A good governance perspective on ACERDr Saskia LavrijssenEuropa InstituteUtrecht University

1. Background

• Rise of EU agencies and networks has raised issues of governance (accountability, participation, transparency);

Objective:

Has the transformation of European regulatory networks into European regulatory network agencies improved the quality of the governance of the European networks?

2. European Regulators Group for Energy and Gas (ERGEG)

The rise of European (regulatory) networks in energy (ERGEG) and telecommunications (ERG)

• Co-ordinate application of Liberalization Directives and ensure

effective and consistent application of directives in EU Member

States

• Advice and assist Commission

•Informal structure• Hybrid structure; concept of double delegation

• No legal personality

• Representatives of NRA

• Consensus-based decision making

2. ERGEG: powers

No powers to adopt binding measures

•Advice Commission• Advice general binding measures (comitology guidelines)

•Horizontal co-ordination between NRAs• Regulatory convergence (best practices)

• Procedural co-ordination

• Monitoring

2. ERGEG: powers

• Substantial output despite limited powers

• Substantial input in Commission’s legislative and administrative processes

• No direct legal effects but indirect legal effects• Commission incorporates advices in comitology guidelines

• NRAs take into acount non-binding guidelines when

exercising their powers (principle of legitimate expectations)

• Administrative High Court for Trade and Industry also used

non-binding guidelines as an interpretation tool (LUP case)

2. ERGEG: accountability gaps

• Legal Accountability• Limited judicial protection at European courts against ERGEG’s

advices and positions

• No “acts”

• Role national courts??

• Political Accountability• Powers EP most far-reaching in comitology (RPS)

• Comitology does not apply to substantial part ERGEG’s output

• Dutch Court of Auditors 2004/2005: “Accountability vacuum”

• Stakeholder Accountability• No good governance rules in European framework

• In practice very transparent and many consultations

3. Third legislative packackage

• Limits of network model• Consensus-based nature

• Insufficient legal and political independence NRAs

• Insufficient degree of harmonization of powers NRAs

• ANSWER: More Europeanization• ACER

• Stricter independence requirements and strengthening

powers NRAs

• Stricter regulation and control by European Commission

4. A closer look at ACER

REGULATION 713/2009•Main purpose: Art 1(2) “To assist NRAs in exercising, at Community level, the regulatory tasks performed in the Member States and, where necessary, to co-ordinate their action.”

•Active as of 3 March 2011

•Art. 2: A community body with legal personality

Chiti 2009 “a true European independent agency”

4. ACER: main tasks and powers

• Main powers (Art. 4-9)

• Issue opinions and recommendations to transmission system operators

• Issue opinions and recommendations to NRAs• Issue opinions and recommendation to the EP, Council

or Commission• Take individual decisions as referred to in Art. 7, 8 and 9• Submit to the Commission non-binding framework

guidelines• Monitoring

4. ACER: a closer look at some key tasks and powersQuasi regulatory tasks

•Development framework guidelines (Art. 6(4) Regul 713/2009, Art. 6 Regul 714/2009, Art. 6 Regul 715/2009)

• Commission requests Agency to submit non-binding framework

guideline setting out clear and objective principles for

networkcodes.

• Agency consults ENTSO, other relevant stakeholders in an open

and transparent manner.

• Commission may request ACER to review framework guideline if it

does not contribute to non-discrimination, effective competition

and the efficient functioning of the market.

4. ACER: a closer look at some key powers/tasksQuasi regulatory tasks

•Involvement in network codes• Commission requests ENTSO to submit a network code which is in

line with the relevant framework guideline to ACER.

• ACER may consult all relevant stakeholders and provide validated

opinion to ENTSO on network code.

• ENTSO may amend network code and resubmit it to ACER.

• ACER submits network code to Commission and may recommend

adoption. Commission provide reasons in case it does not adopt

the network codes.

Article 10 Reg 713/2009, Article 10 Reg 714/2009 and 715/200:

EXTENSIVE CONSULTATION AND TRANSPARENCY OBLIGATIONS

FOR ACER and ENTSO

4. ACER: a closer look at some key tasks/powers

• Administrative (binding) decisions

• Individual decisions on technical issues

• Decide on terms and conditions for access to and operational

security of electricity and gas infrastructure connecting at least

two Member States

• Disagreement between competent NRAs

• Upon a joint request from the competent authorities

• Exemption decisions

• May be overruled by the Commission

4. ACER: a closer look at some key tasks/powers

• Opinions• Compatability of NRA decision with directives, regulations,

comitology guidelines;

• If NRA does not comply, Commission may be informed;

• Commission may require withdrawal of decision;

• Recommend best practices to NRAs

4. ACER: some Observations

• At first sight limited powers (influence Meroni)

• In practice: substantial regulatory output

•There are already signs that ACER will have decisive influence

in drafting framework guidelines and network codes;

•Non-binding advices and opinions may be incorporated in NRA

and Commission measures;

•How technical are technical decisions?

•The importance of agenda setting

4. ACER: governance structure

• Administrative Board• Members appointed by EP (2), Council (5), Commission (2)

• Independence requirements

• Appointment and control director

• Workprogramme, budget, annual report, staff policy

• Board of Regulators• Senior representatives NRAs, one non-voting, representative

Commission

• Independence requirements

• Provide opinions on the opinions, recommendations and decisions

considered for adoption

• Approve work programme

• Approve independent section on regulatory activities of annual

report

4. ACER: governance structure

• Director• Appointed by AB, subject to favourable opinion Board of

Regulators

• Guided by Board of Regulators

• Independence requirements

• Daily management of ACER

• Prepare work AB

• Adopt and publish opinions, recommendations and decisions,

subject to favourable opinion Board of Regulators

• Board of Appeal• 6 Members appointed by AB, on a proposal from Commission

• Independence requirements

• Decide on appeals against decisions of ACER

4. ACER: accountability

• Political

• In theory: Improved possibilities for EP to hold ACER accountable

• Appointment 2 Members AB

• Before appointment director can be invited to make a

statement before the EP

• Upon request director should make a statement before

committee/or answer questions

• Director can be called upon to submit report on the

performance of his duties

• Budgetary authority

4. ACER: accountability

• Legal• Improved possibilities for judicial protection

• Board of Appeal and appeal at ECJ

• Limits for legal standing (direct and individual concern)

• Limited judicial protection for non-binding acts

• Stakeholder accountability• Many provisions on consultation and transparency

• Especially role ENTSO is strong

• Who represents the consumer?

5. Final remarks

• At first sight more possibilities for political, legal and stakeholder accountability

• But accountability is also more diffuse

• Division of European and national powers is unclear

• Who is the principal or who are the principals?

• Role of national parliaments is insecure

• Possible role for mixed parliamentarian commission consisting of national and European MPs??