The Original Proposals by the Commission

The European Commission originally proposed creating two bodies, the European Network of Transmission System Operators for electricity (ENTSOE) and for gas (ENTSOG), with a view to these overseeing and combining the work of the various energy providers. Both were to have the power to adopt:

  • Network codes on:
  1. security rules, including interoperability rules and procedures for emergency situations;
  2. grid connection and access rules;
  3. cross-border capacity allocation and congestion management rules;
  4. network-related transparency rules;
  5. energy efficiency rules;
  • a 10 year investment plan;
  • an annual work programme;
  • research plans.

The European Regulatory Energy Agency/Agency for the Cooperation of Energy Regulators would itself then only have monitored and reviewed these two bodies in an advisory capacity. 

Alterations proposed by MEPs

The European Parliament's Industry Committee's opinion differed from that of the European Commission in that they felt that the Agency should have regulatory powers. MEPs agreed with the motion on regulatory powers by a large majority, 575 in favour, and only 34 against. Parliament believes that the Agency should be handed decision-making powers over the investment plans and network codes developed by the ENTSOs.

Further to this, the European Parliament proposes that the Agency should be subject to a vote of approval by and be accountable to the Parliament and that the Agency should have its seat in Brussels. It should also have a greater say in determining important issues to the development of the internal Energy market.

The main tasks of the proposed Agency would be:

  1. Providing a framework for national regulators to cooperate

The framework is intended to improve the handling of cross-border situations. The Agency will lay down procedures for cooperation between national regulators, for example when more than one Member State is involved the Agency will ensure the appropriate exchange of information and apportionment of competences. The framework structure should also promote regional cooperation between national regulators;

      2.   Regulatory oversight of the cooperation between transmission system operators

The Agency will have responsibility for monitoring and reviewing the activities of ENTSOE and ENTSOG. In particular, it will be involved in the setting of priorities through the Networks' work programme, in the review of their 10-year investment plan, and in the preparation of technical and market codes. The review of the investment plan is without prejudice to the transmission system operators’ liability for technical failures as defined under national law. As regards the technical and market codes, the Agency will require transmission system operators to modify their drafts or to tackle more specific issues in detail. It will also be able to recommend that the Commission make these codes legally binding where voluntary implementation by transmission system operators proves to be insufficient or not suited to certain circumstances. The Agency may recommend modifying the transmission operators' draft or recommend additional provisions to the Commission; in practice, this mechanism will take the form of a constructive and continuous dialogue between the Agency, Transmission System Operators and the European Commission. The involvement of the Agency will be the key to ensuring that cooperation among Transmission System Operators proceeds in an efficient and transparent way to the benefit of the internal market;

      3.   Individual decision making powers

With regard to specific cross-border issues, the Agency would have powers relating to Exemption 5 requests, to decide on the regulatory regime applicable to infrastructure within the territory of more than one Member State where the matter concerns infrastructure assets of European interest. The Agency would also be able to take specific decisions on individual technical issues, but only when they have been granted these decision making powers under specific Guidelines adopted pursuant to the Gas and Electricity Directives; and

     4.   General advisory role

The Agency would have a general advisory role, along with the Commission, regarding market regulation issues. It would have the power to issue good practice guidelines to national regulators. It would also have the power to review, on a case-by-case basis, any decisions taken by a national regulatory authority regarding implementation of the EU gas and electricity Directives as directly impact on the internal market. The Agency would then provide an opinion on this to the Commission.

The Commission would be able to adopt Guidelines to further specify and define the role of Agency, and have three main methods for ensuring it's power over the Agency:

  • any decision taken by the Agency would only be binding for specific technical circumstances that were explicitly foreseen in the Regulations and Directives or provided for by binding Guidelines on a case by case scenario – outside of this, the Agency would have no political discretion;
  • the Commission may take any necessary action to solve a situation whereby it is informed by the Agency that National Regulatory Agencies' decisions or cooperation by Transmission System Operators jeopardises the effective competition and the effective running of the market – the Commission may also choose to act on its own initiative; and
  • the Agency may not make substantive decisions, it may prepare and advise the Commission only, with the decision being taken by the Commission.

The View of the European Economic and Social Committee

The European Economic and Social Committee (EESC) supports swift implementation of the single Energy market. They say the proposed Agency should be given more power to act and national regulators should become more independent from their governments. They also promote the representation of businesses, consumers and workers on the board of the proposed Agency and better coordination of national network operators.