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The structure of ACER

First of all, the good news is that the ERGEG will not disappear. It will be transplanted within ACER and wear the clothes of a Board of Regulators. Such a transplant was not granted, for the DIA generically predicts the possibility to set up scientific or expert committees, while not requiring the establishment of a NRAs’ representative body.

Another welcome feature concerns the mechanism of dispute resolution. Whenever the agency adopts an individual decision, interested parties are granted a right of appeal to an independent Board of Appeal, established within ACER. The Board of Appeal shall decide upon the appeal within two months. Actions may be brought before the Court of Justice only after this appeal procedure has been exhausted. Such a mechanism has the merit to speed up the dispute resolution and to avert the overburden of the non-specialized European judges.

So much granted, a major concern regards the provisions related to the Administrative Board. The Commission proposal, following the general scheme advanced in the 2005 DIA, determines that the Administrative Board shall be composed of twelve members, six of appointed by the Commission and six by the Council. It also states that the main programming and monitoring tasks will be assigned to this body. This solution, though complying with the regulatory agencies’ organization foreseen in the DIA, is not convincing. It is true that ACER exercises executive powers (even if of a special kind) at Community level; but this does not necessarily imply – as the DIA suggests – that «an equal representation of the two branches of the Community executive within the administrative board» should be provided, and that «the Commission and the Council should therefore designate an equal and limited number of members within the administrative board». Moreover, within the EU, the executive power in the energy sector rests primarily with the national governments. The same argument followed by the Commission could paradoxically imply involving also national governments in the appointment procedure. In short, the rationale behind the proposed composition of the Administrative Board is at least questionable.

This is all the more true if we consider the specific regulatory functions to be performed by the Agency. Independent technical advice, regulatory coordination of NRAs, individual decision on cross-border issues and the regulatory oversight of the TSOs all require an enhanced degree of independence from all regulated interests. Since the Council’s and Commission’s power of appointment is not bound to respect any criteria of neutrality or expertise of the nominee, nothing prevents the national influence or the regulatory capture of the Administrative Board. Moreover, this body could pursue its own agenda, eventually affecting the (assumed) neutral pro-competitive orientation of the board regulators. Such an unfortunate outcome would, at best, trigger the internal efficiency of the Agency; at worst, jeopardize the independence of ACER and of the overall continental regulatory network.

From EU Energy Policy Blog

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