, in particular: (a) indicate to market participants the main transmission infrastructures to be built over the next ten years. (b) include all the investments already decided upon and identify new investments for which an implementation decision has to be taken during the following three years. 1b. In order to elaborate its 10-year network development plan, each transmission system operator shall make reasonable estimates about the evolution of generation, consumption and exchanges with other countries, taking into account regional and European-wide existing network investment plans. A transmission system operator shall submit its estimates to the national regulatory authority within a reasonable time period. 1c. The national regulatory authority shall consult all relevant network users on the basis of a draft 10-year network development plan in an open and transparent manner and may publish the result of the consultation process, in particular as regards possible investment needs. 1d. The national regulatory authority shall examine whether the 10-year network development plan covers all investment needs identified in the consultation and may require that the transmission system operator amend its plan. 1e. If a transmission system operator refuses to implement a specific investment that is listed in the 10-year network development plan for execution during the following three years, Members States shall ensure that the regulatory authority has the competence to: (a) request the transmission system operator to execute its investment obligations using its financial capacities; or (b) invite independent investors to tender for a necessary investment in a transmission system, possibly requiring the transmission system operator to agree to: - third-party financing; - a third party building a new asset; - a third party operating a new asset; and/or - a capital increase to finance the necessary investments and allow independent investors to participate in the capital. The relevant financial arrangements shall be subject to the approval of the regulatory authority. Whether the transmission system operator or a third party makes a specific investment, tariff regulation shall allow for revenue that covers the costs of such investment. 1f. The national regulatory authority shall monitor and evaluate the implementation of the investment plan. 1g. Transmission system operators shall be required to establish and publish transparent and efficient procedures for non-discriminatory connection new power plants to the grid. Those procedures shall be subject to the approval of national regulatory authorities. 1h. Transmission system operators shall not be entitled to refuse the connection of new power plants on the grounds of possible future limitations to available network capacities, such as congestion in distant parts of the transmission grid. Transmission system operators shall be required to supply necessary information. Transmission system operators shall not be entitled to refuse a new connection point on the sole ground that it will lead to additional costs linked with necessary capacity increase of grid elements in the close-up range to the connection point."

2008/03/11
Committee: ECON

Bernhard RAPKAY, Robert GOEBBELS

Proposal for a directive – amending act
Article 1 – point 8

Directive 2003/54/EC
Article 10 b (new)

Article 10b Effective und efficient corporate unbundling of transmission systems Assets, plant, staff, and identity 1. Transmission system operators shall be equipped with all the human, material, and financial resources of the vertically integrated company necessary in order to carry on the proper business of electricity transmission. The following in particular shall be ensured: (i) All assets necessary for the proper business of electricity transmission shall be owned by the transmission system operator. (ii) All staff necessary for the proper business of electricity transmission shall be employed directly by the transmission system operator. (iii) Sufficient funds for future investment projects shall remain available as provided for in the annual financial planning. The fields of activity covered by points (i) to (iii) shall encompass at least • representation of transmission system operators and contacts with third parties and regulatory authorities • guaranteeing and regulating third party access, in particular for new market entrants from the renewable energy sector • collection of access charges, revenue from congestion management, and payments under the inter-transmission system operator compensation mechanism in accordance with Article 3 of Regulation (EC) No 1228/2003 of the European Parliament and of the Council of 26 June 2003 on conditions for access to the network for cross-border exchanges in electricity*, • operation, maintenance, and development of the transmission grid • investment planning to guarantee the long-term ability of the grid to meet commensurate demand and ensure security of supply • legal advice and representation • accounting and IT services 2. No staff or services may be provided to any branch of the vertically integrated company performing the functions of generation or supply. 3. The transmission system operator may not carry on any businesses or activities other than transmission likely to be incompatible with its tasks, including ownership of shares or interests in a company belonging to, or a part of, the vertically integrated company or in any other electricity or gas undertaking. Exceptions to the above shall require the prior consent of the national regulatory authority and shall be confined to ownership of shares and interests in other network companies. 4. The transmission system operator shall have its own corporate identity, which shall be clearly distinct from the vertically integrated company, with separate branding, communication, and business premises. 5. The transmission system operator may not supply the vertically integrated company with any sensitive information or information constituting a competitive advantage unless it has shared that information with all market participants, on an equal footing and without discrimination. The types of information covered by this provision shall be determined by the transmission system operator together with the national regulatory authority. 6. The account books of transmission system operators shall be inspected by an auditor other than the one who inspects the vertically integrated company and all of its affiliated companies. Independence of the management, the chief executive, or the board of executive directors of the transmission system operator 7. Decisions concerning the appointment or any early termination of the employment of the chief executive or of members of the board of executive directors of the transmission system operator and the contractual agreements to that effect for the purposes of employment or termination thereof shall be notified to the national regulatory authority. Such decisions and agreements shall not be binding unless the regulatory body has refrained from exercising its right to object in the three weeks following the notification. The regulatory authority may object to appointments and contractual agreements to that effect if serious doubts arise as to the professional independence of the chief executive appointed, or of the member of the board of executive directors, or, where employment and the contractual agreements to that effect have been terminated before the scheduled date, there are serious doubts about the justification for that measure. 8. The chief executive, and members of the board of executive directors, of the transmission system operator shall be allowed an effective right to appeal to the regulatory authority or a court if their employment has been terminated before he scheduled date. 9. The regulatory authority must rule on any appeal within six months. That time limit may not be exceeded without factual justification. 10. For no less than three years after they have ceased to be employed with the transmission system operator, the chief executive concerned, or the members of the board of executive directors, may not work in any establishment of the vertically integrated company performing the functions of generation or supply. 11. The chief executive and members of the board of executive directors shall not hold any shares in, or receive any form of payment from, any undertaking belonging to the vertically integrated company apart from the transmission system operator. No portion of the salary paid to the chief executive or members of the board of executive directors shall depend on fields of activity in which the vertically integrated company operates, apart from those of the transmission system operator. 12. The chief executive or members of the board of executive directors shall not be empowered to assume direct or indirect responsibility in the routine operations of any other establishment of the vertically integrated company. 13. Notwithstanding the above provisions, the transmission system operator, independent from the integrated electricity undertaking, shall have full decision-making powers regarding the assets necessary for the operation, maintenance, and development of the grid. The foregoing shall apply without prejudice to appropriate coordination procedures enabling the parent company to lay down general limits on the amount of debt that its subsidiary may incur. The parent company may not give any instructions exceeding the scope of the approved budget or any equivalent arrangement as regards routine operations or individual decisions to construct or modernise transmission lines. Supervisory board/Administrative board 14. The chairman of the supervisory board/administrative board of the transmission system operator and board members shall not be entitled to work in any establishment of the vertically integrated company. Furthermore, they may not serve on the supervisory board/administrative board of any branch or subsidiary of the vertically integrated company. 15. Members of the supervisory board/administrative board shall be independent and appointed for a term of at least five years. Their appointment shall be notified to the regulatory authority and shall take effect only under the conditions set out in paragraph 7. 16. For the purposes of paragraph 15, a member of the supervisory board/administrative board shall be deemed to be independent if he/she does not stand in any business or other relationship to the vertically integrated company or its majority shareholders or the board of executive directors of the vertically integrated company or its majority shareholders of a nature likely to influence his/her power of judgement. The following conditions in particular must be satisfied: (a) within the five years preceding his/her appointment to the supervisory board/administrative board he/she must not have been employed in an establishment of the vertically integrated company performing the functions of generation and supply; (b) he/she must not hold any shares in or receive any form of payment from the vertically integrated company or any of its affiliates apart from the transmission system operator; (c) while serving on the supervisory board/administrative board he/she must not stand in any relevant business relationship to any establishment of the vertically integrated company performing energy supply functions; (d) he/she must not serve on the board of executive directors of an undertaking in which the vertically integrated company appoints members of the supervisory board/administrative board. Compliance (unbundling) officer 17. Member States shall ensure that transmission system operators draw up a compliance programme laying down measures serving to rule out discriminatory conduct. The programme shall set out the specific obligations of employees to attain that objective. It shall be subject to approval of the regulatory authority. Compliance with the programme shall be independently monitored by the compliance officer. The regulatory authority shall have the power to impose sanctions if the compliance programme is not properly implemented. 18. The chief executive or board of executive directors of the transmission system operator shall appoint a person or body to be a compliance officer responsible for (i) monitoring implementation of the compliance programme; (ii) drawing up a detailed annual report, the criteria for which shall be laid down by the regulatory authority in agreement with the European Agency for the Cooperation of Energy Regulators; laying down the measures to implement the compliance programme and submitting the report to the regulatory authority; (iii) issuing recommendations on the compliance programme and its implementation. 19. The independence of the compliance officer shall be guaranteed in particular by the terms of his employment contract. 20. The compliance officer shall have the opportunity to regularly approach the supervisory boards/administrative boards of the transmission system operator and the vertically integrated company, and the regulatory authorities. 21. The compliance officer shall attend all meetings of the supervisory board/administrative board of the transmission system operator given over to the following areas: (i) grid access and connection conditions, including collection of access charges, revenue from congestion management, and payments under the inter- transmission system operator compensation mechanism in compliance with Article 3 of Regulation (EC) No 1228/2003; (ii) projects undertaken in order to operate, maintain, and develop the transmission system, including investment in interconnection infrastructure and connections; (iii) balancing rules, including reserve power rules; (iv) energy purchases to cover energy losses. 22. At those meetings, the compliance officer shall prevent information about generator or supplier activities that might prove economically advantageous from being disclosed in a discriminatory manner to the supervisory board/administrative board. 23. The compliance officer shall be given access to all relevant books, records, and offices of the transmission system operator, as well as to all the information required for the proper performance of his duties. 24. The compliance officer shall be appointed or dismissed by the chief executive/ board of executive directors only after prior approval by the regulatory authority. 25. The compliance officer may not have any form of business dealings with the vertically integrated company for at least five years after the termination of his appointment. 26. Transmission system operators shall draw up a 10-year network development plan at least every two years. They shall provide for efficient measures in order to guarantee that the grid will be adequate and ensure security of supply. 27. The 10-year network development plan shall in particular (a) draw the attention of market participants to the main transmission infrastructure to be built in the next ten years, (b) cover all investment already decided upon and identify new investment for which an implementation decision has to be taken in the next three years. 28. In order to draw up this 10-year network development plan, each transmission system operator shall make reasonable assumptions as to the trend in generation, consumption, and exchanges with other countries, and shall take into account regional and Europe-wide investment plans for the existing network. The transmission system operator shall submit the draft in due time to the national regulatory authority. 29. The regulatory authority shall consult all relevant network users on the basis of a draft text of the 10-year network development plan in an open and transparent manner and may publish the outcome of the consultation procedure, in particular the possible investment needs. 30. The regulatory authority shall examine whether the 10-year network development plan fully covers the investment needs identified in the consultations. The authority may oblige the transmission system operator to alter its plan. 31. If the transmission system operator refuses to implement a specific investment listed in the 10-year network development plan to be undertaken in the next three years, the Member State concerned shall ensure that the regulatory authority has the necessary powers to implement one of the following measures: (a) oblige the transmission system operator, by all legal means, to fulfil its investment obligations using its own financial resources, or (b) invite independent investors to tender for the necessary investment in a transmission system and, in so doing, oblige the transmission system operator - to agree to financing by any third party, - to agree to construction works by any third party or build the necessary new assets, - to agree to operate the new assets, - to accept a capital increase, in order to finance the necessary investments, and allow independent investors to acquire shares of that capital. The relevant financial arrangements shall be subject to the approval of the regulatory authority. In both cases, tariff regulation shall be such as to enable revenue to cover the investment costs. 32. The regulatory authority shall monitor and assess the implementation of the investment plan. 33. Transmission system operators shall be obliged to devise and publish transparent and efficient procedures for non-discriminatory connection of new power plants to the grid. Those procedures shall be subject to the approval of national regulatory authorities. 34. Transmission system operators shall not be entitled to refuse the connection of a new power plant on account of possible future limitations to available network capacities, e.g. congestion in remote parts of the transmission grid. The transmission system operator shall be obliged to supply the necessary information. 35. Transmission system operators shall not be entitled to refuse a new connection point solely on the grounds that the new connection would entail additional costs because of the need to increase the capacity of grid elements within close range of the new connection point. Regional cooperation 36. If Member States opt to pursue regional cooperation, they must impose specific obligations on the transmission system operator, to be reflected in a clearly defined time-frame. Those obligations must, in addition, serve gradually to establish a common regional dispatching centre, which shall assume responsibility for security matters no later than six years after the entry into force of this Directive. 37. Where several Member States cooperate at regional level, they shall designate a regional coordinator in agreement with the Commission. 38. The regional coordinator shall promote cooperation at regional level among regulatory authorities and any other appropriate authorities, network operators, power exchanges, network users, and market participants. In particular he shall be called upon to (a) promote efficient new investment in interconnection infrastructure. To that end he shall help transmission system operators to draw up their regional interconnection infrastructure plans and assist in the coordination of their investment decisions and, where applicable, their open season procedure; (b) encourage efficient and safe use of the grid. To that end he shall help transmission system operators, national regulatory authorities, and other national authorities concerned to coordinate their activities by devising joint allocation procedures and safeguards; (c) report every year to the Commission and the Member States concerned on the progress achieved in the region and on such difficulties or obstacles as might impede progress. Sanctions 39. To enable them to fulfil the obligations imposed on it by this Article, the national regulatory authority shall be accorded the following rights: (i) the right to demand any information from the transmission system operator and to approach all of the operator’s staff directly; in case of doubt this right shall likewise be enforceable in relation to the vertically integrated company and its establishments; (ii) the right to conduct all necessary investigations concerning the transmission system operator and, in case of doubt, the vertically integrated company and its establishments; the provisions applicable shall be those set out in Article 20 of Council Regulation (EC) No 1/2003 of 16 December 2002 on the implementation of the rules on competition laid down in Articles 81 and 82 of the Treaty **. 40. To enable it to fulfil its obligations within the meaning of this Article, the national regulatory authority shall be given the right to impose effective, appropriate, and dissuasive sanctions on a transmission system operator and/or a vertically integrated company should they fail to comply with their obligations under this Article or with decisions of the national regulatory authority. This right shall comprise (i) the right to impose effective, appropriate, and dissuasive fines, the amount of which shall be determined according to the turnover of the transmission system operator; (ii) the right to issue orders to refrain from discriminatory conduct; (iii) the right to withdraw the licence of the transmission system operator, at least partially, if the operator repeatedly infringes the unbundling rules laid down in this Article. __________ * OJ L 176, 15.7.2003, p. 1. Last amended by Commission Decision 2006/770/EC of 9 November 2006 (OJ L 312, 11.11.2006, p. 59). ** OJ L 1, 4.1.2003, p. 1. Last amended by Regulation (EC) No 1419/2006 of 25 September 2006.

2008/03/11
Committee: ECON

Bernhard RAPKAY, Robert GOEBBELS

Proposal for a directive – amending act
Article 1 – point 10

Directive 2003/54/EC
Article 15 – paragraph 4

4. The Commission may adopt guidelines or procedural requirements to ensure full and effective compliance of the distribution system operator with paragraph 2 as regards the full independence of the distribution system operator, the absence of discriminatory behaviour, and that supply activities of the vertically integrated undertaking cannot take unfair advantage of its vertical integration. This measure designed to amend non-essential elements of this Directive by supplementing it shall be adopted in accordance with the regulatory procedure with scrutiny referred to in Article 27b(3).”.

2008/03/11
Committee: ECON

Bernhard RAPKAY, Robert GOEBBELS

Proposal for a directive – amending act
Article 1 – point 12

Directive 2003/54/EC
Article 22c – paragraph 1 – point (m)

(m) ensuring ~~acces~~that all market participants have efficient access on equal terms to customer consumption data, the application of a harmonised format for consumption data and the access to data under paragraph (h) of Annex A;

2008/03/11
Committee: ECON

Bernhard RAPKAY, Robert GOEBBELS

Proposal for a directive – amending act
Article 1 – point 12

Directive 2003/54/EC
Article 22c – paragraph 3 – point (b)

(b) to carry out in cooperation with the national competition authority investigations of the functioning of electricity markets, and, taking into account the respective powers and responsibilities of the two authorities, to decide, in the absence of violations of competition rules, ofn any ~~appropriate measures~~ necessary and appropriate proportionate measures to promote effective competition and ensure the proper functioning of the market, including virtual power plants;.

2008/03/11
Committee: ECON

Bernhard RAPKAY, Robert GOEBBELS

Proposal for a directive – amending act
Article 1 – point 12

Directive 2003/54/EC
Article 22c – paragraph 4 – point (a)

(a) connection and access to national networks, including transmission and distribution tariffs and the methods of calculating them. These tariffs shall allow the necessary investments in the networks to be carried out in a manner allowing these investments to ensure the viability of the networks;

2008/03/11
Committee: ECON

Bernhard RAPKAY, Robert GOEBBELS

Proposal for a directive – amending act
Article 1 – point 12

Directive 2003/54/EC
Article 22c – paragraph 13

13. Member States shall ensure that suitable mechanisms exist at national level under which a party affected by a decision of the national regulatory authority has a right of appeal to a ~~body independent of the parties involv~~national judicial body or other national authorities independent of the parties involved and the Government of the Member State concerned.

2008/03/11
Committee: ECON

Bernhard RAPKAY, Robert GOEBBELS

Proposal for a directive – amending act
Article 2 – paragraph 2 a (new)

2a. The Commission shall report annually to the European Parliament and the Council on the progress of the practical and formal transposition of this Directive in the individual Member States.

2008/03/11
Committee: ECON

Norbert GLANTE, Robert GOEBBELS, Edit HERCZOG, Atanas PAPARIZOV, Anni PODIMATA, Bernhard RAPKAY, Hannes SWOBODA, Catherine TRAUTMANN

Proposal for a directive – amending act
Recital 10 a (new)

(10a) Complying with the regulations on an effective and efficient legal unbundling and provided that the network undertaking performs all the functions of the network operator and a detailed regulation and extensive regulatory control mechanism are put in place, vertical integrated undertakings may remain the owner of their network assets and ensure an effective separation of interests at the same time.

2008/03/17
Committee: ITRE

Norbert GLANTE, Robert GOEBBELS, Edit HERCZOG, Atanas PAPARIZOV, Anni PODIMATA, Bernhard RAPKAY, Hannes SWOBODA, Catherine TRAUTMANN

Proposal for a directive – amending act
Recital 11

(11) Where the undertaking owning a transmission system is part of a vertically integrated undertaking, Member States should therefore be given a choice between ownership unbundling ~~and, as a derogation~~, setting up system operators which are independent from supply and generation interests and effective and efficient legal unbundling of transmission system operators. The full effectiveness of the independent system operator solution needs to be assured by way of specific additional rules. To preserve fully the interests of the shareholders of vertically integrated companies, Member States should have the choice of implementing ownership unbundling either by direct divestiture or by splitting the shares of the integrated company into shares of the network company and shares of the remaining supply and generation business, provided that the requirements resulting from ownership unbundling are complied with.

2008/03/17
Committee: ITRE

Bernhard RAPKAY

Recital 24 a (new)

(24a) In applying the provisions of this Directive, the national regulatory authorities should pay due attention to the specific circumstances of small and medium-sized energy suppliers, particularly from an administrative and economic viewpoint.

2009/03/11
Committee: ITRE

Bernhard RAPKAY

Article 20 – paragraph 3 – subparagraph 1

(3) The first subparagraph of Article 19(2), the first subparagraph of Article 19(3) and Article 19(4) to (7) shall apply to at least half of the members of the Supervisory Body minus one1. 1 The Supervisory Body members representing other interested parties such as employees of the transmission system operator in accordance with paragraph 2 of this Article shall not belong either to the body of members representing the vertically integrated undertaking or to the body of supervisory body members subject to the requirements of the first subparagraph of Article 19(2), the first subparagraph of Article 19(3) and Article 19(4) to (7).

2009/03/11
Committee: ITRE

Bernhard RAPKAY

Article 34 – paragraph 5 a (new)

(5a) Paragraphs 4 and 5 shall be without prejudice to the constitutional requirements of the Member State's administrative organisation.

2009/03/11
Committee: ITRE

Norbert GLANTE, Robert GOEBBELS, Edit HERCZOG, Atanas PAPARIZOV, Anni PODIMATA, Bernhard RAPKAY, Hannes SWOBODA, Catherine TRAUTMANN

Proposal for a directive – amending act
Article 1 – point 4

Directive 2003/54/EC
Article 8 – paragraph 1 – introductory part

1. In order to ensure the independence of transmission system operators, Member States shall ensure that as from [date of transposition plus one year] vertically integrated undertakings have to comply either with the following points (a) to (d) or with Article 10 or with the provisions of Article 10b:

2008/04/11
Committee: ITRE

Norbert GLANTE, Robert GOEBBELS, Edit HERCZOG, Atanas PAPARIZOV, Anni PODIMATA, Bernhard RAPKAY, Hannes SWOBODA, Catherine TRAUTMANN

Proposal for a directive – amending act
Article 1 – point 8 a (new)

Directive 2003/54/EC
Article 10 b (new)

(8a) The following Article shall be inserted: "Article 10b Effective and efficient legal unbundling of transmission systems I. Assets, equipment, staff and identity 1. Transmission system operators shall be equipped with all human, physical and financial resources of the vertically integrated undertaking necessary for the regular business of electricity transmission, in particular: (i) transmission system operator shall own assets that are necessary for the regular business of electricity transmission; (ii) transmission system operator shall employ personnel necessary for the regular business of electricity transmission; (iii) appropriate financial resources for future investment projects shall be available in the annual financial plan. The activities deemed necessary for the regular business of electricity transmission mentioned in previous subparagraph shall at least include: - representation of the transmission system operator and contacts with third parties and national regulatory authorities, - granting and managing third party access to the grid, especially the access for new market operators and producers of renewable energies, - collection of the access charges, congestion rents and payments under the inter transmission system operator compensation mechanism in compliance with Article 3 of Regulation (EC) No 1228/2003, - operation, maintenance and development of the transmission system, - investment planning ensuring the long- term ability of the system to meet reasonable demand and guaranteeing security of supply, - legal services, - accountancy and IT services. 2. Leasing of personnel and rendering of services, from and to any branch of the vertically integrated undertaking performing functions of generation or supply, shall be prohibited. 3. The transmission system operator shall not engage in any business or activity outside transmission which could be in conflict with its tasks, including the holding of shares or interests in any undertaking or part of the vertically integrated company or in any other electricity and gas company. Exceptions require the prior consent of the national regulatory authority and shall be restricted to shares and interests in other network businesses. 4. The transmission system operator shall have its own legal identity, significantly different from the vertically integrated undertaking with separate branding, communication and premises. 5. The transmission system operator shall not share any commercially advantageous and sensitive information with any undertaking of the vertically integrated undertaking unless it does so with all market participants in a non- discriminatory way. The transmission system operator shall in cooperation with the national regulatory authority define this information. 6. Transmission system operators´ accounts shall be audited by another auditor than the one auditing the vertically integrated undertaking and all its affiliated companies. II. Independence of the transmission system operator management, chief executive officer / executive board 7. Decisions on the appointment and on any early termination of the employment of the chief executive officer / members of the executive board of the transmission system operator and the conclusion or early termination of the respective employment agreements with these persons shall be notified to the national regulatory authority. These decisions and agreements may become binding only if, within a period of 3 weeks after notification, the national regulatory authority has not used its right of veto. A veto may be issued in cases of appointment and conclusion of respective agreements if serious doubts arise as to the professional independence of the nominated chief executive officer / member of the executive board; in the case of early termination of employment and of respective agreements of the chief executive officer / member of the executive board, the veto may be used if serious doubts exist regarding the basis and justification of such termination. 8. Right of appeal to the national regulatory authority or to a court shall be guaranteed to the chief executive officer / member of the executive board of the transmission system operator in the case of early terminations of their employment. 9. The national regulatory authority shall decide on the appeal within six months. Exceptions shall be justified. 10. After termination of employment in the transmission system operator, former chief executive officers / members of the executive board shall not participate in any branch of the vertically integrated undertaking performing functions of generation or supply for a period of not less than 3 years. 11. The chief executive officer / members of the executive board shall not hold any interest in or receive any compensation from any undertaking of the vertically integrated company other than the transmission system operator. His/their remuneration shall in no part depend on activities of the vertically integrated undertaking other than those of the transmission system operator. 12. The chief executive officer or the members of the executive board of the transmission system operator may not bear responsibility, directly or indirectly, for the day-to-day operation of any other branch of the vertically integrated undertaking. 13. Without prejudice to the provisions above, the transmission system operator shall have all effective decision-making rights, independent from the integrated electricity undertaking, with respect to assets necessary to operate, maintain or develop the network. This should not prevent the existence of appropriate coordination mechanisms to ensure that the parent company is able to set global limits on the levels of indebtedness of its subsidiary. It shall not permit the parent company to give instructions regarding day-to-day operations, nor with respect to individual decisions concerning the construction or upgrading of transmission lines, that do not exceed the terms of the approved financial plan, or any equivalent instrument. III. Supervisory board / Board of directors 14. The chairman of the supervisory board/board of directors of the transmission system operator and all of its members shall not participate in any branch of the vertically integrated undertaking. They shall also not be members of the supervisory board/board of directors of any undertaking of the vertically integrated company. 15. The supervisory boards / boards of directors of transmission system operators shall include also independent members, appointed for a term of at least 5 years. Their appointment shall be notified to the regulatory authority and become binding under the conditions described in paragraph 6. 16. For the purpose of paragraph 15, a member of the supervisory board / board of directors of a transmission system operator shall be deemed independent if he is free of any business, or other relationship with the vertically integrated undertaking, its controlling shareholders or the management of either, that creates a conflict of interest, in particular: (a) has not been an employee of any branch of the vertically integrated undertaking performing functions of generation and supply in five years prior to their appointment as supervisory board / board of directors member; (b) does not hold any interest in and does not receive any compensation from the vertically integrated undertaking or any of its affiliates except the transmission system operator; (c) does not hold any relevant business relationship with any branch of the vertically integrated company performing functions of energy supply during his/her appointment as supervisory board / board of directors member; (d) is not a member of the executive board of a company in which the vertically integrated undertaking appoints members of the supervisory board /board of directors. IV. Compliance officer 17. Member States shall ensure that transmission system operators establish and implement a compliance programme which sets out measures to be taken to ensure that discriminatory conduct is excluded. The programme shall also set out the specific obligations of employees of the transmission system operator to meet this objective. It shall be subject to approval of the national regulatory authority. Compliance of the program shall be independently monitored by the compliance officer. The national regulatory authority shall have the power to impose sanctions in case of inappropriate implementation of the compliance program by the transmission system operator. 18. The chief executive officer/ executive board of the transmission system operator shall appoint a person or a body in a function of a compliance officer who shall be responsible for: (i) monitoring the implementation of the compliance programme; (ii) elaborating an detailed annual report, setting out the measures taken in order to implement the compliance programme and submitting it to the national regulatory authority; definition of measures for the implementation of the compliance program and presentation of the report to the regulatory authority; (iii) issuing recommendations on the compliance programme and its implementation. 19. The independence of the compliance officer shall be guaranteed in particular by the terms of his/her employment contract. 20. The compliance officer shall have the opportunity to regularly address the supervisory board/board of directors of the transmission system operator and of the vertically integrated undertaking and the national regulatory authorities. 21. The compliance officer shall participate at all meetings of the supervisory board / board of directors of the transmission system operator that address the following issues: (i) conditions for access and connection to the grid, including the collection of access charges, congestion rents, and payments under the inter transmission system operator compensation mechanism in compliance with Article 3 of Regulation (EC) No 1228/2003; (ii) projects undertaken in order to operate, maintain and develop the transmission grid system, including interconnection and connection investments; (iii) balancing rules, including reserve power rules; (iv) energy purchases in order to cover energy losses. 22. During these meetings, the compliance officer shall prevent information about generation or supply activities which may be commercially advantageous from being disclosed in a discriminatory manner to the supervisory board/board of directors. 23. The compliance officer shall have access to all relevant books, records and offices of the transmission system operator and to all the necessary information for the fulfilment of his/her tasks. 24. The compliance officer shall be nominated and removed by the chief executive officer / executive board only after prior approval by the national regulatory authority. 25. Following revocation of his/her mandate, the compliance officer should be barred from having business relations with the vertical integrated undertaking for a period of not less than five years. V. Grid development and powers to make investment decisions 26. Transmission system operators shall elaborate a 10-year network development plan at least every two years. They shall provide efficient measures in order to guarantee system adequacy and security of supply. 27. The 10-year network development plan shall in particular: (a) indicate to market participants the main transmission infrastructures that ought to be built over the next ten years, (b) contain all the investments already decided and identify new investments for which an implementation decision has to be taken in the next three years. 28. In order to draw up this 10-year network development plan, each transmission system operator shall make reasonable hypothesis about the evolution of generation, consumption and exchanges with other countries, and take into account regional and European-wide existing network investment plans. Transmission system operator shall submit in due time the draft of this plan to the national regulatory authority. 29. The national regulatory authority shall consult all relevant network users on the basis of a draft for the 10-year network development plan in an open and transparent manner and may publish the result of the consultation process, in particular possible needs for investments. 30. The regulatory authority shall examine whether the draft 10-year network development plan covers all investment needs identified in the consultation. This authority may oblige the transmission system operator to amend its draft. 31. If the transmission system operator rejects to implement a specific investment listed in the 10-year network development plan to be executed in the next three years, Members States shall ensure that the national regulatory authority has the competence to take one of the following measures: (a) request by all legal means the transmission system operator to execute its investment obligations using its financial capacities, or (b) invite independent investors to participate in a tender for a necessary investment in a transmission system and at the same time may oblige the transmission system operator: - to agree to financing by any third party, - to agree to building by any third party or to build the respective new assets, - to operate the respective new asset and - to oblige transmission system operator to accept a capital increase to finance the necessary investments and allow independent investors to participate in the capital. The relevant financial arrangements shall be subject to the approval of the national regulatory authority. In both cases, tariff regulation shall allow for revenues that cover the costs of such investments. 32. The national regulatory authority shall monitor and evaluate the implementation of the investment plan. VI. Decision-making powers regarding the connection of new power plants to the transmission grid 33. Transmission system operators shall be obliged to establish and publish transparent and efficient procedures for non-discriminatory connection of new power plants to the grid. Those procedures shall be subject to the approval of national regulatory authorities. 34. Transmission system operators shall not be entitled to refuse the connection of a new power plant on the grounds of possible future limitations to available network capacities, e.g. congestion in distant parts of the transmission grid. The transmission system operators shall be obliged to supply necessary information. 35. Transmission system operators shall not be entitled to refuse a new connection point on the sole ground that it will lead to additional costs linked with necessary capacity increase of grid elements in the close-up range to the connection point. VII. Regional cooperation 36. Member States choosing this path must place precise obligations on transmission system operators within a clearly defined time frame and progressively leading to the creation of a common regional dispatching centre responsible for security issues within six years after the entry into force of this Directive. 37. In case of a cooperation between several Member States at a regional level and following the joint request of these Member States, the Commission may designate a regional coordinator. 38. The regional coordinator shall promote, at a regional level, the cooperation of regulatory authorities and any other competent public authorities, network operators, power exchanges, grid users and market parties. In particular, the regional coordinator shall: (a) promote new efficient investments in interconnections. To this end, the regional coordinator shall assist transmission system operators by elaborating their regional interconnection plan and shall contribute to the coordination of their investments decisions and, where appropriate, of their open season procedure; (b) promote the efficient and safe use of the networks. To this end, the regional coordinator shall contribute to the coordination between transmission system operators, national regulatory authorities and other competent national public authorities with the elaboration of common allocation and common safeguard mechanisms; (c) annually submit a report to the Commission and Member States concerned on the progress achieved in the region and on any difficulty or obstacle that may hinder the progress. VIII. Sanctions 39. In order to carry out the duties assigned to it by this Article, the national regulatory authority: (i) shall have the right to request any information from the transmission system operator and to directly contact all staff of the transmission system operators; if doubts remain, the same rights shall apply for the vertically integrated undertaking and its subsidiaries; (ii) may conduct all necessary inspections of the transmission system operators and, if doubts remain, of the vertically integrated undertaking and its subsidiaries; the rules of Article 20 of Council Regulation (EC) No 1/2003 on the implementation of the rules on competition laid down in Articles 81 and 82 of the Treaty shall apply. 40. In order to carry out its duties assigned to it by this Article, the national regulatory authority shall have the power to impose effective, appropriate and dissuasive sanctions to the transmission system operator and/or the vertically integrated undertaking not complying with its obligations under this Article or any decisions of the national regulatory authority. This power shall include the right to: (i) impose effective, appropriate and dissuasive fines related to the turnover of the network company; (ii) issue orders to remedy a discriminatory behaviour; (iii) withdraw, at least partly, the licence of the transmission system operator in case of repeated breach of the unbundling provisions set out in this Article."

2008/04/11
Committee: ITRE

Norbert GLANTE, Robert GOEBBELS, Edit HERCZOG, Atanas PAPARIZOV, Anni PODIMATA, Bernhard RAPKAY, Hannes SWOBODA, Catherine TRAUTMANN

Proposal for a directive – amending act
Article 2 – paragraph 2 a (new)

2a. The Commission shall report to the European Parliament and the Council annually on the formal and practical implementation of this Directive in each Member State."

2008/03/19
Committee: ITRE

Norbert GLANTE, Robert GOEBBELS, Edit HERCZOG, Atanas PAPARIZOV, Anni PODIMATA, Bernhard RAPKAY, Hannes SWOBODA, Catherine TRAUTMANN

Proposal for a directive – amending act
Article 2 – paragraph 2 b (new)

2b. On the basis of public consultations and of discussions with the competent authorities and after having received an opinion by the Agency for the Cooperation of Energy Regulators, and six years following the entry into force of this Directive, the Commission shall report to the European Parliament and the Council on the desirability of maintaining or amending this Directive. The several versions of restructuring electricity companies laid down in Articles 8a to 8d, 10 and 10b of Directive 2003/54/EC shall be verified in particular in terms of the effectiveness of their impact on network access and the necessary investments.

2008/03/19
Committee: ITRE

22 Amendments of Bernhard RAPKAY related to 2007/0195(COD)

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