Last updated on : 2007/07/06
The powers vested upon CRE by the laws of 10 February 2000 and of 3 January 2003 are part of the range of powers generally devolved upon independent administrative authorities responsible for regulating a market or a sector that is opening up to competition.
The powers of CRE relate above all to systems management: CRE approves the annual investment programme of the public transmission system operator; it grants temporary exemptions to companies who are authorised to supply natural gas when they encounter serious economic and financial difficulties due to long-term contractual commitments, by authorising them the right to refuse to conclude, under certain terms, a contract of access to natural gas distribution and transmission facilities or to liquefied natural gas facilities (art.6-II of the law of 3 January 2003).
CRE also has powers regarding the account unbundling of integrated operators' activities: it approves the application rules, the account perimeters and the account unbundling principles (art.25 of the law of 10 February 2000, art.8 of the law of 3 January 2003). In terms of electricity, it also chooses the responsible independent bodies, when it decides to do so, for auditing the accounts of operators who have public service responsibilities (art.5-I of the law of 10 February 2000).
CRE also has powers regarding the account unbundling of integrated operators' activities: it approves the application rules, the account perimeters and the account unbundling principles (art.25 of the law of 10 February 2000, art.8 of the law of 3 January 2003). In terms of electricity, it also chooses the responsible independent bodies , when decides to do so , for auditing the accounts of operators who have public service responsibilities (art.5-I of the law of 10 February 2000).
Finally, in compliance with legislative and regulatory standards, CRE may, as concerns electricity, make regulatory decisions in several areas: missions of system operators, rules of connecting to systems, conditions of access and use of systems, programmes of appeal and balancing, system access contracts and protocols and principles of account unbundling (art.37 law of 10/2/2000).
The concerned parties (except non-eligible customers) may refer any dispute relating to access to public transmission or electricity distribution grids, transmission of natural gas distribution networks and LNG or natural gas storage facilities to CRE. After a due process investigation, and a possible inquiry, the Commission will decide within 2 months (or longer if necessary) on the settlement of disputes. A request for protective measures may simultaneously be submitted to it.
Its decisions may be contested before the Court of Appeal in Paris, which may order an enforcement stay.
CRE, after due process proceedings resulting in a formal notice, may have to impose penalties in the event of violation of legislative or regulatory rules or resulting from its decisions, relating in particular to:
the access or use of public electricity grids, transmission and natural gas distribution facilities or LNG;
to principles of account unbundling;
to rules of making accounts available.
CRE may also impose penalties, without prior notice, in the event of non-compliance with its decisions regarding the settlement of disputes.
Two types of penalty are provided for:
prohibiting access to electrical grids or to natural gas facilities for one year at the most;
a financial penalty, if the circumstances do not constitute a criminal offence, depending on the circumstances, equivalent to a maximum of 3% of the turnover of the party liable for the breach (increased to 5% if the offence is repeated) and limited to the highest ceilings of the penalty incurred, in the event of a plurality of administrative penalties.
The penalty decisions may be contested before the Conseil d'Etat (French Council of State, acting as the highest administrative court) , ruling as lower court and as a final court of appeal and a stay enforcement request may be made. However, if the penalty is financial, the claim on merits has a full right suspensive character.
CRE has, on certain points, a greater power than that which it exerts, not in the form of decisions, but through proposals, particularly with regard to:
rates for the use of public electricity grids, natural gas networks and LNG facilities rates (art. 4 of the law of 10 February 2000 and art.7 of the law of 3 January 2003);
in terms of the electricity public service, the annual amount for expenses chargeable to public service missions, the amount for the contribution applicable per kilowatt/hour and the amount of refunds that operators with public service responsibilities receive (art.5-I of the law of 10 February 2000);
the necessary protective measures for ensuring the security and safety of public electricity grids and guaranteeing the quality of their operation (art.21 of the law of 10 February 2000).
CRE annually publishes a report on compliance with the codes of conduct by operators of transmission and electricity and gas distribution systems, as well as an assessment on their independence. It proposes, as necessary, measures that will guarantee the independence of these operators.
CRE is entitled to a very wide right of access to information held or drafted by both players on the natural gas and electricity markets and by the authorities.
In addition, it may open inquiries conducted by authorised agents, who may gather information from documents and on the spot under conditions that comply with the adversary principle and, in certain cases, after authorisation by the judicial authority.
Regarding electricity generation, CRE conducts calls for tenders intended for the implementation of the long term programme of generation investments. However, the minister for energy is responsible for making decisions to carry out these calls for tenders. CRE is responsible for the application and drafting of specifications; it sorts the results and issues a reasoned recommendation on the basis of which offers are selected. The minister then appoints the selected applicant(s) (art. 8 of the law of 10 February 2000).
Many decrees and draft ministerial orders are submitted to CRE for recommendation:
either by an express measure (rate measures, purchase terms of electricity produced as part of the purchase obligation, specifications of the public transmission system operator, development outline of the public electricity transmission grid, refusal of direct lines, exemptions from rates and commercials terms for the use of natural gas facilities or LNG facilities, rates of the rate contribution for financing IEG retirement funds, etc.);
or by a general measure (recommendation on all texts relating to the access or use of public electricity grids, natural gas facilities and LNG facilities) (art. 31 of the law of 10 February 2000).
Moreover the minister for energy consults CRE when a request for a temporary exemption from third party access obligations to an LNG or natural gas storage facility or interconnection facility with a gas transmission network situated within another Member State of the European Community, is referred to the minister (art. 7-1 of the law of 3 January 2003).