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A fit-for-purpose ACER and ENTSO Governance System in the

framework of the Energy Union

Walter Boltz, former Executive Director, E-Control

20 April 2016

EEF Dinner Debate

The 3rd Package established ACER and the ENTSOs

• Regulation (EC) No 713/2009 established an Agency for the Cooperation of Energy Regulators

– Development of framework guidelines (basis for network codes) – Recommendations to TSOs, especially the ENTSOs – Opinions and recommendations to the European institutions – Decision making (cross-border infrastructure access or

pipeline/interconnector exemptions) – Promote cooperation between regulatory authorities – Peer reviews on specific issues – Monitoring of wholesale energy markets (REMIT) – Contribute to PCI selection & process (EIP)

• Regulation (EC) No 714/2009 and (EC) No 715/2009 established ENTSO-E and ENTSOG

The practical implementation is creating numerous new institutions

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Status quo: ACER tasks according to

the 3rd Package

ACER internal

procedures

In general, ACER performed rather well since 2011.

Clarification is needed regarding roles and responsibilities

of the different ACER bodies.

Rule making (FGs) OK

Amendments of

rules

A clear, light and transparent process is needed.

Currently ill defined process.

Monitoring OK

enforcement Improvements needed: currently ACER is rather weak

when it comes to enforcing cross-border rules.

Arbitration between

NRAs

A clear and transparent process and procedural rules are

needed.

Oversight of

ENTSOs

Improvements needed:

• recommendations to be turned into binding decisions;

• ENTSOs to become facilitators of market integration

rather than organization working in the interest of

national TSOs 4

Regulatory gaps in the 3rd Package

1. ACER internal

procedures

Roles, responsibilities and functions of ACER’s bodies

need to be adjusted to new realities (no more FG/NC

development but amendments, CBCA and peer review

decisions, CACM, etc.)

2. Oversight of

ENTSOs

Adjustments in the governance of ENTSOs needed

• Improved transparency

• Assuring the European interest

• Cost control

3. Oversight of

new institutions

New institutions require efficient and effective governance.

NEMOs, TSCs, booking platforms, auction offices, etc.

4. Regional

governance

Need for oversight of regional institutions and processes

- having key functions in the internal energy

Market (RSCIs, etc.)

- having a supranational character active at

regional level with an European dimension

- If regional is a first step towards European 5

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ACER Working Groups

Bring together the regulatory

knowledge from across 28 MSs

Board of Regulators

Brings together the regulatory

knowledge from across 28 MSs

policy designers

ACER Staff

High level regulatory experts

and administration

Director BoR

ACER

Staff

ACER

WGs

AB

= ACER

Director Responsible for representing

ACER

In charge of ACER‘s management

Administrative manager of ACER

BoA BoR Director

(1) ACER internal procedures

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(1) Increasing ACER´s effectiveness

Tasks of ACER

(2) ENTSOs: Oversight and enforcement (I)

– ACER‘s obligation to ensure that third parties (ENTSOs,

capacity allocation platforms, etc.) exercise their own

obligations duly and in compliance with applicable rules

Developing non-binding recommendations or request to

adjust their behavior

– Two fundamental conflicts in current architecture

• ENTSOs must carry out tasks in the interest of the IEM, but

consists of national TSOs with national interest

• Non-binding opinions of ACER do not allow effective oversight, but

create considerable workload for ACER often with little effect 8

(2) ENTSOs: Oversight and enforcement (II)

ACER Opinions etc. to be made optional

Need for enabling ENTSOs to act more unequivocally

in European interest

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Need for improving ACER‘s oversight and enforcement

powers

Need for enabling ENTSOs to act more unequivocally in

European interest

(2) ENTSOs: Strengthening ENTSOs'

independence from the inside

ENTSOs to publish all relevant documents, minutes from

Board, Assembly and Committee meetings

Possibility for EC/ACER to participate at meetings as

observer

EC approval for the appointment of Secretaries General

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Improve Transparency

Increase independence of ENTSO staff from TSO-elected

Secretaries General

(3) A governance model for new

entities

To overcome problems of effective cooperation numerous new entities with monopoly-type tasks are created (gas capacity booking platforms, NEMOs, exchanges, RSCs etc.)

Oversight at supra-national level currently very limited

ACER to carry out this oversight through issuing binding

decisions (general terms and conditions, audit of costs, etc.)

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Oversight (for existing and future entities) needs to be

institutionalized, for monopoly and/or critical functions

(4) Regional Governance

• For achieving the IEM we sometimes – regrettably - need „regional“ interim solutions

• Even if regional differences make sense, a common methodology and approach is still needed.

• ACER should develop these methodologies and supervise their correct implementation by NRAs and TSOs

• There is a need for oversight of (regional) institutions – having key functions in the internal energy market – having a supranational character, active at regional level

with a European dimension – For any regional activity that should eventually develop into

a European approach

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Walter Boltz

Former Executive Director

E-Control Austria

www.e-control.at

Contact

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