[ParlTrack]

Dominique VLASTO, Herbert REUL, Angelika NIEBLER, Paul RÜBIG, Nicole FONTAINE, Catherine TRAUTMANN, Ján HUDACKÝ

Proposal for a directive – amending act
Recital 4

(4) The Communication of the Commission of 10 January 2007 entitled "An Energy Policy for Europe" highlighted the importance of completing the internal market in natural gas and of creating a level playing field for all gas companies established in the Community. The Internal Energy Market Communication ~~and the final Report on the Competition Sectoral Enquiry~~ showed that the present rules and measures do not provide the necessary framework for achieving the objective of a well functioning internal market. On the other hand, the final Report on the Competition Sectoral Enquiry and the impact assessment produced to support the third legislative package on the internal energy market provided no convincing evidence that made it possible to establish the best or only way to improve the way that market works.

2008/04/07
Committee: ITRE

Dominique VLASTO, Herbert REUL, Angelika NIEBLER, Paul RÜBIG, Nicole FONTAINE, Catherine TRAUTMANN, Ján HUDACKÝ

Proposal for a directive – amending act
Recital 5

(5) Without effective separation of networks from activities of production and supply, there is an inherent risk of discrimination not only in the operation of the network but also in the incentives for ~~vertically integrated~~ companies to invest adequately in their networks. The main motivation for investing is the remuneration received by the operator. Should the national regulatory authority set a low level of remuneration, this would lead to a decrease in investment. On the other hand, should it set a fair and proportionate level of remuneration, ensuring that revenue covers costs and pays off such investment, it would automatically generate an increase in investment, regardless of whether the network operator belongs to an integrated group. Therefore, the primary major determining factor for investment resides in pricing regulation and in the role and powers of the national regulatory authorities, which should be reinforced in order to complete the internal market to the benefit of the consumer.

2008/04/07
Committee: ITRE

Dominique VLASTO, Herbert REUL, Angelika NIEBLER, Paul RÜBIG, Nicole FONTAINE, Catherine TRAUTMANN, Ján HUDACKÝ

Proposal for a directive – amending act
Recital 7

(7) ~~Only t~~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 effective and stabl~~one way to solve the inherent conflict of interest ~~and to ensure security of supply. For this reason, t~~. The European Parliament, in its Rresolution 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, , considered moreover that the application of further unbundling measures for the gas sector is not straightforward, and therefore urged the development of specific solutions to enable this sector to achieve the completion of the internal gas market, taking into account~~rol over a transmission system operator should preclude the possibility of holding any interest in or exercising any right over a supply undertaking~~ the differences between the upstream and downstream markets.

2008/04/07
Committee: ITRE

Dominique VLASTO, Herbert REUL, Angelika NIEBLER, Paul RÜBIG, Nicole FONTAINE, Catherine TRAUTMANN, Ján HUDACKÝ

Proposal for a directive – amending act
Recital 8 a (new)

(8a) Member States that so wish may apply the provisions of this Directive relating to the effective and efficient separation of transmission systems and transmission system operators. This is effective because it helps ensure the independence of transmission system operators. It is efficient because it provides a more appropriate regulatory framework to guarantee fair competition, sufficient investment, access for new entrants and the integration of natural gas markets. It is based on a pillar of organisational measures and measures relating to the governance of transmission system operators and on a pillar of measures relating to investment, connecting new production capacities to the network and market integration through regional cooperation. It is in line with the requirements laid down by the European Council at its meeting in Brussels on 8 and 9 March 2007.

2008/04/07
Committee: ITRE

Dominique VLASTO, Herbert REUL, Angelika NIEBLER, Paul RÜBIG, Nicole FONTAINE, Catherine TRAUTMANN, Ján HUDACKÝ

Proposal for a directive – amending act
Recital 10

(10) The setting up of system operators independent from supply and production interests should enable vertically integrated companies to maintain their ownership of network assets whilst ensuring an effective separation of interests, provided that the independent system operator performs all the functions of a network operator or efficient and effective unbundling is implemented and detailed regulation and extensive regulatory control mechanisms are put in place.

2008/04/07
Committee: ITRE

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

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

(10a) In complying with the regulations on effective and efficient legal unbundling, and provided that the network undertaking performs all the functions of the network operator and detailed regulation and extensive regulatory control mechanisms are put in place, vertically integrated undertakings may maintain their ownership of network assets whilst at the same time ensuring an effective separation of interests.

2008/04/07
Committee: ITRE

Dominique VLASTO, Herbert REUL, Angelika NIEBLER, Paul RÜBIG, Nicole FONTAINE, Catherine TRAUTMANN, Ján HUDACKÝ

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,~~, effective and efficient unbundling of transmission systems and of transmission system operators, and setting up system operators which are independent from supply and generation interests. 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

Bernhard RAPKAY, Hannes SWOBODA, Norbert GLANTE, Robert GOEBBELS, Atanas PAPARIZOV, Anni PODIMATA, 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.

2008/04/07
Committee: ITRE

Dominique VLASTO, Herbert REUL, Angelika NIEBLER, Paul RÜBIG, Nicole FONTAINE, Catherine TRAUTMANN, Ján HUDACKÝ

Proposal for a directive – amending act
Recital 25

(25) In view of the creation of an internal market for electricity, Member States should foster the integration of their national markets and the cooperation of network operators at European and regional level. Regional integration initiatives are an essential intermediate step in achieving European integration of energy markets, which remains the final objective. The regional level contributes towards accelerating the integration process by making it possible for the actors concerned, particularly the Member States, the national regulatory authorities and the transmission system operators, to cooperate on specific issues.

2008/04/07
Committee: ITRE

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

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) and Article 9 or with the provisions of Article 9b."

2008/04/10
Committee: ITRE

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

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

Directive 2003/55/EC
Article 9 b (new)

(8a) The following Article shall be inserted: "Article 9b 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 gas transmission, in particular: (i) transmission system operators shall own assets that are 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) appropriate financial resources for future investment projects shall be made available in the annual finance plan. The activities deemed necessary for the regular business of gas transmission mentioned in this paragraph shall include at least: – representation of the transmission system operator and contacts with third parties and the national regulatory authorities, – granting and managing third party access to the network, especially the access for new market operators and producers of biogas, – collection of the access charges, congestion rents and payments under the inter transmission system operator compensation mechanism in compliance with Article 7 of Regulation (EC) No 1775/2005, – 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. The sharing of the staff 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 operator's 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's 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 on conclusion or early termination of 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 the notification, the national regulatory authority has not used its right of veto. A veto may be used if an appointment and conclusion of the respective agreement poses serious doubts as to the professional independence of the nominated chief executive officer / 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 if serious doubts exist regarding the basis and justification of such early termination. 8. Rights of appeal to the national regulatory authority or to a court shall be guaranteed to the members of the management of the transmission system operator regarding early terminations of their employment. 9. The national regulatory authority shall decide on such appeal within six months. This time period may be exceed only in exceptional and duly justified cases. 10. After the termination of employment in the transmission system operator, 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. 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. 12. 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. 13. Without prejudice to the provisions above, the transmission system operator shall have all 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 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 also include independent members, appointed for at least 5 years. Appointment of the members of the supervisory board / board of directors shall be notified to the national regulatory authority and become binding under the conditions referred to in paragraph 7. 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/she does not participate in any business with, or has no other relationship with, the vertically integrated undertaking, its controlling shareholders or the management of either, which 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 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. This programme shall set out the specific obligations of employees of the transmission system operator to meet this objective. The programme shall be subject to approval of the regulatory authority. Compliance of the program by the transmission system operators 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 a detailed annual report, setting out the measures to be 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 national regulatory authority; (iii) issuing recommendations regarding the compliance programme and its implementation. 19. The independence of the compliance officer shall be guaranteed in particular by terms of the 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 regulatory authorities. 21. 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 7 of Regulation (EC) No 1775/2005; (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 generators or suppliers 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 the assigned tasks. 24. The compliance officer shall be nominated and removed by the chief executive officer / executive board only after the prior approval by the national regulatory authority. 25. Following revocation of the mandate of the compliance officer, 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 draw up a 10-year network development plan at least every two years. They shall take 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 elaborate 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 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 national regulatory authority. 29. The national regulatory authority shall consult the draft plan with all relevant network users in an open and transparent manner and may publish the result of such consultation, in particular possible needs for investments. 30. The national regulatory authority shall examine whether the draft 10-year network development plan covers all investment needs identified in the consultation. The national regulatory authority may oblige the transmission system operator to amend his plan. 31. If the transmission system operator rejects to implement a specific investment listed in the 10-year network development plan in the next three years, Member States shall ensure that the national regulatory authority has the power to take one of the following measures: (a) to request, by all legal means, the transmission system operator to execute its investment obligations by using its financial capacities, or, (b) to invite independent investors to tender for the necessary investment in the transmission system and may, at the same time, 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 accept a capital increase to finance the necessary investments and allow independent investors to participate in the capital increase. 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 access of third parties to the transmission grid 33. Transmission system operators shall be required to establish and publish transparent and efficient procedures for non-discriminatory access of third parties to the network. Those procedures shall be subject to the approval of national regulatory authorities. 34. Transmission system operators shall not be entitled to refuse third parties access to the network on the grounds of possible future limitations to available network capacities, e.g. congestion in distant parts of the transmission network. The transmission system operator shall supply the necessary information. 35. Transmission system operators shall not be entitled to refuse a new access to the network on the sole ground that it would 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 which decide to cooperate on a regional level, shall 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 of entry into force of Directive .../.../EC [amending Directive 2003/55/EC concerning common rules for the internal market in natural gas]. 37. If the cooperation between several Member States at a regional level encounters difficulties, 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 in preparation of 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 while elaborating 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. VIII. Sanctions 39. In order to carry out the tasks assigned to it by this Article, the national regulatory authority: (i) shall be empowered to request any information from the transmission system operator and to directly contact all staff of the transmission system operator; if doubts remain, the national regulatory authority shall have the same power towards the vertically integrated undertaking and its subsidiaries; (ii) may conduct all necessary inspections of the transmission system operator and, if doubts remain, of the vertically integrated undertaking and its subsidiaries; 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 Treaty1 shall apply. 40. In order to carry out its tasks 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 to the vertically integrated undertaking not complying with their 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, partly or in full, the licence of the transmission system operator in case it repeatedly breaches the unbundling provisions set out in this Article." 1 OJ L 1, 4.1.2003, p. 1.

2008/04/10
Committee: ITRE

Bernhard RAPKAY, Hannes SWOBODA, Norbert GLANTE, Robert GOEBBELS, Atanas PAPARIZOV, Anni PODIMATA, 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.

2008/03/31
Committee: ITRE

12 Amendments of Catherine TRAUTMANN related to 2007/0196(COD)

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