Agency for the Cooperation of Energy Regulators (ACER) is the European Union body created by the Third Energy Package to work towards the completion of a single EU energy market for electricity and natural gas (Internal Energy Market - IEM).
|
|
15 December 2021 Proposal for a Regulation of the European Parliament Parliament and of the Council on the internal markets for renewable and natural gases and for hydrogen (recast), COM/2021/804 final - amendments to the Regulation (EU) 2019/942 of the European Parliament and of the Council of 5 June 2019 establishing a European Union Agency for the Cooperation of Energy Regulators (Article 65)
|
The Agency was officially launched in March 2011 and is based in Ljubljana, Slovenia. As an independent European body the Agency ensures that market integration and the harmonisation of regulatory frameworks are achieved in accordance with the EU's energy policy objectives. The overall mission of the Agency is also to complement the work of national energy regulators at EU level, to assist them in exercising, at the European Union level, the regulatory tasks that they perform in the Member States and, where necessary, to coordinate their action.
According to the Regulation (EU) 2019/942 of the European Parliament and of the Council of 5 June 2019 establishing a European Union Agency for the Cooperation of Energy Regulators (the second ACER Regulation), the purpose of ACER is to assist the regulatory authorities referred to in Article 57 of Directive (EU) 2019/944 and Article 39 of Directive 2009/73/EC in exercising, at Union level, the regulatory tasks performed in the Member States and, where necessary, to coordinate their action and to mediate and settle disagreements between them.
ACER’s tasks also include to contribute to the establishment of high-quality common regulatory and supervisory practices, thus contributing to the consistent, efficient and effective application of European Union law in order to achieve the Union's climate and energy goals.
The second ACER Regulation clearly stipulates that ACER acts in interest of the European Union and take autonomous decisions, independently of private and corporate interests.
ACER's decision-making process
ACER itself sometimes indicates, the Agency's name "underlines its fundamental purpose of coordinating the actions of National Regulatory Authorities" (Joint ACER-CEER response to European Commission's Consultation on a new Energy Market Design of 7 October 2015, p. 23).
Proposal for a Directive of the European Parliament and of the Council on the internal market for electricity (recast) on common rules for the internal market in electricity (recast), 30.11.2016, COM(2016) 864 final 2016/0380 (COD), p. 23
Since energy markets are still largely regulated at national level, national regulators are actors with a key role for energy markets. The main role of ACER is not the execution of delegated regulatory Commission competencies, but the coordination of the regulatory decisions of independent national regulators.
Also Proposal for a Directive of the European Parliament and of the Council on the internal market for electricity (recast) on common rules for the internal market in electricity (recast), 30.11.2016, COM(2016) 864 final 2016/0380 (COD) observes that with the increasing cross-border trade and system operation which takes the regional and European context into account, the EU National Regulatory Authorities (NRAs) were required to increasingly coordinate their action with NRAs from other Member States. The said document of 30.11.2016 underlines ACER was designed to become the platform for this interaction and fulfils this duty since its creation in 2011.
The body within the Agency where most opinions, recommendations and decisions of the Agency are prepared, together with ACER staff, is the Board of Regulators comprising senior representatives of the NRAs and a non-voting representative of the Commission. Recital 26 to the Proposal for a Regulation of the European Parliament and of the Council establishing a European Union Agency for the Cooperation of Energy Regulators (recast), 30.11.2016, COM(2016) 863 final 2016/0378 (COD) stipulates that "without prejudice to its members' acting on behalf of their respective national authorities", the Board of Regulators is required to act independently from any market interest, avoid conflicts of interests and not seek or follow instructions or accept recommendations from a government of a Member State, from Union institutions or another public or private entity or person. ACER in its aforementioned document of 7.11.2015 refers to the fact that "[v]irtually all the legal acts of the Agency requiring a favourable opinion by the Board of Regulators have been agreed unanimously by NRAs' representatives in the Board."
According to Recitals 27 and 28 of the said Proposal of 30 November 2016 for a Regulation of the European Parliament and of the Council establishing a European Union Agency for the Cooperation of Energy Regulators where the ACER has decision-making powers, interested parties should, for reasons of procedural economy, be granted a right of appeal to a Board of Appeal, which should be part of the Agency, but independent from its administrative and regulatory structure. The decisions of the Board of Appeal are subject to appeal before the Court of Justice of the European Union.
The Agency should exercise its decision-making powers "in line with the principles of fair, transparent and reasonable decision-making".
The ACER Board of Appeal effectively uses its powers to craft the ACER's regulatory and legislative practices. The example for this are the motives for the Decision of the ACER Board of Appeal of 7 July 2022 (Case number: A-001-2022, Polskie Sieci Elektroenergetyczne S.A.(‘PSE’) vs President European Union Agency for the Cooperation of Energy Regulators (‘ACER’)) regarding the remittal to the competent body of ACER of Decision No 14/2021 on the long-term capacity calculation methodology of the Core capacity calculation region, for the adoption of a new decision, which read:
“While it is possible and natural for ACER to bring additional elements of interpretation of the Contested Decision during the procedures of its review, those additional elements must be closely linked to the Contested Decision and must ideally be traceable from the documented preparatory work. However, these elements may not go as far as to change the meaning of the Contested Decision. Furthermore, the addressees of a Contested Decision cannot be expected to examine the paraphernalia of a legal act. The addressees should be able to rely directly and without further study on its usual wording and meaning normally attributed to it. When the “wished for” interpretation does not flow from the Contested Decision by means of habitual methods of interpretation or it is even incompatible with it, as in the present case, such a decision cannot be remedied by the Board of Appeal”.
Conditions for the third-country participation in the ACER
Articles 13 and 14 of the Regulation (EC) No 713/2009 of the European Parliament and of the Council of 13 July 2009 establishing an Agency for the Cooperation of Energy Regulators (the first ACER Regulation) limit membership to ACER’s formal bodies, i.e. the Board of Regulators and the Administrative Board, to representatives from EU Member States. Article 31, however, also grants the possibility for participation of third countries in ACER, provided that:
1. the third country has concluded an agreement with the European Union (Article 31(1));
2. the third country has adopted and is applying the European Union law in the field of energy and, if relevant, in the fields of environment and competition (Article 31(1)); and
3. an institutional framework has been set up in the agreement referred to under (1) to specify, in particular, the nature, scope and procedural aspects of the involvement of the third country including provisions relating to financial contribution and to staff (Article 31(2)).
The European Commission in the letter of 25 March 2015 clarified that the Energy Community Treaty is to be considered an ‘agreement’ as referred to in Article 31(1); and that the assessment of a third country’s compliance with the second requirement of Article 31(1) is to be carried out by the European Commission with the support of the Secretariat being welcomed. The European Commission, however, in the said communication also stressed that the above requirements are only relevant for a third country’s participation in the Board of Regulator and the Administrative Board, whereas the criteria for and acceptance of their involvement in ACER Working Groups remain at the discretion of the Director of ACER.
|
LinksThe Director of ACER, in letters:
- of 26 November 2014 (ACER-AP-FG-ss-2014-647), and
- of 24 July 2015 (ACER-AP-FG-ss-2015-390),
expressed his intention to allow participation of National Regulatory Authorities from third countries “as long as their countries are assessed as being on track in meeting the requirements of Article 31 and there being an expectation that this will be achieved within a reasonable period of time (6 to 12 months)”.
ACER's tasks
The tasks, organisation and operation of the Agency were initially set out in the first ACER Regulation as well as in the other legal acts forming the Third Energy Package. Additional tasks were assigned to the Agency by:
- Commission Regulation (EU) No 838/2010 of 23 September 2010 on laying down guidelines relating to the inter-transmission system operator compensation mechanism and a common regulatory approach to transmission charging;
- Regulation (EU) No 1227/2011 on wholesale energy market integrity and transparency (REMIT); and
- Regulation (EU) No 347/2013 on guidelines for trans-European energy infrastructure (TEN-E Regulation).
The Agency plays a key role in promoting the integration and well-functioning of the EU markets in electricity and gas, as well as their transparency and integrity.
Recital 41 of the Proposal for a Regulation of the European Parliament and of the Council on the internal market for electricity (recast), 30.11.2016, COM(2016) 861 final 2016/0379 (COD)
Experience with the development and adoption of network codes has shown that it is useful to streamline the development procedure by clarifying that the Agency has the right to revise draft electricity network codes before submitting them to the Commission.
The Agency, according to the first ACER Regulation, in particular:
- complements and coordinates the work of National Regulatory Authorities (NRAs) in areas laid down in the legislation;
- participates in the creation of European network rules, by producing Framework Guidelines containing criteria and principles for the Network Codes to be developed by the European Network of Transmission System Operators for Electricity (ENTSO-E) and ENTSO-G;
- monitors the execution of the tasks of ENTSOs and regional cooperation of TSOs, and provides opinions on their relevant documents (annual work programme, community-wide TYNDP, supply outlooks, etc.);
- participates in the process for the identification of infrastructure Projects of Common Interest, by providing opinion on several methodological and procedural aspects;
- takes, under certain conditions, binding individual decisions on terms and conditions for access and operational security for cross border infrastructure, on exemptions and on cross-border cost allocation;
- gives advice on various energy related issues to the European institutions;
- monitors and reports on developments in the energy markets, and
- monitors trading in wholesale energy markets in order to detect and deter insider trading and market manipulation (Draft Outline of the 2016 ACER's Work Programme).
The monitoring of wholesale energy markets by the Agency are to be mainly based on the collection of data relating to the transactions executed and the orders placed on wholesale energy markets in the European Union (trading data), as well as on fundamental data, that is, data relating to the operational conditions of the energy systems in both the electricity and gas sectors. However, while the Agency, according to the first ACER Regulation, was assigned extensive monitoring responsibilities, it did not initially possess the corresponding powers to define and obtain the necessary information from National Regulatory Authorities, Transmission System Operators – and their European Networks - and other market stakeholders.
This was perceived as an inconsistency (ACER/CEER Annual Report on the Results of Monitoring the Internal Electricity and Natural Gas Markets in 2014, November 2015, p. 6). The situation in this regard has changed with the adoption of the second ACER Regulation) - see below.
A specific example of ACER's competencies is the CACM Regulation, according to which a number of binding subsidiary instruments to be adopted at a later stage, is entrusted to the NRAs. In the case of binding subsidiary instruments having a EU-wide scope of application, this requires NRAs to decide unanimously on the adoption of identical legal acts in all national legal systems within a six-month period, after which the responsibility is transferred to ACER.
Beyond that, ACER's advisory competences have included:
- providing opinions on the compliance of NRAs' decisions with the relevant legislation at the request of an NRA or of the European Commission (Article 7(4) of Regulation (EC) No 713/2009);
- providing opinions on the application of Guidelines referred to in Directive 2009/72/EC, Directive 2009/73/EC, Regulation (EC) No 714/2009 or Regulation (EC) No 715/2009 at the request of NRAs encountering difficulties with the application (Article 7(6) of Regulation (EC) No 713/2009);
- making recommendations, in accordance with its work programme or at the request of the Commission, to assist NRAs and market players in sharing good practices (Article 7(2) of Regulation (EC) No 713/2009).
This advisory activity plays an important role in ensuring the consistent application of the provisions contained in the EU energy acquis and in fostering the sharing of good practices, thus promoting a well-functioning EU Internal Electricity Market. As the aforementioned ACER-CEER document of 7 October 2015 suggests, this role of the Agency could be usefully enhanced by extending its opportunity to issue such opinions and recommendations not only at the request of the European Commission or of an NRA, but also on its own initiative (while NRAs would in this way lose the quasi-exclusivity of their role of initiative for these opinions and recommendations, they would still be involved in the process through their representation in the Board of Regulators, whose favourable opinion would be required for the adoption of these acts).
Oversight activity
The Rapporteur of the European Parliament’s Draft report of 14 June 2017 on the proposal for a regulation of the European Parliament and of the Council establishing a European Union Agency for the Cooperation of Energy Regulators (recast) (COM(2016)0863 – C8-0494/2016 – 2016/0378(COD)), Morten Helveg Petersen (Committee on Industry, Research and Energy (ITRE)) makes in the Explanatory Statement to the said document some interesting remarks on the evolution of the scope of the ACER’s oversight activity as well as on the ACER’s ability to obtain the information it requires to perform its monitoring function. According to the Rapporteur, the Agency’s oversight activity has, in the past, mainly focused on the ENTSOs, but has more recently been expanded to include the Nominated Electricity Market Operators (NEMOs). This scope, according to the ITRE’s proposal, should be further extended under the Regulation’s recast to cover also the Regional Coordination Centres (RCCs). In fact, these entities will have operational responsibilities, which make effective oversight even more relevant. Compliance of these entities with their obligations under the legislation must therefore be ensured.
Furthermore, effective oversight rests on the Agency having access and being able to require the necessary information. When the Agency detects that one of the ENTSOs, a NEMO, a RCC – or any other entity operating at cross-border, regional or EU-wide level, e.g. the future EU DSO Entity - does not comply with the objectives and the provisions in the Electricity Directive and Regulation and the Network Codes and Guidelines, thus jeopardising the well-functioning of the Internal Energy Market, the Agency should be able to intervene with a binding decision.ACER already had extensive monitoring responsibilities under the current Regulation 713/2009. These were further expanded by the proposal for a second ACER Regulation to cover also the performance of RCCs and NEMOs. However, these monitoring responsibilities were not matched by general powers to request and obtain the relevant information. Therefore, the Rapporteur of the aforementioned draft Report tabled amendments giving the Agency the power to request any information it required to effectively carry out its tasks from market participants and other entities, if necessary through binding decisions.
To avoid the duplication of reporting obligations for energy market participants, that information should normally be provided by the national regulatory authorities, the ENTSOs, ROCs, the EU DSO Entity and NEMOs, which are closest to the energy market participants and should take into account already existing statistics. However, as a last resort, the Agency should be able to address a duly justified and reasoned request for information directly to an energy market participant where a national regulatory authority does not or cannot provide such information in a timely fashion.
Member States’ national regulatory authorities should be obliged to assist the Agency in enforcing such direct requests.
Recital 14 of the Regulation (EU) 2019/942 of the European Parliament and of the Council of 5 June 2019 establishing a European Union Agency for the Cooperation of Energy Regulators reflects the said legislative evolution. It reads as follows:
“In order to ensure that ACER has the information it needs to carry out its tasks, ACER should be able to request and to receive that information from the regulatory authorities, the ENTSO for Electricity, the ENTSO for Gas, the regional coordination centres, the EU DSO entity, the transmission system operators and the nominated electricity market operators.“
|
Regulation (EU) 2019/942 of the European Parliament and of the Council of 5 June 2019 establishing a European Union Agency for the Cooperation of Energy Regulators
Recital 16 ACER provides an integrated framework which enables the regulatory authorities to participate and cooperate. That framework facilitates the uniform application of the legislation on the internal markets for electricity and natural gas throughout the Union. As regards situations concerning more than one Member State, ACER has been granted the power to adopt individual decisions. That power should, under clearly specified conditions, cover technical and regulatory issues which require regional coordination, in particular those concerning the implementation of network codes and guidelines, cooperation within regional coordination centres, the regulatory decisions necessary to effectively monitor wholesale energy market integrity and transparency, decisions concerning electricity and natural gas infrastructure that connects or that might connect at least two Member States and, as a last resort, exemptions from the internal market rules for new electricity interconnectors and new gas infrastructure located in more than one Member State.
Recital 18 ACER has an important role in developing framework guidelines which are non-binding by nature. Network codes should be in line with those framework guidelines. It is also considered to be appropriate for ACER, and consistent with its purpose, to have a role in reviewing and amending draft network codes to ensure that they are in line with the framework guidelines and provide for the necessary degree of harmonisation, before it submits them to the Commission for adoption
Recital 23 ACER should also be able to make recommendations to assist regulatory authorities and market participants in sharing good practices.
Recital 29
Article 2 ACER shall:
1. ACER may, upon a request of the European Parliament, the Council or the Commission, or on its own initiative, provide an opinion or a recommendation to the European Parliament, the Council and the Commission on any of the issues relating to the purpose for which it has been established. |
Regulation (EU) 2019/943 of the European Parliament and of the Council of 5 June 2019 on the internal market for electricity (recast), Recitals 61 - 62
(61) Increased cooperation and coordination among transmission system operators is required to create network codes for providing and managing effective and transparent access to the transmission networks across borders, and to ensure coordinated and sufficiently forward-looking planning and sound technical evolution of the transmission system in the Union, including the creation of interconnection capacities, with due regard to the environment. Those network codes should be in line with non-binding framework guidelines, which are developed by ACER. ACER should have a role in reviewing, based on matters of fact, draft network codes, including their compliance with those framework guidelines, and it should be enabled to recommend them for adoption by the Commission. ACER should assess proposed amendments to the network codes and it should be enabled to recommend them for adoption by the Commission. Transmission system operators should operate their networks in accordance with those network codes.
(62) Experience with the development and adoption of network codes has shown that it is useful to streamline the development procedure by clarifying that ACER has the right to revise draft electricity network codes before submitting them to the Commission.
Enforcement of the ACER’s decisions
The aforementioned ITRE’s Draft report of 14 June 2017 proposed to add a rule that the ACER may request the national regulatory authorities to ensure enforcement of its legally binding decisions (Article 6 paragraph 10a (new)). As a justification ITRE invokes an argument that once the ACER issues a binding decision, it needs to be implemented and, if necessary, penalties should be imposed in case of non-compliance. With respect to the latter, according to the ITRE, the ACER should rely on NRAs.
Regulatory chronicle
15 December 2021
Proposal for a Regulation of the European Parliament Parliament and of the Council on the internal markets for renewable and natural gases and for hydrogen (recast), COM/2021/804 final - amendments to the Regulation (EU) 2019/942 of the European Parliament and of the Council of 5 June 2019 establishing a European Union Agency for the Cooperation of Energy Regulators (Article 65)
14 June 2019
Regulation (EU) 2019/942 of the European Parliament and of the Council of 5 June 2019 establishing a European Union Agency for the Cooperation of Energy Regulators published in the EU Official Journal L 158, p. 22
11 June 2018
Council agrees position to update the role of the EU Agency for the Cooperation of Energy Regulators
5 June 2018
14 June 2017
30 November 2016
Documentation
Regulation (EU) 2019/942 of the European Parliament and of the Council of 5 June 2019 establishing a European Union Agency for the Cooperation of Energy Regulators (second ACER Regulation)
Regulation (EC) No 713/2009 of the European Parliament and of the Council of 13 July 2009 establishing an Agency for the Cooperation of Energy Regulators (first ACER Regulation)
Report from the Commission, Progress report on the implementation of the Common Approach on EU decentralised agencies, 24.4.2015 COM(2015) 179 final
Draft Outline of the 2016 ACER's Work Programme