Kajtár Takács Hegymegi-Barakonyi Baker & McKenzie Ügyvédi Iroda is a member of Baker & McKenzie International, a Swiss Verein. RECENT LEGISLATIVE DEVELOPMENTS AND PROSPECTIVE CHALLENGES OF HUNGARIAN ENERGY LAW Legislative Developments The area of Hungarian domestic energy law went through various important changes as several significant legislative amendments entered into force by the end of 2014. In light of the nature of these changes, it is essential for industry participants to become familiar with them. Laws on electricity and natural gas supply were amended and the legislator introduced strict requirements relating to organizations certifying IT systems used by energy market participants for the issuance of invoices. These certifying organizations are required to meet new minimum requirements: they must be accredited for a minimum of 3 consecutive years, have at least three references, have at least 2 adequately educated / trained professionals with at least 2 years of certification experience, and they must obtain a so-called security certificate for their branch offices (if any). According to market information, it is likely that only a few organizations are capable of meeting the new requirements. Industry participants may be concerned that an invoice issued from a system that has not been properly certified shall be deemed invalid as of 28 February 2015 or 30 June 2015 depending the number of invoices to be issued by the respective industry participant. The amendment of the Act on uniform image of invoices of public service providers also entered into force, which introduced smaller technical changes relating to mandatory content requirements of the invoices issued by public service providers. The aim of this amendment is to facilitate the easier identification of the invoices and to assist in the provision of a wider range of information. Industry participants are obliged to harmonize their billing practices with the new requirements, as failure to comply could result in serious sanctions against infringers. The so-called network access fee is also affected by the new regulatory developments. Under the previous regime, a two-tier regulatory system applied to the network access fee and regulatory competence was divided between the competent minister and the president of the Hungarian Energy and Public Utility Regulatory Authority (HEPURA), which made regulatory transparency quite problematic. The legislator, in order to remedy this situation, discontinued the two-tier regulatory system, and the network access fee is now determined by a single decree issued by the president of the HEPURA. In addition, the licenses issued pursuant to the Act on natural gas supply have been also amended so that the property right over natural gas stored in natural gas storage operated as a public customs warehouse may now be freely transferred and no natural gas-trading license or limited natural gas-trading license is required for this purpose. Prospective Challenges The Hungarian energy market is facing major changes in the short and mid-term, and this presumably will result in the subsequent modifications of energy laws. 2 Hungarian Government Stepping in the Market On the domestic level, it is significant that the Hungarian Government intends to establish a national utility holding company in 2015. A recently published Government Decree appears to support this intention as it calls upon the Minister leading the Prime Minister's Office to examine the options the Hungarian Government has to enter the electric supply and district heating market (as a universal service provider). The Minister, in accordance with the requirements of the national public utility system, is obliged to introduce to the Hungarian Government a proposal, containing the most viable options. EU regulatory developments In the medium term, from the Hungarian energy market perspective, it will certainly be of great importance that the European Counsel recently approved the policy framework for climate and energy up to 2030 proposed by the European Commission (describing concrete goals in relation to the reduction of greenhouse gas emissions and the increase of the ratio of the use of renewable energy) and adopted implementing regulation on so-called REMIT data reporting requirements prescribed by Regulation (EU) No 1227/2011 of the European Parliament and of the Council on wholesale energy market integrity and transparency by the European Commission.