Council adopts common positions on energy package reform

It was announced on 12 January 2009 that the Council has adopted common positions on the package of legislative reforms to the EU internal energy market. These common positions were reached based on the political agreement reached at the meeting of EU Energy Ministers in October 2008. The common positions will now be forwarded to the European Parliament for second reading.

The common positions reached, which have now been adopted are:

• a common position with a view to the adoption of a new Directive concerning common rules for the internal electricity market, and the repealing of Directive 2003/54/EC;
• a common position on the adoption of a new Regulation of the European Parliament and of the Council regarding conditions for access to the network for cross border exchanges in electricity, together with the repealing of Regulation 1228/2003;
• a common position on the adoption of a Regulation of the European Parliament and of the Council establishing an Agency for the Co-operation of Energy Regulators;
• a common position on the adoption of a new Regulation concerning the internal market in natural gas, together with the repeal of Directive 2003/55/EC; and
• a common position on the adoption of a Regulation of the European Parliament and the Council on conditions for access to the natural gas transmission networks, together with the repeal of Regulation 1775/2005.

The principal differences between the common positions adopted by the Council with the proposals of the Commission were:

• in addition to the full ownership unbundling and the Independent System Operator proposals of the Commission, the Council introduced a third option, an Independent Transmission Operator, for cases where a transmission system operator is part of a vertically integrated undertaking at the date of entry into force of the new Directives, with provisions to ensure the independent operation of the ITO;
• the full ownership unbundling proposals from the Commission have been slightly amended in the common positions such that a producer/supplier may hold a minority shareholding in a fully unbundled TSO, provided that it does not exert influence or control over the TSO. There will be a derogation from the unbundling provisions for smaller states such as Cyprus, Luxembourg and Malta;
• TSO's from third countries will be required to respect the unbundling provisions applicable to Community TSO's;
• new Council provisions will ensure that a single regulator at national level is compatible with systems in some member states which rely on regional regulators for small or isolated parts of their territory;
• the Council proposed that the new Agency for the Co-operation of Energy Regulators should be independent of the Commission and the member states. The Agency will focus on issues involving more than one member state. Their role will however, remain advisory.
• provision is made for a strong Regulatory Board composed of senior representatives of the national regulators and an Agency Director. Membership will rotate to allow fair member state representation.

All of the Council's amendments were accepted by the Commission and will now be forward to the European Parliament for a second reading. This is anticipated for April 2009, and will be considered under the co-decision procedure, which requires the agreement of both Parliament and Council to the Commission's proposals, and to any amendments that either the Parliament or Council make to them.

The new Czech Presidency of the EU has intimated that it considers these reforms one of its priorities and hopes to reach agreement on it during the term of the present European Parliament, by June 2009.