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De Facto Rule-Making Below the Level of Implementing Acts: Double-Delegated Rule-Making in European Union Electricity Market Regulation
Published online by Cambridge University Press: 19 April 2024
Abstract
Within the area of electricity market regulation, a practice has emerged in which the chain of delegation has gone beyond the European Commission, resulting in double delegation. During 2015–2017, the European Commission adopted implementing regulations requiring detailed European terms, conditions and methodologies (TCMs) for electricity markets and system operation to be jointly adopted by national energy regulators. Should the latter fail to agree within a predefined time limit, rule-making would move to the Agency for the Cooperation of Energy Regulators. This rule-making procedure entails that, depending on the dynamic within the procedure, different actors would adopt the TCMs. This article examines how double-delegated rule-making unfolds in a novel and emerging practice, evolving beneath implementing acts. By analysing the factors behind whether TCMs are adopted jointly by national agencies or not, the study investigates whether this form of delegated rule-making in a network setting delivers decisions or whether rule-making by a European Union agency is needed.
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References
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2 The term “delegated rule-making” encompasses both implementing and delegated acts and should not be read as referring specifically to delegated acts.
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5 Regulation (EC) 714/2009 of the European Parliament and of the Council of 13 July 2009 on common conditions for access to the network for cross-border exchanges in electricity and repealing Regulation (EC) No 1228/2003 [2009] OJ L211.
6 Commission Regulation (EU) 2015/1222 of 24 July 2015 establishing a guideline on capacity allocation and congestion management [2015] OJ L 197, 24–72; Commission Regulation (EU) 2016/1719 of 26 September 2016 establishing a guideline on forward capacity allocation [2015] OJ L 259, 42–68; Commission Regulation (EU) 2017/1485 of 2 August 2017 establishing a guideline on electricity transmission system operation [2017] OJ L 220, 1–120; Commission Regulation (EU) 2017/2195 of 23 November 2017 establishing a guideline on electricity balancing [2017] OJ L 312, 6–53.
7 In some cases, the proposals could also be drafted by or together with electricity exchanges tasked with operating market coupling (so-called nominated electricity market operators or NEMOs).
8 J Rumpf, “Quaternary Law in EU Electricity Regulation: Stretching Meroni Too Far?” (2024) 33 European Energy and Environmental Law Review 2. There are also national and regional TCMs, but these are not studied here.
9 Regulation (EC) 714/2009 of the European Parliament and of the Council of 13 July 2009 on common conditions for access to the network for cross-border exchanges in electricity and repealing Regulation (EC) No 1228/2003 [2009] OJ L211.
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12 Qualified majority voting applies amongst national regulators within ACER’s governing board.
13 Double delegation of programme implementation is found in the context of European aid, see K Michaelowa, B Reinsberg and CJ Schneider, “The Politics of Double Delegation in the European Union” (2018) 62 International Studies Quarterly 821.
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20 Regulation (EC) No 714/2009 of the European Parliament and of the Council of 13 July 2009 on conditions for access to the network for cross-border exchanges in electricity [2009] OJ L 211, 15–35.
21 Art 6, Commission Regulation (EU) 2017/1485 of 2 August 2017 establishing a guideline on electricity transmission system operation [2017] OJ L 220, 1–120.
22 Heims, supra, note 14, 28.
23 ibid, 34.
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26 ibid.
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28 Heims, supra, note 14, 29.
29 ibid, 201.
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32 Busuioc, supra, note 14.
33 Adam and Kriesi, supra, note 15.
34 ibid.
35 Although TSOs may be publicly owned, they are not part of the public administration.
36 J Rumpf and H Bjørnebye, “Just How Much Is Enough? EU Regulation of Capacity and Reliability Margins on Electricity Interconnectors” (2019) 37 Journal of Energy and Natural Resources Law 67.
37 ENTSO-E, “European Electricity Transmission Grids and the Energy Transition: Why Remuneration Frameworks Need to Evolve” (2021) <https://eepublicdownloads.entsoe.eu/clean-documents/mc-documents/210414_Financeability.pdf> (last accessed 4 December 2023).
38 Bouwen, supra, note 15.
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42 Bouwen, supra, note 15.
43 The Implementing Network Codes (INC) project (see Acknowledgments). The first guideline (CACM) requiring TCMs was adopted in 2015. The end year was chosen because the TCM procedure in the guidelines was revised in 2021.
44 Commission Regulation (EU) 2015/1222, Commission Regulation (EU) 2016/1719, Commission Regulation (EU) 2017/1485, and Commission Regulation (EU) 2017/2195, supra, note 6.
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47 ENTSO-E, “All TSOs’ proposal for Capacity Calculation Regions (CCRs) in accordance with Article 15(1) of the Commission Regulation (EU) 2015/1222 of 24 July 2015 establishing a guideline on capacity allocation and congestion management” (29 October 2015).
48 ACER, “Decision of the Agency for the Cooperation of Energy Regulators No 06/2016 of 17 November 2016 on the electricity transmission system operators’ proposal for the determination of capacity calculation regions” (17 November 2016).
49 ibid.
50 The consultation document and responses are available in: ACER, “Consultation on the definition of capacity calculation regions” <https://www.acer.europa.eu/documents/public-consultations/pc2016e02-consultation-definition-capacity-calculation-regions> (last accessed 9 December 2023).
51 ibid.
52 L Hancher and J Rumpf, “Balancing Power: The Impact of Legal Review on Harmonizing the European Electricity Market” (2024) European Journal of Risk Regulation (forthcoming).
53 ENTSO-E, “Explanatory document on all TSOs’ Proposal for the establishment and the cost sharing methodology of the Single Allocation Platform (SAP) in accordance with Article 49 and Article 59 of Commission Regulation (EU) 2016/1719 establishing a guideline on forward capacity allocation” (7 April 2017).
54 ibid, 6.
55 ibid.
56 ibid.
57 ERF, “Approval by all regulatory authorities agreed at the Energy Regulators’ Forum of all TSO proposal for the single allocation platform methodology and SAP cost sharing methodology” (18 September 2017).
58 ibid.
59 ibid, 6.
60 ENTSO-E, “All TSOs’ proposal for the Key Organisational Requirements, Roles and Responsibilities (KORRR) relating to Data Exchange in accordance with Article 40(6) of the Commission Regulation (EU) 2017/1485 of 02 August 2017 establishing a Guideline on Transmission System Operation” (2 October 2017).
61 ENTSO-E, “All TSOs’ proposal for the Key Organisational Requirements, Roles and Responsibilities (KORRR) relating to Data Exchange in accordance with Article 40(6) of Commission Regulation (EU) 2017/1485 of 2 August 2017 establishing a Guideline on Electricity Transmission System Operation, Response to public consultation comments received during the consultation held 31 October – 1 December 2017, Brussels” (27 February 2018).
62 ERF, “Request for amendment by All Regulatory Authorities on the All TSOs’ Proposal for the Key Organisational Requirements, Roles and Responsibilities (KORRR) relating to data exchange” (23 July 2018).
63 ERF, “Approval by All Regulatory Authorities agreed at the Energy Regulators’ Forum on the All TSOs’ Proposal for the Key Organisational Requirements, Roles and Responsibilities (KORRR) relating to data exchange, in accordance with article 40(6) of the Commission Regulation (EU) 2017/1485 of 2 August 2017 establishing a Guideline on Electricity Transmission System Operation, as amended on 1 October 2018” (December 2018).
64 ibid.
65 ibid.
66 “All TSOs’ proposal for a methodology for coordinating operational security analysis in accordance with Article 75 of Commission Regulation (EU) 2017/1485 of 2 August 2017 establishing a guideline on electricity transmission system operation” (February 2018).
67 ERF, “Referral of all TSOs’ proposals on CSAM and RAOCM” (Letter sent by the President of the Council of European Energy Regulators to the Director of ACER, 19 December 2018) <https://www.ceer.eu/documents/104400/-/-/3364c6f8-9224-2761-fb26-64cc02c64b70> (last accessed 11 December 2023).
68 ENTSO-E, “All TSOs’ proposal for the methodology for coordinating operational security analysis developed in accordance with Article 75(1) of Commission Regulation (EU) 2017/1485 of 2 August 2017 establishing a Guideline on Electricity Transmission System Operation” (Response to public consultation comments received during the consultation held 26 February–6 April 2018, Brussels, 10 July 2017).
69 ERF, supra, note 67.
70 ibid.
71 ibid.
72 ACER, “Decision no 07/2019 of the Agency for the Cooperation of Energy Regulators of 19 June 2019 on all TSOs’ proposal for the methodology for coordinating operational security analysis” (19 June 2019).
73 ENTSO-E, “All TSOs’ proposal for the implementation framework for a European platform for the exchange of balancing energy from frequency restoration reserves with manual activation in accordance with Article 20 of Commission Regulation (EU) 2017/2195 establishing a guideline on electricity balancing” (18 December 2018).
74 ENTSO-E, “All TSOs’ proposal for the implementation framework for a European platform for the exchange of balancing energy from frequency restoration reserves with automatic activation in accordance with Article 21 of Commission Regulation (EU) 2017/2195 establishing a guideline on electricity balancing” (18 December 2018).
75 ERF mFRR Referral Letter, 24 July 2019.
76 ERF aFRR Referral Letter, 24 July 2019.
77 ACER, “Decision no 03/2020 of the European Union Agency for the Cooperation of Energy Regulators of 24 January 2020 on the Implementation framework for the European platform for the exchange of balancing energy from frequency restoration reserves with manual activation” (2020); ACER, “Decision no 02/2020 of the European Union Agency for the Cooperation of Energy Regulators of 24 January 2020 on the Implementation framework for the European platform for the exchange of balancing energy from frequency restoration reserves with automatic activation” (2020).
78 Cases T-606/20 and T-607/20 Austrian Power Grid and Others v ACER.
79 E-Control, “Mission statement” (n.d.) <https://www.e-control.at/mission-statement> (last accessed 9 October 2023).
80 See Hancher and Rumpf, supra, note 52 and Jevnaker et al, supra, note 17, regarding the legal challenges.
81 In cases T-606/20 and T-607/20, the General Court ruled that ACER was not bound by a partial agreement amongst national regulators (eg as expressed in a non-paper accompanying the joint referral of TCM adoption to ACER). See Court of Justice of the European Union, “Judgments of the General Court in Cases T-606/20 and T-607/20, Austrian Power Grid and Others v ACER” (Press release No 26/23, Luxembourg, 15 February 2023) <https://curia.europa.eu/jcms/upload/docs/application/pdf/2023-02/cp230026en.pdf> (last accessed 21 February 2024).
82 The Commission may also adopt delegated acts.
83 Referred to as an “intrasectoral” conflict line in Jevnaker, supra, note 4.
84 Regulation (EU) 2019/942; Commission Implementing Regulation (EU) 2021/280, supra, note 16.
85 The Core region is composed of Austria, Belgium, Croatia, the Czech Republic, France, Germany, Hungary, Luxembourg, the Netherlands, Poland, Romania, Slovakia and Slovenia. ACER is currently assessing a proposal from the TSOs to include the bidding zone borders that Core countries have with Ireland and Italy. See ACER, “ACER to decide on the changes to the Core and Italy North electricity capacity calculation regions” (5 December 2023) <https://acer.europa.eu/news-and-events/news/acer-decide-changes-core-and-italy-north-electricity-capacity-calculation-regions> (last accessed 10 December 2023).
86 The requirement for joint requests follows from Art 6(10) in Regulation (EU) 2019/942, supra, note 15.
87 For example, ACER granted a three-month deadline extension for a regional TCM. See ACER, “Decision No 15/2023 on the request of the regulatory authorities of the Core capacity calculation region to extend the period for reaching an agreement on the proposal for an amendment to the Day-Ahead Capacity Calculation Methodology in the Core region” (20 December 2023) <https://www.acer.europa.eu/sites/default/files/documents/Individual%20Decisions/ACER_Decision_15-2023_Core_CCR_extension_request.pdf> (last accessed 21 February 2024).
88 ACER remains amongst the smaller EU agencies. See European Court of Auditors, “2021: Annual report on EU agencies for the financial year 2021” (2022).
89 Jevnaker et al, supra, note 17.
90 Jevnaker, supra, note 4.
91 M Chamon, “EU Agencies: Does the Meroni Doctrine Make Sense?” (2010) 17 Maastricht Journal of European and Comparative Law 281.
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