France Opens Its Electricity Market

7/27/2019 France Opens Its Electricity Market

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France Opens ItsElectricity Market

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dii-cctive coticcrning the internill c cc t i i c tybe transposer1 i n t o Prcrich law in th c h:iImonths of 1999. This legislative proccrlutt inarks th c c ~ lt' iproccss that got undcrwny in the U r w pe a n Unioii (UU) n tInzenyears ago. [ t also inark4 the entry o f EDF into ii ncw cnviron-irient, governed by i i cw r.iilesof tlic g a i ~ ~ e .hn t arc l l ~ ctakes ufthis hitnspositioti'? Hmv Itave we rceched this stage? Wha t methe nexl clcacll ines? How are the otlici' European countriesready 11g theni e1vcs L'or i t ?'I'lic bill fo r th e "inodernizarion and rlevelopmenl. of (h eelec-lricity public scrvice" wiis x lopter l during a I'irst reading hy aI ' )-vote riiajority i n llie h'nt.iuiia1Assciribly on 2 fvlnrch 1999.Although many other stagcs initst be gone tliwugh before th c I ' i -no 1 ncloptivn UI ' th e legti1 enaclmcut, the playcrs of the pvwci.inarket now wvc support w h i c h provides m;lj(ir iitdications 01 1what thc l'iiial Inw to conic into force should be.Ne;trly IO ycnrs ant1 many meetings wcrc needed beforc Ih e15 tneinhcr sl;i lcs of the El l w i l e o an agrccmciit o n n lircctivcsetting out th c priiiciplea of thc Eiiropeatielcctricily nmrket. l'hcprocess actually go' under wa y i t ) M ay 1987. Al'ter n period 01 'cntifroiitation, niarked, ammg o h m , by tlic rcjectioti by llicEuropean I'arliamcnt of thc tcxl presented hy llic EuropeiinCoinmission, thc viewpoints ainotig the nicmbcr. stales gladu-ally C A ~ Closcr together ;is or 1995 nntl finally ended up in t l icatloption or D directive ii i 1:iie 1096. 01icc th is srnge ha d bccn

Tlic EU Electricity Directive leavesa great deal of freedom to theinember states, and the opening ofthc French market is intended t obe progressive and controlled

coinpletetl, it rcmiiinctl Ibr t.he meinbcr stales to tlaiispose t h i sEulupcnn text into (heir national law. This is the period we irecui- imtly goiiig through iii Ffiiiicc.The Europcan directive contains thr.eee compu s t x y pt'ovi -cioiis:

The opei-iing o coinpetition of' part of the national powerinnrkets. Soinc clicnts. referred to ss "eligible cusloii'ia's,"I H U S ~ have thc possibility OF chmsing their eleclricity siip-pliers. Howcvcr, rhe directivc oiily lays clown a iuiiiiinutnperceritagc oL' ihc opening 01' thc mnrket. Each couiitry isthcii rrcc to deterininc which customers wi l l he eligiblc. [nFrance, h c bill c:ills fo r lhc (>pcningof the inarkct nt thelevcl clclined by the dii-cctive,26.5%; in thc I'irst stage (scc'Lible I ) . 111 he.EU, thc cffcctive average opciiing pl;uint.dfnr 1999should cotne to 60%. This percentage is cxple i t ie t lby Llw fact that sonic com tries have libcralized or will li beritli7.c a l l of their tjlilrkct as of 1999: Lhc Scatidinaviiuictnintr ics, Great Britain i ind Germany.IIi e possibility for inrlepciident prodricers to obtain nrit l io-rixaticins lr.btri th e piihlic ;tiitlinrities to se t up businesc inH.ancc an d hwve t i c c e ~ s0 tlic power. transmission and dis-tributinn nctworks i n exchangc [or R fee so as to hc able tosupply thcir c1istotners.A scl 01' provisiotis enahling third-party ucccss lo the. tieu-tral a n d iiitlepentlent miwork. T h k iiriplics nccouriiingunhunclling, il l othei. ~ i o r d s ,he xepariitiun 01 ' accounts tb relectricily generatioii, tr~insniissioti,mil distribution activ-ilics aitd th e appintiiicnt of a network opcixtor iritlepeiid-c i i~ f the other players i n te.r ins o l inanagement.


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fit levels tleilned lsy tlic directiveMarket in France lestiInnle\

Apart [ ro i~ ihat , the F,iiropean directive lciivcs a g u t en1 offiwdom to th c mc1nbe.r states. [hats w h y thc coiitcni 01) thelaws nf transposition o f the directive t.o national Icgislation is soi important.Mcinher slatcs :ire Lree to do the following i n part ict i lw:Enirust missions in the general econoniic interest (;I iinlioiiwhich encompasses Ihc piiblic service such as it is con-ccivcd in France) to one o r more cornpanics in the powerscc hr , which is envisaged in FrmiceCrmiuc t n long-teriii energy policy aiid planning, which isalso cnvisngcd in FranceDctwiniiic whnl types of clistoiner will h c cligihlc.

Par-Reaching Dialog BeforehandSt;ating i n 1 khruary 1498, llm Frciicli govertinient decided toinitiate dialog betweeii thc vurioiis p l ; y ~ sf the powermarket(EDP. unions, cus tcmc rs, coiilrnclors in the sector, elected rep-rcsenratives, local comm unities, etc.) Iiciorc iransposiog the di-rective into French l aw. [(I s c ~ ~IS it basis Cor this dialog, theMitiistry of Industry puhlishcrl a white paper preseiiting the d if-ferent choices availahlc to thc country oti the occiision o f thetransposition. Ihc gcwci4iiincnl lsoconsu lted the Hcononiic andl d m r Council, thc Compc(i1ion C ortimittee, the Higher E h -tricity and Gas Conimillcc, as wcll ns the Regional f konun i icarid I nbor C r ~ u ~ i c i l s .t the siiinc limc, prime niinister [,ionelJospin ciitrnsterl Jean-Louis Uutiiont (a Socialist Party deputyfi-nm tlic Meiise.) with ii mission or rcflcctinti aitd tnediationwith the social partners ; incl thc economic nilicu. Aoiong oth-CIS, it dealt with coticeii is reliited to th e s ta tus oithc persorinel ofIhc power sector, EDFs fiiture missions and thc obligations tohc f~illillctl y the. electricity public service. Bdorc pulling thebiIl before Par1 a ment , the government rcccivctl IIic opinion ofIhe Council of State.Legislative ProccssThe rrmsposition bill, known i i s tlic bill lor [h e riiorleriiizationaiid dcvclopment oft he electricity puhlic servicc, was adopted inthe Council olMinisters ( i f 9 Ilcccnihcr I998 and by the NatiutialAssembly of 2 Miitch 1999 an d latcr discussed iri the Senatc.Once thc law liiis hccn vo~c r ln Parliament. the final text willhc rorwardcd lo Ihc general secretariat of ttic govwnm cnl. Hewill bc rcspnnsible for presenting the text for tlic signalurc ofth epresident orthc +cpublic,wh o will hnve 21 fortnight to ciiacl th cl aw (iii athcr words, give it legnil furce). Ilic act will then bepuhlislicd in Ilic nllicjnl ourriol.rhc ~msi t ic i i t 1 tlic icpublic may, withiti ii pcriod ( i f 2wccks, rcqiicst th e kirliaincnl 10 t l c l ibe r ~~ tever tlic bill o r s t m co f its articles. Ti1 placticc, this is soiucthing that seldom t~cctirs.Hel a s well tis the prcsidcnts ol (he Sci ia le an d the National As-sembly, o r OF a groiip iiindc lip 01 60 deputies or 60 senators,inay i i l s o r c l c r Ihc issuc 10 the Constitutional Council s o as loinakc swc rha l th e law conforrns to the Cons( i1 t ihn .Th e Con-s t i tu t i i ina l Ccliiiicil has ii month tn express an clpillion on thisIMIh i o i w v l ! t i ~ i i i w d i i ~w l e t r : ApIll211011

mntter or n week it the govertiinent makes such a requcst. I t sdccisions ifrc rnposed on nI I concetned, etid no appeal proceed-iiigs cnii be undertaken.11 th c Coiistitiitionnl Council tlecl;ires that the bill conformsto Llic Constituiioii, it can bc enacted. 01 1 the other hand, if theCouncil statcs hat a bill as n whole is contrary to the C onstitti-

h i , he whole legislative pcocedure niust be started apiin. Th cConslitutionnl Council ma y decide that part o f a law c o n h n slo the C onstitution; in such m hypothesis, the law niay he ciiactetlexcept foI those nrticles or parts of articles [tiat tire cuntrary toth c Conslittition.Howcvcr, Ihc ciiaclincnt of tlic law will no t bring the processfor tlic iransposirion ollthc directiv e to a close. In fact, some ] m i -visions w i l l liiivc to hc spccilied by application decrees to hedrawn up hy th e goveriimcnl a n d piililishcd i n thc olficial jour-na l in the coming wceks ;uid months. Thai is wh y the hill appli-cationofthe definitive textwill still requireanother lc w months;It k i n g ohscrvcd that the dircolivc lias not been ttaosposedhefore thc dcadlinc daic (19 Fchi-uary l Y W [or France), th e Eu -ropcan Coinmission mighl takc lcgal aclioii ngainst Fratice lia-blc tu lead 10 ib ncnkncing, by lodgitig n complaint before theCourt o l ustic c olLnxcinbnurg. This is whnt is known AS in i iic-tion fo r defiiultiiig. T h e s still soinc toleraiicc in actual fact.When it rhscrvcs that the transposition p r w lhns indeed beeniintlertrtken (which is the casc fo r Fllancc), the cnininissibn oftengrants th e nietnber stiite an atitlitioiial period of timc.Controlled and Transparent Opening[he opening of th c French inaikcl is iiilcndcd lo bc progressivennd coii~rollcd. n first slage, more than 400 cligible customersin Frniicc will hc able to negotiate the conditions of their elcc-hicity supp ly with the various producers of the EU. This rclirc-scnts o w h% of Ficncli electricity demand. I n rrddition an dunder ccrtain conditions, the bill also allows the PIlIchiksc 011clcctricily Cor.rcsalc i i i [he national territory no d acknowledgcsthe partial eligibility or non-n~itionalizc?distrihulors (NND).Al l of these elemen ts will make it po.wilc to crcatc a geriiiinelycompetitive power market as of 1999.

France i s rtqt the only European coun t ry t o adopt a gradualapproach tu the upciiii-ig o r its innrkct. hiisbin. Italy, Irelend,Belgium, Portugal, atitl Greece arc doing or are Iilaniiiiig io dothe same.Contents of thc Bil lThe text consists of inensiires ciimed at ensoring the openiiig ofLlic Fretich innrket, as well B S iriiiintainitig the cliiiractcrislicsparticular to piiblic servi ce and to long-term platwing.Eligible Customers an dModes of Network ACCCSSAIIY final consumer whose annual cr)iisuinption on it siic ishighe r th;iii the l i m i t . set by the Council ofStat c will hcackriowl-cdged as an eligible custumer f o r this site and will hc able tochoose his supplier. Hc is therehi-c iihIc to co i i c I t idc an elec-tricity purchase contract with ii prodircer or supplicr of hischoice established on the tcrritory of a Member Statc or 0 1 theEtiropenii coniiniitiity, or within the fratnework of thc pcrfot-ninncc 01) iiitcriiationnl agreeinetits, on the territory of anolhcrstatc.Thc text also specifies that a tight of access to the ptiblicIransniission ; i t id tlistriliution n etworks is alsn guaranteed by theoperiitors d th e s c nctwiirks sa as to: ciisiirc tlic iinplcinentation ofthe coiltracts helwceri aneligible custon icr ;ind thc supplier of his

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choice, allow t.he supply b y ;I pmluccr of his premises,suhsidiar-ies, parent company md subsidiaries o fth e latter, within the lindt01 his own production, cnsiire tlie implenientation i) f tlic clcckic-ity export ccintwcts conclurlcd by a protlucer est;iblishctl on theriritional territory, ancl ciisure public. service missitms.The bill stipulates that llic tariffs fo r the utiliztition of publiclrarisniission 2nd tlistributioii iiclworks to be paid by th e i i s c i xsliall b e calculrtterl in a iioudiscri~niilaiory ay on the basis d a l lu I tbc COSIS of these networks ...Thc decisions concerning thetwiflk and price litnits shall be inadc joiiilly by the Ministers ofEconomy aiid Energy, 011 the prolios:al ofllre Electricity Regula-tion Commission.Authorizations and Invitations to TenderAccording Lo h e bill, EDF mid the othcr clcct iki ly supplierstiiay rcqucst aulhorizatioris to build and opcriitc iicw gcnerntionfacilities. Thcsc authorizations will be issucd by tlic ministe r ofenergy.The text stipulatcs that when generation calwitics do n o tm e t the rnultiyear investn imt pro gram ming obje ctives, partic-ularly those concern i ig gciicration techniques and tlie geo-graphical locatioii of the facilities, the minister of energy inayrcsork to Ihc rendering procedure, after rccciving tlie opinio n ofthc pub lic iransrnissioti network opcralor. The Electricity Keg-ulntion Cotiitnission shall iinplcnicnt the se invitations tu tciidcr.The bill specifies that authorization requests an d bids in re-sponse to the invitativiis to tcndcr may be examined according t ( ~certain criteria: the sccurity and salety of public electricity sys-tcins, installntions a n c l iissociatcd cquipinctit; the choice of sites,1;uiid tisc an d the utilisation of public ground; cnergy efficiency;the technical, econo mic nod financial capitbilities of Ihc applicantor requesting party; and coinpatibility with public scrvicc princi-ples an d missions, particularly the ob,jectivcsoC intil(iycar nvest-tnetit progl.a1nniiiig a n d ctivironmetital protection.Transmission Network OperatorThe text stipulates that within ElectricitC de France. thc opci*a-lor of the public electricity trt~nsiiiissio r~etwork shall carry ou tits missions under conditions laid down by specifications a p -pi,ovecl by decree by tlic Council of State.It shall have network operation and mainteii;iuce fu nction s,as well as network developincnt rcsponsibthe missions entrusted to i t ninke it a majo r player in h i s ficld.Indeed, the bill spccilics hat the operator of thc pitblict i x i s ni issinn nctwtirk shall opernte atid mai ntai n tlic ptiblic clcc-tricity triiiisiiiissio~i ietwork. Lt shall he ~.cspnnsibleor th e de-velopinwi ol this network so as to al l t)w thc coniiection ofprodu cers, dislribiitnrs ancl consume rs, as wcll as Ih c iotercoii-w c t ion with 1Iic othe r tietw orks .,. The iiclwork operntnr rlepert-ment shall iinplcnicnt the demand, supply m d consunipt ionprogrammes cstahlished befoi-eharirl_..Ilicpublic timimissionnctwork opcralnr depiirttnetit shall see that thcrc is a balance ofpower flows on tlic nclwork at all titnes, iind shall also cnsurcthe security and ell-icicncy of this network, by taking inlo nc -count th c tccliiiical coiisttxiiits involvetl. It shall also watch thatthere is dr w com plianc e with the rules conccriiiiig thc iotcrcoii-ncclion 01 ~ h carious national power traiisniissinri systems.Ftirthcrmore, th e text stipulates that thc ptibIic kmsinissionnctwork npcrator department s h i i l l bc iiidcpcrident, f rom theinaiiagenicnt statidpoint, of the otlicr activilics of Electriciti deFrance. For the ;tppointmcnt of its director, the chair o lElcclricild rlc France shall propose thrcc csndidatcs to tlie minis-te r nf-encrgy. Th e minister shall qqxi int o i i t of these candidates10

ns tlirec~oror a 6-year period, after receiving thc opinion of theElectricity Kegtilation Commission . . Within Elect.ricit6 tlcFmnce, the pub1 c transinission iietwork operator departincntshall have its own budget. Th e budget atid financial stateineiitsshall be notified tu thc Electricity Regulation Cotninissiun.The bill also specifies t l iai tlic public transmission networkoperator departtnent s h a l l prescrvc Ihc confidciitinlity of infor-ination of en economic, coinincrcial, industrial, financial, ortcchiiical naltire the communication of which wr)~ild c detri-incntal to the rules of open competition an d no11 disc rimi natio niinposcd b y the law. The list of infurination cunccrncd shall betleterininccl by dccrcc issued by the Counci I of State.Th c lcxt also calls for sanctions should thew hc breaches ofconfidentiality. It stipulates that any p w s m in possession ofthc alorcme!ztioned itifortnatioti and wh o Id on gs lo Ihc publicLransmission network operator dcpar lmcnt slid1 be fined100,000Frcnch francs fo r knowingly ct)minunicaLiug thc afo re-said iiifornx~tion,n any form whatsoever, to any pernon Ibrcignto t h s dcprtinent.An operator dcpnrtiucnt was not set up outside EDF becauscthe directive does not iniposc this. At the most, it stipiilates theindependence o f the iictwork opcrator with respect to the iniin-ngetneiit of th e other activitics not related to the transmissioniletwork. Other countries, sucli 8s Gcmiaiiy and Austrin, haveinncle th e saine choice i is Flancc. Furthermore, the text offersmany giiwititees to eiisiirc: that the opcrnlor ilcpartriient will actiii ati iiidependent and ncindiL;Criniiiiaforyway.

Public ServiceTlic bill stipiiliiks [lint the electricity puhlic servicc aiins iit en -suring Ihc supply of power throughout the national ierrilory. Itspecifier t h a l this piiblic s ervice shall ensure th e balancccldc-\& piwi t of clcctricity su pply, the development. and opcratioiinf public electricity transrnissiuri and distribution networks, a swel l a s thc supply oT clcctricity.Thc bill stipulates nam ely tha t the electricity supply inissiooconsists in particular i n ensuring the following throughout th etcrritory: ( 1 ) The supply of electricity to custoiuers who aic noteligihlc ,,. while cotitribiiting to social co hcsion , by means oftla-Lional geographical equalisation, giiwiiiikc t)F thc concitiuedsupply of energy to the needy, and by favouring dcinand sidemanapcincnt (...); (2) emerg ency electricity supply to producersor to eligible customers cuiinectcd to Lhc public networks,whciicver they make the request fu r such supply ., . atid ( 3 )~power upply to an y eligiblc customcr wbcn (hc latter is unableto find a supplier.Financing of Iuhllc Service MissiorisIt wonld be unkiir that cxpcnscs related to public service inis-sions be buriie solcly l i y ED F i n the face of competition. lhat iswh y the law priwidcs for the selling up of appro priate financingsystems.T h e text specifies that stiinc public scrvicc expenses shall besubject to specific f inmicing. These cxpenses concern th e fol-lowing i n particular: cxLra costs which may result from con-tracts arising from invitations 10 tender ... or from the purchascnliligaticm; cx lra gcncration costs, in areas that nre not intercon-nected to the conhicntal rtietropolitnn network; the additionalresearch aiid dcvclopment costs necessary to increase tlic t m s -mission capacities of power lines, in particular thosc iiiteiidedfor the iiitciwnncctioii with tieighboring countries aiid thc iin-provcincnt of Ihcir aesthetic blending into the etivironincnt,

!i:ili ioiucr i : r i g hw / n . q f k u i c u , AjirJi 3000


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According 10 tlic bill, these missions s h a l l be finaliced by iiiiclectr ici ty gcncixl interest expenrlit.ure und . Thc Iiind shall besupplied hy contributions [id y the prut lucws or their subsitl-ii iries and hy thcdislr ihul iorl oiganiziitions, wlici i thcsc di I bh l toperators supply c nc rgy Io iinnl customers ins(al1cd o11 hc na-tional territory. by clcctricily producers generaling pow er , forthcic ow n use _.., s well a s by f inal cusloiners import ing elcc-t r ic i iy o ~ ~ w h oiiiike intl.;i-Conimunily p o wc r acquisitioas ... Ihei i i i io i i i i l o f thc coiirr ibutions ... stiall Ic c~11cul:ilcd n proportioilto thc ntiinbcr ol ki lowntt-hours siipplicd t o lh c Iiual custoirierse\ tub l i shcd i n ~ h c :ttional t e r r i t o r y i ir p i . d l i c e d b y;iiitoprotluccrs for lhc i r owti use.The text a l s o speci f ics that h e luntl s h a l l bc iniuiagccl by thcCaissc tlcs ddpf l s c l coiisigiintioris (Deposit an d Cor is ig~ i iue i i lOf f ice) uiidcr :Ispcc ilic account. The Caissc des clCpBts ct con-signation is i~ublic finan cial orgiiinisation.Long-Term Planning of InvestmcntsThc bill stipulates that tlic inillistry of energy ,slid1decidc andmake public the mult iycai*gcnciation investment prugimii i i i i igwhich lays down the chjccl ivcs coi iccrning the brcakdawii olgcrcrnlion capaciries by pri inary c i ic rgy smirce ;iritl, it neccs-s m y , by gcnerritioii techtiiquc ancl gcographicnl are:[. .,. Lhixprugramming is sct o u t i n :i eport ])resciilcd to Pndiament bythe Ministe r ol:Eiicrgy in the year fo l lowing any rcricwal of theNational Aweinbly. hi France, except for diswlut ioii by thcpresident of thc rcpuhlic, th e National Assenihly Is rcncwcd ev -er y 5 years. l hc Iirsl ~ I t h e s eeports shall bc prcscnlcd ii i theycar which follows th c enactmen1 of this Iiiw.

Ihe text spccilics that to tlruw up t h i s proglainiriiiig, theinini;lcr ol cncrgy shnll p; irt iculdy iisc us a basis :I multiyearforccasl iiivetitory drawn up i l l . 1c;isl cvcry L W O ye:vs, trntlcr tliccon~rol f th e State, by h e public ~ransinissioii etwork (lpei-il-tor. This inventory shill1 t i lke inlo iu mu tit cunsuiript ion t rct i t ls ,lriinsrnissic>il apacitie.san d exchangcs with Ibreign networks.

Speciality PrinciplcTh c t c x l spccififies bat EIIP shall hc tihlc, by subsidiaries OIcoinpanica, giotipitigs or orgiwizal ions In which i t or its subsid-iaries hold sti:ues. to l>rciposc (i cl igible c i i s t m i e r s prcmit onthe natiorinl territor y ilconiprchcn.sivcoffer of technicul or c o ~ i i -i n u c i d services togcther wilh thc supply of electr ici ty. Con-ccr iiii ig noiicligil-hc ciistomers, the bil l st ipii lu(cs h t DF nntlthe subsidiurics (hat i t coritrols sh~1I n ly bc able to propose ad -visory serviccs me i i n l to I m i i i o t e rlem;intl side inanagemetit.l h e y s ha ll iio1bc ablc 10 offer services concerning llic constitic-t ion or I~~~~C>WC 01i i i reini i l i i ist i il Iiitiolis, LIIC :~ k ri d rentalo f user energy applianccs.KcgulationThe text stipulates t l i i i l thc Elcctricity l i e g ~ l i ~ t i i ~ ~uminissiorishall consis1 ofsix roembers ;ippoinlcd for a six-yem. period ow-ing ti) thcir qiia li icntions i n th e legal, cconoinic atid technic;ilfields. Thrcc inciiihen. inc luding thc c l ia imim, s t i a l l he ap-pointed by decree. Llic h r c c other tnenibers s l i a l l hc rcspcc-l i vc l y appoiiitcd by t t ic Ircsi~lcnt 1 tlic National Assetnhly, lhcpiwidcot of the S m it e iund thc cliaii.mnii of the Economic LI~~Labor Col i ic i .Thc bill equii l ly stiitcs that a govcriirtietit coti i i i i issioi lcr tolhc Electr ici ty Regulation Commissioi i appointed by the minis-te r of energy shall makc k n o w n rlic governinents andyscs, par-~ i c u l a r l y s coticerns i t s energy pnlicy./ fCi


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ties have applicd I'm that stkitus. Specific s OI I the fiinctioiiiiig o fopan awess wcrc soon after dealt with in the associations'ngreernetit oti transmission pricing enacted in May 1998 an d theDV G ChidCorlc piiblistietl in July 1498.

Associations'Agreement onTransmission Pricing illid Gridcode7'hc associaliotis' agreernent, signcd by the association ol' Gcr-man clcctric iililities (VL)F,W), nl'Gcnn an industry (13111)andofiiidustrial self-gcnwalors (VlK), prescrihcs pnslnge stninp pric-iiig for the distri billion networks (generally 5 1 IO kV), piiitl ;it(lie rlernnnd point. FIWhc rransmission networks, i n addition toa pirstnge statiip coniponcrtt collected i n purtiuns nl both de-riiaiid an d injection points, i~ distance-depentleiit pricc compo-nent is atliletl for imsnc t io i i s whose avcragc slroight-linedistmicc cxceeds 100 km (D M O.l25/(kW*;i'l'km)), Transnc-t ions pay only far the voltage levels they use; ihc al'rcctcrl volt-ag e levels iibovc lhc levels of connection to the grid areclctemitied 011 the hasis of lhc linea r clistarice hctwccn injectiotian d clem;uid. Systciii scrvices, tminsfornxition and losses Lirecharged sepalatcly.Corresponding tu thc agreeetnetit's tmnRaction -iiricnted ap-pi-oach, the GridCodc describes a system for rcgistcriiig, opera-tioilally evaluating, and updntiiig traiisaclions, including theirsoiirces an d siiiks aiid %-hour schedules. For small customers(c.g., households), thc schcddes can be hanilled via lond profiles.Systeiri users coordinate hila~crally i.e.,between supplicl. and re-cipicnt) lhc transmission servicc program schedules; pusitivc andncgijtivc injections iniist be balanccd.The supplier ;uid tlic rccipi-erit ca n pirss oi i their responsibility l i ir Llic nocification o f tlicirschedules to third partics such RS brokers, tradcrs, or marketers.Schedule deviatioiis nrepaitly handledvia systcni servicas; partlytlic supplier and recipient arc individually responsible for schcd-ulc deviation payments asafunction olthresholds. A l l spstein 01-c r a m s coticerned (transmission and distribution) nus st acccpi thehiinsmission service i i i ordcr Tor it to be valid; in case ordangcr tosccurily or reliability, servicc caii be rejected. Program valucs [orapprovcd ttntistnissioti serviccs c m be updated until ~ic ian dayahcail, an d updadng ot 'p-ogram values Inter than iiooii is admissi-ble i n cases of plant ontagcs.

Currelit DevelopmentsAlthough the tiutnber of conclirdcdopen access transxiiuiis TO-inaincd under 100tliiring 1998, many custoiriers had already in1998 usecl th e new opporttinilics provided by th e liiw to ;icliicvcsabstantial pr ice rediictioris. Starting in Jatiuiiry 1999, inanyInore custoincrs switchcrl suppliers either entirely 0 1 fo r part ol 'their l ud . n suriinier 1999, price reetluclions id- 1 0 % aticl morearrived at thc Ihoiischold customer level, and thc first nationaltiinrketiiig campaigns (or gaining tiousehulrl customers began.Thus, tlic numbcl of rtmsncrions is still rising fitsl, ancl th epower prices for al l customcl' c la~scs av e fallen substaniiallyalmady. The Enropean I'iicrgy Exchniige i n Frankfurt, on c nl 'LWU institutionalized power excliangcs in Gcnnnny, is to coin-iiiciicc opcm lious w ith futures in th c ycar 2000, I'nstering com-petitioii furhcr.

'['hc gcivcmnient's iliain reasons for Iclting thc market partici-pants jointly dcl'inc Lhc riilcx for network iiccess arc consistency;nit1 flcxihilily. Tbc Crcrmnti-wideagrccincnt prcvcrited 90O-plusdi Il'clent pricing systeim that wcrc Lhcoi'cticiIily possible othcr-wisc. Ilcing ii iwotninendation h a t itldi-csscs nctliods, not pricesthcnisclvcs, it iiii ityes tiatitll ng wiilmut cliiiiinnti112 flexibi ity.Th c ciit'reiit agreem etit was :ilrciidy vcry successfulat opening theinarkcl, hu t i n its application both thc lransniiasion and distribu-tion systcrli O ~ C I Y I ~ O C S ,nd :hi) the nclwwk i iscrs, were $.de toidcnlii'y nrens I'or iinpruvement, in particular i n the ease of hiiii-d i n g . A I icw version of the ;issucialions' agrccincnt ha s been inc-gotiated and was signctlon I 3 13ecemhcr1999.Thcdeclared goalis siriipler handling Ih rwgh reduced tninsaction de pe i~ le nc e ,ncti ieve d nut. through point-to-poi tit but contru -arca-tcr-cnn-tro1-are;i schcdulcs. This rlircctiun is consistelit with lh c Euro-p c a n - w i c k (IiscussioIls 011 i i i tcrriat iun; i l system access(Intcrnationnl Exchanges of lilcctricity; Gcncral Principles of theEwopcnn TrarisrnissionSystem Opcrators. Film1 Draft 26 April1999. http://www.curclcc~ric.org).GridCode changes wi I1 li kclybe necessary a s a rcsult ol: th e ncw ngreertient;these arc discusscdiri a new 30-mcmhcr T~~insniissionystem Consulti i t ion Coni-mittee with tlic iicw associatioils' agreement :ind iicw technical:iccess rules for thc GridCode.The Gcrmaii power inarket ha s become very dyniunic i n dcoinpetitivc, with many nc w entrants (German an d intcrna-tionid) active i n power trncling iinrl salcs.

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France Opens I t s Electricity Market jwntirnreLl01~ age I!)the past few years and is ready to face the coinpctilion in Francearid CiWry u11 with i t s dcvelopnient in L~iropc nd throughout th eworId.

Ti l 1998, ED F recorded ti gross iiicoinc 0 1 X. 1 billion Frenchfrancs (1.2 billion Euros), 15% highcr than the prior year. Thecompany's main inaaugeincnt indicators are positive;Gi'owlh ofsnle s rntide itpoxsihlc l omaintain the sales reeve-i iuc hgiirc at 185billion l+ench i'rnncs (28.2billion Euros),within n context of pricc rccltlctiuns (-4.6% n April 1997an d - 2 3% in May 1998)

e Re.tluc.tionof th e dcbi and l'innncinl costs0 Ne t cash flow up Ihy I I I L ) ~ ~han 10% to 49.2 billion Frcnchfrancs (7.5 bi Ilicin Euim) vcrsiis 43.8 bill iuu Frcnch I'rancsin 1997

e I'ayincnt (iI . I billion French fr;incs (0.47B billicm Euros)i n co~~pora icax and a contribution to the S i a ~moiititing10 2.9 billion Freench francs (0.444 billion Earos)

0 EDF invested I 1.1 billion French lrancs (1.7 billion Euros)i n equity ititerests ;ibroad.EDF, along with its parbicrs, is involved i n the operatioii o ldixlribucion cotnpan ies supply ing time Ihan !5 million custom-crs (3 0 million in France). It.a l s o ciinlributcs to building an d op-crating geiietatioti facilities with 21 capncily of over 15,UOI) MW,o r ihc cquivnlcnt of nearly 15 B o f Ihc installccl c.apac.ity inFrance.

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France Opens Its Electricity Market