EU-Commission - Ownership unbundling TSO's
The commission's practice in assessing the presence of a conflic of interest including in case of financial investors
The Electricity Directive and the Gas Directive of the Third energy package have introduced a structural separation between transmission system operator activities on the one hand, and generation, production and supply activities on the other hand. The aim of these provisions on "unbundling" of networks is to avoid conflicts of interest and to make sure that transmission system operators ("TSOs") take their decisions independently, ensuring transparency and non- discrimination towards all network users. This is not only relevant for the day-to-day operational decisions of TSOs, but also for their strategic investment decisions.
The present document highlights the Commission's practice in dealing with certain aspects of the rules on unbundling of TSOs, as laid down in the Electricity and Gas Directives. The focus is on the application of the rules on ownership unbundling. In particular, the issue is addressed how the rules on ownership unbundling as set out in Article 9 of the Directives are to be appliedin situations where a shareholder in a TSO also has participations in generation, production and/or supply activities, while it can be demonstrated that in the specific circumstances of the case there is no incentive for this shareholder to influence the decision making in the TSO with the intention to favour his generation, production and/or supply activities to the detriment of other network users.
According to the Commission's experience in the application of the ownership unbundling rules this issue may arise, for instance, in case a holding company of a TSO at the same time has participations in certain generation, production and/or supply activities. Also different types of investors could be confronted with this question, for example financial investors such as pension funds, insurance companies and infrastructure funds with participations in the energy sector. Such financial investors often have diversified portfolios including participations in energy transmission, generation, production and/or supply activities, located in different places. 
The aim of the present paper is hence to illustrate how the rules on ownership unbundling of the Electricity and Gas Directives have been interpreted and applied by the Commission in the context of the certification procedure of TSOs. However, it is noted that the present document is not legally binding. Giving binding interpretation of European Union law is ultimately the role of the European Court of Justice.
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