unbundling: status and consequences

Unbundling: Status and Consequences

Bernhard Painz,

Head of Gas Department, E-Control

2

Agenda

• Liberalization of Energy Markets / Unbundling

• Distribution System Operator (DSO)

• New Corporate Identity

• Transmission System Operator (TSO)

• Cases

• Consequences

• Penalties / Offences

20140314, Vienna Vienna Forum on Energy Law

Liberalization of Energy Markets

Unbundling

3

(Un-)Bundling?

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Unbundling!

Before Liberalization:

• All from one source

• One undertaking

• Vertically Integrated

Undertaking (VIU)

After Liberalization in 2001:

• Supplier = selectable

• TSO/DSO

– Monopolist

– Independent Prod./Supply

5

Grid (transmission and

distribution system operator

TSO/DSO)

Production

Supply

VIU


Unbundling for DSO

6

7

Unbundling: DSO (Art 26)

• Legal Unbundling

Independent legal body

• Functional Unbundling

– Effective decision making rights

– Independent

– Necessary human, technical, physical, financial resources

(3rd Package!)

– Separate corporate identity (3rd Package!)

– Fully independent compliance officer

• Unbundling of Accounts

– Separate accounts

– No cross-subsidies20140314, Vienna Vienna Forum on Energy Law

New Corporate Identity

(DSO and ITO)

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New Corporate Identity

• Art 17, 26 Directive 2009/72/EC, 2009/73/EC

„shall not […] create confusion“

• Criteria: Trade Mark Law

- Company name

- Company Logo

- Color of the brand

- Etc.

No possibility of confusion !!!!

Average customer !!!!


Cases

• ITO / TSO:

• DSO:

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Unbundling for TSO

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Unbundling: TSO (Art 9)

• From 3. 3. 2012

• 4 Options:

– Ownership Unbundling

– ISO: Independent System Operator

– ITO: Independent Transmission Operator

– ITO+: more effective independence of the TSO than ITO

3. 9. 2009

Standard Model

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Ownership Unbundling

– TSO is owner of the transmission system

– VIU is not owner under company law of the

TSO (only minority shares – but without any

„rights“)

– Independence of the TSO

– No decisive influence

– No rights (e.g. power to exercise voting

rights)

– Exemptions

– Member State / Public Body

• „Truly separated“

• No commercially sensitive

information

– New Infrastructure

• Tariff Regulation

• Third Party Access

• Ownership Unbundling

• Temporary / limited

VIU

TSOSystem Owner & System Operator

Vienna Forum on Energy Law

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Independent System Operator (ISO)

– System Owner is not the System

Operator

• System Owner shall not be

responsible for granting TPA,

investment planning

• System Owner shall cooperate with

ISO

• Legal Unbundling of System Owner

– Designation of an ISO

• necessary human, technical, physical,

financial resources responsible for

granting TPA, collecting access

charges, operating, maintaining

• Outsourcing possible

• but not to VIU or System Owner

VIU

TSOSystem Owner

ISOSystem Operator

20140314, ViennaVienna Forum on Energy Law

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Independent Transmission Operator

(ITO)

• ITO is the System Owner

– necessary resources and personnel

– own „corporate identity“

– No rendering of services (and leasing of

personnel) from VIU

– Core business (Operation, Maintenance,

Development, etc.)

• No sharing of IT-systems, premises

Compliance Officer & Programme

• Independence of the Management

– Cooling-on, -off, no business relationship,

no shares

• Independence of the Supervisory Body

• No influence to day to day activities and 10-

years-investmentplan

• 50 % -1 member shall be „independent“

VIU

ITOSystem Owner+

System Operator

NRA


Cases in Austria

• Ownership Unbundling:

– Vorarlberger Übertragungsnetz GmbH (V ZER 02/11)

– Nabucco Gas Pipeline International GmbH (V ZER G 04/12)

• ITO:

– Austrian Power Grid GmbH (V ZER 02/11)

– Gas Connect Austria GmbH (V ZER G 01/12)

– Baumgarten-Oberkappel GasleitungsgesmbH (V ZER G 02/12)

• New Procedure: V ZER G 01/14

• ITO; Completion Q2 / 2014

• ISO:

– Trans Austria Gasleitung GmbH (V ZER G 03/12)

• New Procedure: V ZER G 04/13

• ITO; Completion Q2 / 20141720140314, Vienna Vienna Forum on Energy Law

Principles

• Assets owned by TSO (e.g. APG, GCA, VÜN, BOG)

– But: „pipe-in-pipe“ (e.g. GRTGaz/MEGAL)“ownership of the transmission system assets is shared between two TSOs, where these

TSOs have joint control over the transmission assets and where they have rights of use

and disposal over a part of the transmission system that are equivalent to those of an

owner (Eigentümergleiche Verfügungsbefugnis), and which allow them to operate

their part and develop it independently and without being hindered, the certification of

such TSOs should in principle not be withheld as regards compliance with Article

9(1)(a) of the Directive“

• Core activities within TSO (e.g. APG, GCA, BOG)

– But: outsourcing possible at OU, ISO (e.g.

Vorarlberger Übertragungsnetz GmbH as OU)


Principles

• Prohibition of services provided to the ITO by other parts of

the VIU

– But: telecommunication services (e.g. APG)

“derogation could only be envisaged in exceptional circumstances. Such derogation

should be construed narrowly and should not go beyond what is strictly necessary to

protect overriding interests, such as the security and the reliability of the transmission

system. Only in exceptional cases, where the services concerned are strictly necessary

to protect overriding interests as referred to above, and where no other service

provider except for the VIU could provide these services to the ITO, could a derogation

possibly be considered justified. Such derogation should also in principle be of a

transitional nature, limited in time.”

• ITO remains part of the VIU (e.g. GCA, APG)

– But: in respect of outsourcing of tasks (e.g. BOG)

“certified ITO should not be considered as ordinary "other part" of the VIU”

“it diminishes the possibilities for a conflict of interest“

“Still, assessment will be needed”19

Consequences

Consequences

• simultaneous participation in a TSO and in generation,

production and/or supply activities

– THE COMMISSION'S PRACTICE IN ASSESSING THE PRESENCE OF A

CONFLICT OF INTEREST INCLUDING IN CASE OF FINANCIAL INVESTORS

http://ec.europa.eu/energy/gas_electricity/interpretative_notes/doc/implementation_notes/swd_2013_0177_en.pdf

In-depth analysis

Case-by-case

• Cases:

– Swedegas (Sweden): Waste disposal company generating

electricity in neighbor country

– National Grid (UK): under control of National Grid USA2120140314, Vienna Vienna Forum on Energy Law

Consequences

– 50 Hertz Transmission (Germany): IFM Global

Infrastructure Fund several participations in

generation/supply

– Società Gasdotti (Italy): Eiser Global Infrastructure

Fund participation in generation

– TAG (Austria): Cassa Depositi e Prestiti participation

in ENI („Separate Account Regime“ – power of

guidance of Ministry)


Penalties / Offences

Penalties

Art 37 (4) (d) Directive 2009/73/EC;

Art 41 (4) (d) Directive 2009/73/EC

• Effective

• Proportionate

• Dissuasive

– Administrative Penalties

• No Application for Certification – EUR 150.000,--

• Repellent decision – EUR 150.000,--

• Fail to comply with Unbundling Rules – EUR 50.000,--

to EUR 75.000,--

– Discrimination and finable Offences

• 10 % of the annual turnover2420140314, Vienna Vienna Forum on Energy Law

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Bernhard Painz

+ 43 1 24 7 24 801

[email protected]

www.e-control.at

Contact


mailto:[email protected]

http://www.e-control.at/