Ruling of the EU Court of Justice has consequences for ACM’s energy-related duties
On September 2, 2021, the Court of Justice of the European Union handed down a ruling in a case on the independence of the German energy regulator. This ruling of the highest European court also has consequences for the energy-related duties of the Netherlands Authority for Consumers and Markets (ACM). According to the court’s ruling, certain rules with regard to energy cannot be set by the national legislature, but instead is the duty of that member state’s independent national regulator, which, in the Netherlands, is ACM.
The European court’s ruling has underscored the importance of independent regulators, and it also has consequences for Dutch rules and regulations, and for ACM’s decision-making processes. What exactly those consequences are will be determined by ACM over the next few months. What is already clear from the ruling though, is that setting the transmission and distribution tariffs is within the purview of ACM. That is also the case with the rules for system operators about connection and access to the national grids.
Transmission and distribution tariffs
ACM wishes to set the 2022 tariffs on the basis of the method that had already been set previously. In addition, for the next regulatory period (2022 through 2026), ACM wishes to keep intact as much as possible the existing basic principles for the tariff regulation. This means that ACM continues to use the so-called x-factor (the efficiency-stimulating tariff cut) and q-factor (grid-quality-based multiplying factor). Furthermore, Dutch transmission system operator TenneT will continue to have the opportunity during the regulatory period to receive a reimbursement of the costs for major (RCR) investments (the so-called t-0 reimbursement). In addition, ACM will allow GTS to keep on including in the tariffs the costs it incurs for quality conversion. That is also the case for the costs for removing gas connections (upon request), as laid down in the Tariff Code. However, future developments may result in ACM adjusting these provisions in the Tariff Code, if, according to ACM, such is in the interest of a sustainable, secure and affordable supply of energy. ACM in 2022 also leaves intact the volume discounts that system operators give to the energy-intensive industry on the basis of the volume correction scheme. In 2022, ACM will launch a study, including a consultation round, into the question of whether it is desirable and feasible to continue to offer these discounts and, if so, how.
Connection and access
The European court’s ruling also has consequences for ACM’s enforcement and dispute settlement regimes. ACM still needs to identify the exact consequences. In one specific case, the outcome is already clear. The legislature should not have laid down in the law the connection deadline of 18 weeks. That is why ACM has decided to withdraw the fine it had previously imposed on a system operator for missing that deadline. ACM will soon start a code amendment process in order to lay down in the codes new, reasonable connection deadlines. Until then, ACM will continue using the standard of a reasonable connection deadline laid down in the law, which, depending on the concrete circumstances of an individual case, can be set more specifically, if necessary. In that way, individual buyers will, until then, continue to be protected against unreasonably long connection periods.
New Dutch Energy Act
The European Court of Justice’s ruling also has consequences for the new Dutch Energy Act, which is currently drafted by the Dutch Ministry of Economic Affairs and Climate Policy (EZK). The Ministry of EZK has indicated that the bill for the new Dutch Energy Act has been brought in line with the EU requirements regarding independent oversight. This will also be a point for attention for ACM in its feasibility and enforceability assessment of the bill.