European system of energy regulation proposed

Brussels, Belgium — (METERING.COM) — June 8, 2007 – A European System of Regulation (ESER), rather than a single regulator, is among proposals put forward by the Council for European Energy Regulators (ERGEG) to advance energy regulation across Europe.

According to ERGEG there is a “regulatory gap” in Europe, with EU legislation not always being implemented at the national level in the spirit of the law, as the powers and independence of national energy regulators differ widely, and moreover some issues are cross-border in nature. The proposed ESER, which would fill this “gap”, would comprise a Regulators’ Council – involving the heads of the energy national regulatory authorities of the member states – as the primary regulatory decision-making body, and the national regulatory authorities, which would continue to undertake their tasks at the national level.

The role of the Regulator’s Council would be to oversee the public interest objective of promoting competitive single EU gas and electricity markets and its responsibilities would include approving security and operation standards and investment plans, among other functions that can only be performed at a European level, while the national authorities would be leveled up and their powers harmonized.

The purpose of this new regulatory system would be to create the stable and coherent climate for investment in an efficient integrated European grid, i.e. a “network of networks”, and to deliver open and competitive single European markets in gas and electricity.

In a statement the ERGEG says that one of the keys to facilitating investment is the development of a stable regulatory framework, whereby efficient investment is overseen by independent regulators who protect the public interest objective and promote competition. “Much needed investment is a key driver for regulatory reform. Investment is needed to better integrate the networks because well integrated European networks in electricity and gas are prerequisites for competitive energy markets, for security of supply and for connecting future generation.”

The ERGEG also recommends, as a second key to facilitating investment, that there should be ownership unbundling at the transmission system operator level in both electricity and gas, and says new legislation is needed urgently to address these issues.