A Legal Assessment of the Producer Exemption from Transport Tariffs under EU Law

Abstract

This article examines the producer exemption from paying transport charges in the light of European Union sector specific regulation and the European Union state aid rules. In the Netherlands and several other EU Member States, the ministries and/or the energy authorities have decided that producers of electricity will not be charged for using the electricity network for the transport of electricity. These charges have to be paid to the network operator and thereby ensure that this network operator can recover the costs that are made to provide the transport service to the users of the network. EU law assumes that both producers and consumers are users of the electricity network. This article assesses whether exempting producers from contributing to the payment of the transport charges for using the electricity network is legal under European Union law. First, the relevant provisions from the Third Energy Package are examined. This legislative package does not provide strict rules with regard to the allocation of transport tariffs on the electricity market. It does however contain the principle of non-discrimination. The exact contours of this principle have not yet crystalized and it raises questions whether or not it is infringed by the producer exemptions. Secondly, the exemptions will be tested under the EU state aid doctrine. It is controversial whether or not the state aid rules are infringed by the exemption, as this will depend on the exact interpretation (broad or narrow) of the specific elements of the state aid rules. It would thus be useful that the Member States involved notify the measures to the European Commission, urging the latter to give more clarity on the legality of the producer exemption in the light of EU Law.