Overview of EU Transmission Regulation

The principles for regulatory control and financial reward for infrastructure investment were established by the European Council of Energy Regulators in a March 2003 paper, "Principles of Regulatory Control and Financial Reward for Infrastructure". The paper established eight principles:

1. Governments should encourage investment in electricity transmission infrastructure to implement the internal energy market, facilitate efficient competition and safeguard security of supply. Public authorities should maintain oversight of infrastructure decisions in order to promote both security of supply and network efficiency;
2. Transmission system operators (TSOs) must manage their networks in an efficient manner;
3. Public authorities should establish transparent, non-discriminatory and standardised options for the development of infrastructure and aim as far as possible to minimise regulatory risks;
4. Public authorities should enforce a procedure for the publication of TSO infrastructure plans;
5. TSOs must be effectively unbundled to ensure that there is no conflict of interest when making investment decisions and to ensure there are sufficient incentives to provide fair third party access;
6. Public authorities should establish the regulatory regime for national and cross-border investments. Merchant infrastructures should be decided on a case-by-case basis and should continue to be subject to ex-ante regulatory control;
7. Public authorities should guarantee that procedures applicable to granting required licences for new investment in electricity networks are non-discriminatory and efficient;
8. Swifter, more expeditious administrative authorisation procedures are required for infrastructure development, particularly those for interconnection infrastructure.