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

This article contains an examination of the exemption from paying transport charges for producers, under European Union sector specific regulation and the European Union state aid rules. In the Netherlands and several other EU Member States, the energy authorities have decided that producers of electricity will not be charged for using the electricity network for transportation. These energy authorities are responsible for setting the tariffs and the related methodologies. The charges are meant to be paid to the network operator and thereby ensure that this network operator can recover the costs that are made to provide the service of transport to users of the network. Both producers and consumers are users of the network. Producers inject electricity that will be transported to consumers. These consumers take the electricity off the network. This article assesses whether exempting producers from contributing to the payment of these charges, can be considered legitimate under European Union law. First, the relevant provisions from the Third Energy Package are assessed. This legislative package does not contain provisions containing strict rules with regard to the allocation of transport tariffs on the electricity market. It does however contain the principle of non-discrimination. Whether or not this principle is infringed by the measure containing the exemption is doubtful. Secondly, the exemptions will be tested under the EU state aid doctrine. Whether or not the state aid rules are infringed by the exemption will depend of the interpretation of the specific elements of the state aid rules. Applying a broad interpretation of the state aid conditions will lead to the conclusion that the measures containing the exemption can constitute unlawful state aid as prohibited by the Treaty. Nevertheless, it is not that convincing that this conclusion would be the same if these conditions would be interpreted in a more strict way. It would thus be useful to notify the measures to the European Commission, in order for them to carry out investigations.