[ParlTrack]

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, or effective and efficient unbundling which ensures effective separation of the transmission system operator without infringing ownership of network and without causing the sale of either the transmission system or the production of energy. 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.

2008/04/07
Committee: ITRE

Nikolaos VAKALIS

Proposal for a directive – amending act
Recital 19

(19) Energy regulators should have the power to issue binding decisions on gas undertakings and to impose effective, appropriate and dissuasive sanctions on natural gas undertakings which fail to comply with their obligations. They must also be granted the powers to decide, irrespective of the application of competition rules, on any appropriate measures ensuring customer benefits through the promotingon of effective competition necessary for the proper functioning of the market; as well as to ensure high standards of public service in compliance with market opening, the protection of vulnerable customers and that consumer protection measures are fully effective. These provisions should be without prejudice to both the Commission's powers concerning the application of competition rules including the examination of mergers with a Community dimension, and the rules on the internal market, such as the free movement of capital.

2008/04/07
Committee: ITRE

Nikolaos VAKALIS

Proposal for a directive – amending act
Recital 20

(20) Investments in major new infrastructures should be strongly promoted while ensuring the proper functioning of the internal market in natural gas. In order to enhance the positive effect of exempted infrastructure projects on competition and security of supply, market interest during the project planning phase should be tested and congestion management rules should be implemented. Where an infrastructure is located in the territory of more than one Member State, the ~~Agency for the Cooperation of Energy Regulators should handle the exemption request in order to take better account of its cross-border implications and to facilitate its administrative handling~~exemption decision should be taken by the regulatory authorities or any relevant bodies of the Member States concerned after consultation between them, and approved by the Commission. Moreover, given the exceptional risk profile of constructing these exempt major infrastructure projects it should be possible to temporarily grant partial derogations to supply and production undertakings in respect of the unbundling rules for the projects concerned. This should in particular apply, for security of supply reasons, to new pipelines within the Community transporting gas from third countries into the Community.

2008/04/07
Committee: ITRE

Nikolaos VAKALIS

Proposal for a directive – amending act
Recital 26

(26) Regulatory authorities should provide information to the market also to permit the Commission to exercise its role of observing and monitoring the European gas market and its short, medium and long term evolution, including aspects such as supply and demand, transmission and distribution infrastructures, ~~cross-border trade~~quality of service and supply, cross-border trade, congestion management, investments, wholesale and consumers prices, market liquidity, environmental and efficiency improvements.

2008/04/07
Committee: ITRE

Nikolaos VAKALIS

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

Directive 2003/55/EC
Article 2 – point 3

(–a) point 3 shall be replaced by the following: “3. ‘transmission’ means the transport of natural gas through a [...]network containing mainly high pressure pipelines, other than an upstream pipeline network and other than the part of high pressure pipelines primarily used in the context of local distribution of natural gas, with a view to its delivery to customers, but not including supply;"

2008/04/07
Committee: ITRE

Herbert REUL, Nikolaos VAKALIS, Vladimir URUTCHEV, Nicole FONTAINE, Angelika NIEBLER, Ján HUDACKÝ, Dominique VLASTO, Werner LANGEN, Paul RÜBIG

Proposal for a directive – amending act
Article 1 – point 3

Directive 2003/55/EC
Article 5b

1. Member States shall cooperate among themselves for the purpose of integrating their national markets at least at the regional level. In particular, Member States shall promote the cooperation of network operators at a regional level, and foster the consistency of their legal and regulatory framework. ~~The geographical~~2. When the cooperation between several Member States at a regional level encounters significant difficulties, following the joint request of these Member States, the Commission may designate, in agreaement with all Member States covncerned by, a regional coo~~perations shall be in line with the definition of geographical areas by the Commission in accordance with Article 2h(3) of Regulation (EC) No 1775/2005.~~ rdinator. 3. The regional coordinator shall promote at regional level the cooperation of national regulatory authorities and other competent public authorities, network operators, gas 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 in drawing up 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 in drawing up their common allocation and common safeguard mechanisms; (c) submit an annual report to the Commission and Member States concerned on the progress achieved in the region and on any difficulty or obstacle that may hinder such progress.

2008/04/10
Committee: ITRE

Nikolaos VAKALIS, Vladimir URUTCHEV, Nicole FONTAINE, Angelika NIEBLER, Ján HUDACKÝ, Dominique VLASTO, Werner LANGEN, Herbert REUL, Paul RÜBIG

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

Directive 2003/55/EC
Article 7 – paragraph –1 (new)

"–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 must comply with the provisions of Article 7(1)(a) to (d) or Article 9 or Article 9b."

2008/04/10
Committee: ITRE

Nikolaos VAKALIS, Vladimir URUTCHEV, Nicole FONTAINE, Angelika NIEBLER, Ján HUDACKÝ, Dominique VLASTO, Werner LANGEN, Herbert REUL, Paul RÜBIG

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

Directive 2003/55/EC
Article 8 – paragraphs 4 a to 4 h (new)

(6c) In Article 8, the following paragraphs shall be added: "4a. Transmission system operators shall draw up a 10-year network development plan at least every two years. They shall take efficient measures to guarantee system adequacy and security of supply. 4b. 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 upon and identify new investments for which an implementation decision has to be taken in the next three years. 4c. In order to draw up this 10-year network development plan, each transmission system operator shall make a hypothesis about the evolution of generation, consumption and exchanges with other countries, and shall 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 competent national body. 4d. The competent national body shall consult the draft with all relevant network users in an open and transparent way, and may publish the result of such consultation, in particular possible investment need. 4e. The competent national body shall examine whether the draft 10-year network development plan covers all investment needs identified during the consultation. The competent national body may require the transmission system operator to amend this plan. 4f. The competent national body within the meaning of paragraphs 4c, 4d and 4e, may be the national regulatory authority, any other competent national public authority or a network development trustee established by transmission system operators. In the latter case, transmission system operators shall submit the drafts of their statutes, a list of their members and their rules of procedure to the competent national public authority for its approval. 4g. If the transmission system operator fails to implement a specific investment listed in the 10-year network development plan within the subsequent three years, Members States shall ensure that the national regulatory authority or any other competent national public authority has the necessary powers to take one of the following measures: a) to request, by all legal means, the transmission system operator to fulfil its investment obligations using its financial capacities, or, b) to invite independent investors to tender for the 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 and – to operate the respective new asset. The relevant financial arrangements shall be subject to the approval of the national regulatory authority or any other competent national authority. In both cases, tariff regulation shall allow for revenues that cover the costs of such investments. 4h. The competent national public authority shall monitor and evaluate the implementation of the investment plan.

2008/04/10
Committee: ITRE

Herbert REUL, Nikolaos VAKALIS, Vladimir URUTCHEV, Nicole FONTAINE, Angelika NIEBLER, Ján HUDACKÝ, Dominique VLASTO, Werner LANGEN, Paul RÜBIG

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

Directive 2003/55/EC
Article 8 a (new)

(6d) The following Article shall be inserted: "Article 8a Effective and efficient 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 gas transmission, in particular: (i) transmission system operators shall own assets necessary for the regular business of gas transmission; (ii) transmission system operators shall employ the staff necessary for the regular business of gas transmission; (iii) the sharing of the staff and the provision of services between branches of a vertically integrated undertaking performing functions of generation or supply shall be limited to cases where there is no possibility of discrimination and shall be subject to approval by national regulatory authorities in order to exclude competition concerns and conflicts of interest; (iv) appropriate financial resources for future investment projects shall be made available in due time. 2. The activities deemed necessary for the regular business of gas transmission mentioned in paragraph 1 shall include at least the following: – representation of the transmission system operator and contacts with third parties and national regulatory authorities, – granting and managing third party access to the network, – 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, – 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. 3. Transmission system operators shall have the legal form of a joint-stock company. 4. The transmission system operator shall have its own corporate identity, significantly different from the vertically integrated undertaking, with separate branding, communication and premises. 5. Transmission system operators' accounts shall be audited by an auditor other than the person auditing the vertically integrated undertaking and all its affiliated companies. II. Independence of the transmission system operator's management, chief executive officer / executive board 6. Decisions on the appointment and on any early termination of the employment of the chief executive officer or members of the executive board of the transmission system operator and decisions on the conclusion or early termination of the employment contracts with these persons shall be notified to the national regulatory authority or any other competent national public authority. These decisions and agreements may become binding only if, within a period of 3 weeks following the notification, the regulatory authority or any other competent national public authority has not used its right of veto. A veto may be used if an appointment and the conclusion of the relevant agreement poses serious doubts as to the professional independence of the nominated chief executive officer or a member of the executive board; in the case of early terminations of employment and of respective agreements with these persons, the right of veto may be used only if serious doubts exist regarding the basis and justification of such termination. 7. Right of appeal to the national regulatory authority or another competent national public authority or to a court shall be guaranteed to the management of the transmission system operator in the event of early terminations of their employment. 8. After termination of employment in the transmission system operator, the 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. 9. 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. Remuneration of the chief executive officer / members of the executive board shall in no part depend on activities of the vertically integrated undertaking other than those of the transmission system operator. 10. The chief executive officer or the members of the executive board of the transmission system operator may not be responsible, directly or indirectly, for the day-to-day operation of any other branch of the vertically integrated undertaking. 11. Without prejudice to the provisions above, the transmission system operator shall have effective decision-making rights, independent from the integrated gas 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 economic and management supervision rights of the parent company in respect of return on assets, regulated indirectly in accordance with Article 24c, in a subsidiary are protected. In particular, this shall enable the parent company to approve the annual financial plan, or any equivalent instrument, of the transmission system operator and 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 12. Chairmen of the supervisory board/board of directors of the transmission system operator shall not participate in any branch of the vertically integrated undertaking performing functions of generation or supply. 13. The supervisory boards / boards of directors of transmission system operators shall also include independent members, appointed for a term of at least 5 years. Appointment of the members of the supervisory board / board of directors shall be notified to the national regulatory authority/ or any other competent national public authority and become binding under the conditions described in paragraph 6. 14. For the purpose of paragraph 13, a member of the supervisory board / board of directors of a transmission system operator shall be deemed independent if he/she does not participate in any business with, or is no other relationship with the vertically integrated undertaking, its controlling shareholders or the management of either, that would create 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 the appointment as a member of the supervisory board / board of directors; (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 have any relevant business relationship with any branch of the vertically integrated company performing functions of energy supply during his/her appointment as a member of the supervisory board / board of directors; (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 15. 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 operators to meet this objective. The programme shall be subject to the approval of the national regulatory authority or any other competent national public 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. 16. 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) preparing an annual report, setting out the measures to be taken in order to implement the compliance programme and submitting it to the national regulatory authority; (iii) issuing recommendations regarding the compliance programme and its implementation. 17. The independence of the compliance officer shall be guaranteed in particular by the terms of the relevant employment contract. 18. The compliance officer shall have the opportunity to regularly address the supervisory board/board of directors of the transmission system operator, of the vertically integrated undertaking and the national regulatory authorities. 19. The compliance officer shall attend all meetings of the supervisory board / board of directors of the transmission system operator that address the following areas: (i) conditions for access and connection to the system, 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) energy purchases in order to cover energy losses. 20. During these meetings, the compliance officer shall prevent information about generators or suppliers activities which may be commercially advantageous from being disclosed in a discriminatory manner to the supervisory board/board of directors. 21. 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 the tasks. The compliance officer shall be nominated and removed by the chief executive officer / executive board only after prior approval by the national regulatory authority."

2008/04/10
Committee: ITRE

Nikolaos VAKALIS

Proposal for a directive – amending act
Article 1 – point 13

Directive 2003/55/EC
Article 22 – paragraph 3 – subparagraph 1

3. The regulatory authority referred to in Chapter VIa may, on a case by case basis, decide on the exemptions referred to in paragraphs 1 and 2. Where the infrastructure in question is located in the territory of more than one Member State, the ~~Agency shall exercise the task~~exemption decision shall be taken by the national regulatory authorities or any other competent bodies of the Member States confcerrned ~~on the regulatory authority by the pre~~after consultation between them, and approved by the Commission, according to the procedure sent ~~Article~~out in paragraphs 4 and 5.

2008/03/31
Committee: ITRE

Nikolaos VAKALIS