National regulatory authorities (NRAs) play a key role in supervising and regulating competition in the energy markets and for realizing the transition to a low carbon energy system in the European Energy Union. They have to ensure that energy (service) markets can develop and that consumers can reap the benefits by having a real choice between competing alternatives for renewable energy supply and/or demand response contracts. Current European provisions require that NRAs should be sufficiently independent from politics and from market parties to ensure that they can exercise their powers in a consistent and effective way. Also, the discretionary (regulatory) powers of the NRAs– including establishing tariffs and the conditions for access to energy systems – have been greatly expanded and will continue to expand after the adoption of the Clean Energy Package. Furthermore, EU law has strengthened and institutionalized the former rather informal cooperation between the national authorities by establishing an European agency, namely, the Agency for the Cooperation of Energy Regulators. However, recent reports show that Member States are reluctant to grant adequate discretionary powers and independence to NRAs. This reluctance can be traced back to the fundamental question; to what extent are the European independence requirements consistent with national constitutional principles, such as the democracy principle and the principle of legality? In the Netherlands, for example, these principles tend to be interpreted in a strict way preventing the delegation of broad discretionary powers to independent authorities. This contribution argues that the European development of the creation of independent NRAs with discretionary powers may be reconciled with the interpretation of national constitutional principles, provided that the exercise of powers is subjected to adequate European and national checks and balances. By looking at other sectors, such as the supervision of the General Data Protection Regulation, some suggestions are provided as to how these checks and balances may develop to ensure an effective and impartial functioning of national energy regulatory authorities in the Energy Union.
- national regulatory authorities
- discretionary powers
- good governance