Implementation of EU Third Energy Package: Dutch legislation into effect

A bill implementing some of the contents of the EU Third Energy Package in Dutch law was passed by the upper house of the Dutch parliament on 10 July 2012, having been passed by the lower house on 28 February 2012. It should be noted that Dutch law is already in compliance with certain elements of the Package, particularly with regard to the unbundling of energy companies. The new legislation, which consists of amendments to the Electricity Act 1998 (Elektriciteitswet 1998) and the Gas Act (Gaswet), entered into effect on 20 July 2012.

EU Directive on greenhouse gas emission allowance trading scheme implemented in Dutch law

Directive 2009/29/EC of 23 April 2009 amending Directive 2003/87/EC so as to improve and extend the greenhouse gas emission allowance trading scheme of the Community has been implemented in Dutch law. The relevant legislation, consisting of amendments to the Environmental Management Act (Wet milieubeheer) and the Economic Offences Act (Wet op de economische delicten), was published on 8 May 2012 and contains rules supplementing the provisions of the Directive. Some of the new rules entered into force on 1 July 2012; others will do so on 1 January 2013. In connection with the amendments to the Environmental Management Act and the Economic Offences Act, amendments have also been made to – inter alia – the Emission Allowances (Trading) Decree (Besluit handel in emissierechten) and to the Ministerial Regulation on the Monitoring of Emission Allowances Trading (Regeling monitoring handel in emissierechten). This was done by decrees dated 16 May 2012 and 13 June 2012,  respectively.  

Allocation of greenhouse gas emission allowances in the Netherlands 2013-2020

On 4 July 2012, the National Greenhouse Gas Emission Allowances (Allocation) Decree (Nationaal toewijzingsbesluit broeikasgasemissierechten) was published in the Dutch Government Gazette (Staatscourant). This decree sets out the quantity of emission allowances that is allocated per year free of charge to the parties that are required to participate in the trading of greenhouse gas emission allowances over the period 2013-2020. Compared to previous years, there has been a reduction in the number of activities that are eligible for the free allocation of allowances. The most noteworthy change in this regard is that, with effect from 1 January 2013, electricity producers will no longer be entitled to free allowances. 

Buildings Decree 2012: requirement to connect to heating networks

One of the features of the Buildings Decree 2012 (Bouwbesluit 2012), which entered into effect on 1 April 2012, is that it lays down a requirement for certain categories of buildings to be connected to a heating network. Previously, this requirement was laid down in the municipal building regulations of various municipalities. With the decree's entry into effect, the relevant provisions in municipal building regulations have lapsed. A new development in this regard is that, under the Buildings Decree 2012, the "equivalence principle" is applicable to the abovementioned connection requirement. What this means is that the requirement does not apply if heating can be supplied using another method, provided that this method is equivalent to connection to a heating network. The municipal building regulations did not provide for such an option. Initially, several municipalities and heating companies expressed concerns about the application of the equivalence principle, stating that this would create uncertainty regarding the cost-effectiveness of investing in a heating network, as it would no longer be clear beforehand whether the minimum number of connections required to operate that network could be achieved. These municipalities and heating companies therefore requested the Ministry of the Interior and Kingdom Relations to elaborate on the connection requirement in such a way as to render the equivalence principle inapplicable, or to at least restrict its applicability. By contrast, project developers, housing companies and consumer organisations (the Woonbond and the Vereniging Eigen Huis) argued in favour of retaining the equivalence principle unchanged. To satisfy the interests of both sides, the Minister envisions a further substantiation that is intended to minimise the investment uncertainties as much as possible while retaining the advantages of applying the equivalence principle. The solution is as follows: the relevant municipality draws up a "heating plan" (with a maximum lifetime of 10 years), setting out the area to which the plan is applicable, the maximum number of connections required for a cost-effective utilization of the heating network and the extent to which the heating network is energy-efficient and environmentally protective. In order to be deemed equivalent to connection to a heating network – and therefore qualify for an exception under the Buildings Decree 2012 – an alternative method of supplying heat must, at a minimum, be as energy-efficient and environmentally protective as connection to a heating network.  

Nitrogen oxides emission allowances trading scheme to be abolished

The Dutch trading scheme for nitrogen oxides (NOx) emission allowances is to be abolished. This was  communicated by the State Secretary for Infrastructure and Environment in a letter to the lower house of Parliament dated 12 March 2012. A bill for this purpose will be submitted to the lower house later in the year. The trading scheme for NOx emission allowances, which was established in 2005, has never functioned satisfactorily and its abolition will lead to savings of EUR 7 million in administrative costs. The aim is for trading to cease in 2014.  

Composition of low-calorific gas over next decade and beyond

By a letter dated 12 March 2012, the Minister of Economic Affairs, Agriculture and Innovation informed the lower house of Parliament about the government's policy on the composition of low-calorific gas distributed via the national gas transport network. For the coming 10 years, the composition of such gas will remain unchanged. With regard to the period after 2021, the annex to the letter contains a table clarifying the permitted composition. The new composition of low-calorific gas may not lead to extra costs for consumers, however safety prevails. On the subject of gas-operated equipment sold to consumers, the Minister said that these should be "future-proof" and be capable of conversion for use with high-calorific gas without additional costs. Lastly, the Minister said that the aim was to prolong the abovementioned 10-year period (the period during which the current composition of low-calorific gas will remain unchanged). A ministerial regulation setting out the rules on the composition of gas was published in the Dutch Government Gazette on 12 June 2012 and has been submitted to Parliament.  

NMa introduces model energy contract for small users

On 3 April 2012, the NMa issued a decree setting out a model contract for the supply of electricity and gas to small users. Pursuant to Article 95na(2) of the Electricity Act 1998 and Article 52ca of the Gas Act, energy suppliers are required to offer to supply energy to small users under, in any event, a prescribed model contract. Offers may, in addition, be made under other forms of contract as the supplier sees fit. The model contract is intended to enable small users to easily compare the offers of different suppliers. The only difference is the price; all other contractual terms are the same. The NMa has opted for a model contract consisting of the following pre-determined – and largely standardised – components, to be sent together as a package:

  • the confirmation letter clearly setting out the most important elements of the contract;
  • the terms of the contract, setting out exactly the same information in the same order;
  • the general conditions, which are the same as the model conditions of Dutch energy industry association Energie Nederland;
  • the applicable tariffs;
  • the quality standards and the service conditions.

Tariffs may only be amended twice a year: on 1 January and on 1 July. Changes in tariffs must be communicated at least one week beforehand. The contract can be terminated by the user with notice at any time at no cost; the notice period required under the contract must be no more than 30 days. The model contract is applicable to all suppliers with effect from 1 July 2012. It will still be possible to make offers using other forms of contracts.  

European Commission Recommendation on preparations for the roll-out of smart metering systems

In this document, issued on 9 March 2012, the European Commission has set out extensive recommendations regarding (i) data protection and security, (ii) methodology for the economic assessment of the long-term costs and benefits for the roll-out of smart metering systems, and (iii) common minimum functional requirements for smart metering systems for electricity. EU member states must take all necessary measures to follow the recommendation and to draw it to the attention of all stakeholders involved in designing and operating smart grid applications within the EU. By 3 September 2012, they should have reported to the Commission on the results of their cost-benefit analysis regarding the roll-out of smart metering systems and on the measures and plans they have adopted in relation to the Recommendation. 

Interlocutory judgment by Supreme Court in three appeals by Dutch State regarding unbundling of energy companies

In an interlocutory judgment rendered on 24 February 2012, the Supreme Court of the Netherlands has decided to refer three questions on how EU law should be interpreted to the Court of Justice of the European Union ("CJEU"). The Supreme Court is of the opinion that answers to these questions are necessary for it to be able to come to a final decision on the appeals before it. The three questions can be summarised as follows:

  • Is the privatisation ban covered by "the system of property ownership" as referred to in the Treaty on the functioning of the European Union?
  • If so, is it correct that the rules on the free movement of capital are inapplicable in this case?
  • The aims of the Independent Network Management Act (Wet onafhankelijk netbeheer) are to make the  energy market transparent and to prevent interference with competition. Are the interests served by these aims purely economic in nature, or are they general interests which can justify a limitation on the free movement of capital?

These three questions go to the core of the matter. The first two questions pertain to the issue of whether the group ban and the ban on side activities are even subject to the rules on the free movement of capital. After all, the unbundling Act provides that the shares in a network manager must be entirely in public hands (whether  directly or indirectly), whereby private investors are precluded from in any way investing in network managers. In posing the first two questions, the Supreme Court wishes to obtain clarity from the CJEU on the extent to which such an absolute privatisation ban falls within the scope of applicability of the rules on the free movement of capital. The third question is relevant in the event that the CJEU decides that the group ban and the ban on side activities are indeed subject to the abovementioned rules. The question then is whether the interests of promoting the transparency of the energy market and preventing interference with competition can justify a limitation on the free movement of capital. 

Dispute between Eneco and Municipality  of Rotterdam regarding costs of moving pipes

On 28 December 2011, the Court of Appeal of The Hague rendered a judgment in the dispute between the  Municipality of Rotterdam and Eneco over the question of who should bear the costs of moving certain pipes (the instruction to move the pipes was given by the Municipality). The court ruled that by virtue of the transfer of the Municipality's energy-related activities to Eneco's legal predecessor in 1992, Eneco acquired a right of superficies (opstalrecht) in respect of the pipes and that this right consists not only of ownership of the pipes, but also of a right to have the pipes situated in the relevant location (a right in rem referred to in the judgment as a "ligrecht"). The court issued a declaratory judgment stating (inter alia) that the parties had agreed that the costs of moving cables and pipes would be borne entirely by the party that had caused the relevant object(s) to be moved.

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