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A Case Study on Flemish Electricity and Gas Regulation

Explore the EU Directive, Flemish Legislation, and the role of VREG in ensuring fair competition, market efficiency, and consumer protection in the electricity and gas sector in Flanders.

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A Case Study on Flemish Electricity and Gas Regulation

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  1. The Flemish Regulator for the Electricity and Gas Market (VREG) A Case-Study in Light of GATS PrinciplesSome Views on Potential Disciplines Mr. Ludo Deckers - Prof. Jan Wouters WTO Workshop on Domestic Regulation Geneva, March 29-30, 2004

  2. Part I The Flemish Regulator for the Electricity and Gas Market (VREG) A Case-Study in Light of GATS Principles Mr. Ludo Deckers, VREG

  3. EU Directive 2003/54 (electricity)(similar for natural gas) Scope Common rules for generation, transmission, distribution and supply of electricity • organisation and functioning of the electricity sector • Grid operators vs suppliers/generators • Published tariffs for grid access • access to the market • criteria and procedures applicable to calls for tenders • granting of authorisations • operation of systems.

  4. Basic Principles of EU Directive (I) • Competitive, secure and environmentally sustainable market without discrimination between undertakings • EU Member States may impose public service obligations But: clearly defined, transparent, non-discriminatory, verifiable and equal access suppliers to customers

  5. Basic Principles of EU Directive (III) • Installation of a Regulator for ensuring non-discrimination, effective competition and the efficient functioning of the market • Measures on consumer protection

  6. Flemish Legislation (I) Electricity and Natural Gas Decrees (2000-01) • Overall objective: reconcile liberalization with • public service obligations • objectives of social and environmental policy

  7. Flemish Legislation (II) • Public service obligations • Minimum supply of electricity • (limited)Free electricity for households • Environment-friendly electricity • Rational use of energy • One invoice • Universal service obligation for connection to distribution grid for electricity

  8. Functions of VREG (I) • Advice to Flemish Government • Supervision compliance with Flemish rules • Attribution and observance of supply licences • Designation and observance of distribution grid operators

  9. Functions of VREG (II) • Definition and observance technical grid codes for distribution grids • Supervision compliance with public service obligations by suppliers and distribution grid operators • Issue of Green Certificates, development and observance of market • Mediation/settlement of disputes on access to distribution

  10. Functions of VREG (III) • Observance Flemish energy market in a European context • Observance behaviour and positioning of market parties • Observance development of competition and, if necessary, guiding this process • Instrument: VREG Market Reports

  11. Part II Some Views regarding Potential Disciplines on Domestic Regulation Prof. Jan Wouters, KU Leuven

  12. Domestic Disciplines and Regulated Industries (I) • Specific features of regulated industries, e.g. electricity/natural gas energy sector • network sectors; natural monopolies; access concerns • universal service concerns • environmental policy concerns

  13. Domestic Disciplines and Regulated Industries (II) • How to define “energy services” for GATS purposes? e.g. • exploration/production • construction of energy facilities • networks • supply • final use

  14. Domestic Disciplines and Regulated Industries (III) • How to apply principles of domestic regulation to regulated industries? • transparency • necessity • equivalency • technical standards • impartiality

  15. Domestic Disciplines and Regulated Industries (IV) • How to reconcile these principles with • public service obligations • objectives of social and environmental policy

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