The Finnish Parliament is currently discussing a proposal (HE 20/2013) for amendment to the Finnish electricity and gas market legislation. This proposal aims to transpose among others, the Electricity Market Directive 2009/72/EC concerning common rules for the internal market in electricity, which repeals Directive 2003/54/EC. The new Directive further strengthens the significant ground rules set down in the previous directive that required Member States to remove any conditions capable of distorting, restricting or preventing competition in energy markets.
The Finnish Electricity Market Act (386/1995) as amended by Law 1172/2004 contains provisions intended to ensure a competitive electricity market that provides beneficial and economically feasible conditions to providers and consumers alike, while also guaranteeing a sufficiently high quality supply of electricity. The present Electricity Market Act provides for the unbundling of services in the electricity market and ensures that the electrical grid can be accessed by all those who would like to use it. Through these provisions in the Finnish Electricity Market Act, Finland transposed the Directive 2003/54/EC in 2004.
Although the Directive transposed into Finnish law in 2004 provided for the unbundling of activities on the electricity market in legal and functional terms, at the European Union level it was felt that the functions of production and supply of electricity are not unbundled in a sufficiently effective manner.
In EU competition law matters, "interference with competition" is interpreted broadly. Even if the influence is small, it can still be considered to effect competition on a fiercely competitive market. A healthy, workable and competitive electricity market requires that the competing electricity commercial entities work in a commercially viable manner, independently from the grid owner—who is in a naturally monopolistic position. Impartiality of the grid owner also promotes adequate and impartial investment in the whole grid.
Amendments to Finnish law
The key changes in Finnish legislation required by the Electricity Market Directive 2009/72/EC concern ensuring effective unbundling in the electricity market, harmonising the authorities' duties and defining their competence and independence, imposing penalty fees for noncompliance, improving the security of the electricity supply, and improving the level of consumer protection in the electricity retail market.
Furthermore, according to the new proposal, vertically integrated operators shall not, especially in their communication and branding, create confusion in respect of the separate identity of the supply branch of the vertically integrated undertaking.
In Finland, Fingrid Oyj is responsible for the operational functioning of the main grid. The main grid serves power producers and consumers, enabling trade in electricity within and beyond Finnish borders. The ownership unbundling required by Directive 2009/72/EC of the main grid operator Fingrid Oyj has already been enforced between 2011 and 2012. In order to fully transpose the Electricity Market Directive, the changes will be recorded in Finnish legislation as well.
Supervision
The duties, competences and independence of the Finnish Energy Market Authority shall be harmonised in accordance with the requirements set forth in the Electricity Market Directive. The Directive proposes sanctions in the form of penalty fees for operators who do not comply with the law. In Finland, it is therefore proposed that the regime for punishment fines be based on rules similar to those in the Competition Act (948/2011). According to the proposal for the new "Laki sähkö- ja maakaasumarkkinoiden valvonnasta" (Electricity and Gas Market Supervision Act), the Energy Market Authority will have the competence to propose to the Market Court fines for non-compliance of up to the maximum of 10% of an infringing company's turnover.
The proposed law also aims to ensure that regulatory authorities are given competences allowing them to perform promptly and efficiently—and without unnecessary invasiveness—the functions required by the Electricity Market Directive. In this respect, the regulatory authorities should have the competence to request information from electricity companies, conduct investigations and make binding decisions, as well as define proportionate and effective measures to ensure compliance. Furthermore, national regulatory authorities must be able to cooperate with the Finnish Competition and Consumer Authority (Kilpailu- ja Kuluttajavirasto) and the Financial Supervisory Authority (Finanssivalvonta) or with the Commission when investigations concern compliance with competition law.
The legislative proposal that will transpose the Electricity Market Directive is being treated with urgency. The amendments to the existing laws and the new legislation are predicted to be put in place during 2013. Although, in practice, the provisions of the Directive have for the most part been observed in Finland, through these amendments, they will be enacted in the law, thus fully transposing Directive 2009/72/EC and better ensuring unhindered competition in the electricity market.
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