(Opinion of the Advocate-general N. JÄÄSKINEN in Case C-198/12, Commission v. Bulgaria)

 

Alexander Galendinov [1]

 

 

The Bulgarian energy market continues to attract the attention of the European Commission. In December 2012 the Directorate General for Competition opened antitrust proceedings against Bulgarian Energy Holding (BEH) for alleged abuse of its dominant position on the Bulgarian electricity wholesale market[2]. In July 2013 proceedings were opened in relation to BEH’s business practices on the Bulgarian gas market[3]. Meanwhile, it became known that on 26 April 2012, the European Commission lodged an application at the Court of Justice in an action against Bulgaria for failure to fulfil obligations arising from Regulation № 715/2009[4], which is part of the Third Energy Package. According to the Commission, Bulgaria has failed to implement the obligation for the transmission system operator (TSO) – Bulgartransgas, to provide services for virtual reverse flow of gas.

On 14 November 2013 advocate general Jääskinen delivered his opinion. Following the finding that the Commission’s application is admissible, the advocate general focuses on Commission’s contention that the combined reading of Article 16 and Article 14(1) of Regulation No 715/2009, includes a requirement to provide backhaul on a virtual basis. He points out that, neither Regulation No 715/2009 nor its predecessor – Regulation No 1775/2005, make an express reference to an obligation on TSOs to provide virtual reverse haul gas transmission services. He also states that even though that paragraph 5 of Article 16 of Regulation No 715/2009 implicitly refers to the creation of new transmission capacities by means of new investments, the demand for which the TSO is obliged to regularly assess, this provision clearly relates to technical capacity of the network and does not include any legal obligation to increase such capacity. As to the duty of non-discrimination laid down by Article 14(1), it does not require a TSO to provide new services. It simply requires it to abstain from discriminating between the network users in the provision of its existing services. As to Regulation’s objectives, Mr Jääskinen states that there does not seem to be any indication in the travaux preparatoires of either Regulation No 1775/2005 or Regulation No 715/2009, to show that an obligation to provide backhaul in the form of virtual reverse flow service was encapsulated in either of these regulations. In any case, it is recalled that according to the case-law, the Court cannot, in the face of clear and precise wording of an EU legislative act, interpret the provision with the intention of correcting it and thereby extending the obligations of the Member States relating to it. Therefore, the advocate general concludes that the Court should dismiss the Commission’s action.

Even though that the Court will most probably follow the opinion of its advocate general, it is not excluded that the Bulgarian TSO, controlled by BEH, may ultimately be compelled to provide service for virtual reverse flow of gas. More specifically, the antitrust gas investigation against BEH might end following a commitment decision includingrequirement for the TSO to provide gas backhaul on virtual basis.

In this case the Commission might achieve a result which goes beyond the existing regulatory framework, just as it did before, during the antitrust electricity investigation against E.ON[5]. In the latter case E.ON committed to divest its high-voltage electricity grid even before the adoption the Third Energy Package separating companies’ generation and sale operations from their transmission networks. Commission’s determination to achieve its goals should not be underestimated, as shown by the Greek lignite case[6] where regardless of the General Court’s ruling[7] the Republic of Greece was ultimately obliged to grant access to its lignite deposits though within the framework of the EU/ IMF bailout package[8].

Finally, should the Court disagree with its advocate general, it will have to ascertain the reasons which prevented the Republic of Bulgaria from supplying virtual reverse flow gas services. One of those reasons would be the series of agreements concluded with the USSR in 1986, and subsequently. If that is the case, according to the Commission, the agreements should be renegotiated[9] as it has recently stated in relation to South Stream gas pipeline project[10].

 

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Към статията на български език: ПОНЯТИЕТО ВИРТУАЛЕН ПРЕНОС НА ГАЗ В ОБРАТНА ПОСОКА И НЕГОВОТО ВЪЗМОЖНО ВЛИЯНИЕ ВЪРХУ БЪЛГАРСКИЯ ГАЗОВ ПАЗАР

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[1]Master in Laws, University Paris 1 Panthéon-Sorbonne. The statements and opinions expressed in this articleare those of the author and they not represent the official position or interest of any public or private entity.

[2]Commission press release, “Commission opens proceedings against Bulgarian Energy Holding”(IP/12/1307), 03/12/2012

[3] Commission press release, “Commission opens proceedings against Bulgarian Energy Holding and its subsidiaries Bulgargaz and Bulgartransgaz” (IP/13/656), 05/07/2013

[4] OJ 2009 L 211, p. 36. See also corrigendum to Regulation (EC) No 715/2009 of the European Parliament and of the Council of 13 July 2009 on conditions for access to the natural gas transmission networks and repealing Regulation (EC) No 1775/2005, OJ 2009 L 229, p. 29

[5]COMP/39.388 – German electricity wholesale market, 26/11/2008

[6]COMP/38.700 – Greek lignite and electricity markets, 05/03/2008

[7]Judgment of the General Court, 20 September 2012, T‑169/08

[8] International Monetary Fund, Country Report No. 13/20, January 2013, APPENDIX VII. GREECE—MEMORANDUM OFUNDERSTANDING ON SPECIFIC ECONOMIC POLICYCONDITIONALITY,6.1.2 Provisions regarding the privatisation of PPC and DESFA

[9]Official Journal of the European Union, C 194/15, 30.06.2012

[10]“South Stream bilateral deals breach EU law, Commission says”, article, 4 декември 2013, EurActiv.com