Electricity – Supplier – Licence - Single Licence
Setting: the obligation imposed by European Law
With the objective of promoting the establishment of an internal market for electricity, the European legislator adopted Directive 2009/72/EC of the European Parliament and of the Council of 13 July 2009 concerning common rules for the internal market in electricity and repealing Directive 2003/54/EC (hereinafter “Electricity Directive”).
The Electricity Directive does not explicitly provide for a ‘single licence’-mechanism for electricity suppliers on the basis of which an electricity supplier that is registered in one Member State of the European Economic Area (EEA) can freely operate within one or more other Member States without having to pass the whole licensing or registration process if such a process is foreseen for the supply of electricity. In fact, the Energy Directive does not provide a general framework related to the registration or authorisation of electricity suppliers.
The Electricity Directive contains however, amongst others, a provision that pertains to the right of costumers to have their electricity provided by electricity providers regardless of the Member State in which these are registered.
Indeed, article 3, (4) of the Electricity Directive stipulates that:
“Member States shall ensure that all customers are entitled to have their electricity provided by a supplier, subject to the supplier’s agreement, regardless of the Member State in which the supplier is registered, as long as the supplier follows the applicable trading and balancing rules. In this regard, Member States shall take all measures necessary to ensure that administrative proceedings do not discriminate against supply undertakings already registered in another Member State.”
This provision primarily deals with ensuring the right of consumers to contract with the electricity supplier of their choosing.
Such a right for customers to freely choose between electricity suppliers can only be effective if electricity suppliers are free to operate in a Member State of the EEA other than that in which they are registered.
The last sentence of the aforementioned provision does contain in this respect the obligation for Member States to ensure that their administrative procedures do not constitute a barrier to entry by, for example, requiring the fulfilment of licensing requirements that already have been met elsewhere. Not complying with this obligation constitutes, it could be argued, discrimination and a limitation on the principle of free movement of services (including the right of establishment) as laid down by the Treaty on the Functioning of the European Union and the Directive 2006/123/EC of the European Parliament and of the Council of 12 December 2006 on services in the internal market (the “Services Directive”).
Transposition of the obligation by the Belgian legislators
The Flemish legislator transposed article 3, (4) of the Electricity Directive by implementing a ‘single licence’-system: according to article 4.3.1, § 1, first paragraph of the Decree of 8 May 2009 on the general provisions concerning energy policy (BS 7 July 2009, 46145) electricity suppliers authorised by the federal Belgian government (in the context of supply on the transmission grid), by another Belgian Region (i.e. the Walloon Region or the Brussels Capital Region in the context of supply on the distribution grid) or by another EEA-Member State are allowed to supply energy to customers in the Flemish Region.
The legislator of the Brussels Capital Region did not install a ‘single licence’-system, but ensured that the instituted administrative proceeding does not discriminate between electricity suppliers by implementing a simplified procedure for electricity suppliers authorised by the federal Belgian government, by another Belgian Region (i.e. the Flemish Region or the Walloon Region) or by another EEA-Member State. According to article 7ter, § 1 of the Decision of the Brussels Capital Government of 18 July 2002 on the criteria and procedure for granting, renewing, transferring and revoking the licence for the supply of electricity (BS 6 November 2002, 50217), a licence is granted to an applicant that already possesses a licence granted by the federal Belgian government, another Belgian Region or by another EEA-Member State if the applicant provides:
- a copy of said licence;
- a detailed organigram of its activities in Belgium;
- a description of the measures it has taken to install a service to deal with complaints; and
- a development plan for their activities in the Brussels Capital Region.
Up until now, the Walloon legislator had failed to transpose article 3, (4) of the Electricity Directive. The Walloon Government indeed did not yet use the competence to install a simplified procedure for electricity suppliers authorised by the federal Belgian government, by another Belgian Region (i.e. the Flemish Region or the Brussels Capital Region) or by another EEA-Member State which it had been delegated by article 30, § 4, second paragraph of the Decree of 12 April 2001 on the organisation of the regional electricity market (BS 1 May 2001, 14144).
The federal Belgian legislator did not transpose article 3, (4) of the Electricity Directive by installing a ‘single licence’-mechanism or a simplified procedure. Instead, article 18, § 1, third paragraph of the law of 29 April 1999 on the organisation of the electricity market (BS 11 May 1999, 16264) only imposes on the authorising authority, i.e. the Belgian minister competent for Energy, to “take into account” any licence granted by a Belgian Region or another EEA-Member State when granting a licence. However, no further details are provided as to how these licences are to be taken into account. In addition, the guidelines of the CREG, who has been assigned the task to formulate a proposal of decision to the minister, also provide no further information on this matter.
A new simplified procedure for the Walloon Region
A simplified procedure has now been foreseen by article 14 of the decision of the Walloon Government of 7 July 2016 (BS 25 July 2016, 45584), that adds a new article 16quinquies to the decision of the Walloon Government of 21 March 2002 on the licence for the supply of electricity. According to this provision, a supplier licensed by another Belgian Region or another EEA-Member State is deemed to have fulfilled the licensing requirements pertaining to the decency, the professional experience, the financial means and the organisational capacity of the applicant.
It should be noted that this presumption of fulfilment of the licensing requirements does not mention licences granted by the Belgian federal government. However, when setting forth the conditions (e.g. providing a copy of the licence) that have to be fulfilled in order to enjoy the presumption of fulfilment, the provision does mention the licence granted by the Belgian federal government. In light of the transposition of article 3, (4) of the Electricity Directive by the other Belgian legislators, it seems that suppliers licensed by the federal Belgian government should also enjoy the presumption of fulfilment of the licensing requirements .
The presumption of fulfilment of the licensing requirements is not absolute. The CWaPE can oblige the applicant to prove the fulfilment of one or more licensing requirements by delivering the necessary evidence if the situation of the applicant so requires. As this constitutes an exemption, the CWaPE would need to motivate why the specific situation requires a deviation from the presumption of fulfilment of the licensing requirements.
Conclusion
Following the newly installed simplified procedure for the Walloon Region, only the federal legislator seems to be failing to adequately transpose article 3, (4) of the Electricity Directive in absence of clear and transparent indications on how previously granted licences should be taken into account in the context of an application for a licence as supplier on the transmission grid.
Therefore, to the extent imposing a licence obligation is considered justifiable for the activity of electricity suppliers, a modification of the Royal Decree of 2 April 2003 on the licences for the supply of electricity by intermediaries and on the rules of conduct applicable to them (BS 22 April 2003, 21245) seems necessary to secure transparent and equal licensing conditions. At the very least, the guidelines of the CREG should be adapted in order to indicate how previously granted licences will specifically be taken into account.
