Contents
Judgment of the Court (Tenth Chamber)3 December 2020note(Failure of a Member State to fulfil obligations — Directives 2009/72/EC and 2009/73/EC — Internal market in electricity and natural gas — Effective separation between the operation of electricity and gas transmission networks, on the one hand, and supply and generation activities, on the other hand — Establishment of independent national regulatory authorities)In Case C‑767/19,ACTION under Article 258 TFEU for failure to fulfil obligations, brought on 17 October 2019,European Commission, represented by O. Beynet and Y.G. Marinova, acting as Agents,vKingdom of Belgium, represented by L. Van den Broeck, M. Jacobs and C. Pochet, acting as Agents, and by G. Block, avocat,THE COURT (Tenth Chamber),composed of E. Juhász, acting as President of the Chamber, C. Lycourgos (Rapporteur) and I. Jarukaitis, Judges,Advocate General: G. Pitruzzella,Registrar: A. Calot Escobar,having regard to the written procedure,having decided, after hearing the Advocate General, to proceed to judgment without an Opinion,gives the following
Judgment
1By its application, the European Commission requests the Court to declare that the Kingdom of Belgium has failed to fulfil its obligations under Directive 2009/72/EC of the European Parliament and of the Council of 13 July 2009 concerning common rules for the internal market in electricity and repealing Directive 2003/54/EC (OJ 2009 L 211, p. 55), and under Directive 2009/73/EC of the European Parliament and of the Council of 13 July 2009 concerning common rules for the internal market in natural gas and repealing Directive 2003/55/EC (OJ 2009 L 211, p. 94), by failing correctly to transpose:– Article 9(1)(a) of each of Directives 2009/72 and 2009/73;– Article 37(4)(a) and (b) of Directive 2009/72 and Article 41(4)(a) and (b) of Directive 2009/73;– Article 37(6)(a) to (c) and (9) of Directive 2009/72 and Article 41(6)(a) to (c) and (9) of Directive 2009/73, and– Article 37(10) of Directive 2009/72 and Article 41(10) of Directive 2009/73.
Legal framework
European Union law
2Recitals 9, 11, 34, 37 and 61 of Directive 2009/72 state:(9) Without effective separation of networks from activities of generation and supply (effective unbundling), there is an inherent risk of discrimination not only in the operation of the network but also in the incentives for vertically integrated undertakings to invest adequately in their networks.…(11) Only the removal of the incentive for vertically integrated undertakings to discriminate against competitors as regards network access and investment can ensure effective unbundling. Ownership unbundling, which implies the appointment of the network owner as the system operator and its independence from any supply and production interests, is clearly an effective and stable way to solve the inherent conflict of interests and to ensure security of supply. For that reason, the European Parliament, in its resolution of 10 July 2007 on prospects for the internal gas and electricity market [(2007/2089(INI) (OJ 2008 C 175 E, p. 206)] referred to ownership unbundling at transmission level as the most effective tool by which to promote investments in infrastructure in a non-discriminatory way, fair access to the network for new entrants and transparency in the market. Under ownership unbundling, Member States should therefore be required to ensure that the same person or persons are not entitled to exercise control over a generation or supply undertaking and, at the same time, exercise control or any right over a transmission system operator or transmission system. Conversely, control over a transmission system or transmission system operator should preclude the possibility of exercising control or any right over a generation or supply undertaking. Within those limits, a generation or supply undertaking should be able to have a minority shareholding in a transmission system operator or transmission system.…(34) Energy regulators need to be able to take decisions in relation to all relevant regulatory issues if the internal market in electricity is to function properly, and to be fully independent from any other public or private interests. ……(37) Energy regulators should have the power to issue binding decisions in relation to electricity undertakings and to impose effective, proportionate and dissuasive penalties on electricity undertakings which fail to comply with their obligations or to propose that a competent court impose such penalties on them. Energy regulators should also be granted the power to decide, irrespective of the application of competition rules, on appropriate measures ensuring customer benefits through the promotion of effective competition necessary for the proper functioning of the internal market in electricity. The establishment of virtual power plants – electricity release programmes whereby electricity undertakings are obliged to sell or to make available a certain volume of electricity or to grant access to part of their generation capacity to interested suppliers for a certain period of time – is one of the possible measures that can be used to promote effective competition and ensure the proper functioning of the market. Energy regulators should also be granted the power to contribute to ensuring high standards of universal and public service in compliance with market opening, to the protection of vulnerable customers, and to the full effectiveness of consumer protection measures. Those provisions should be without prejudice to both the Commission’s powers concerning the application of competition rules including the examination of mergers with a Community dimension, and the rules on the internal market such as the free movement of capital. The independent body to which a party affected by the decision of a national regulator has a right to appeal could be a court or other tribunal empowered to conduct a judicial review.…(61) … National regulatory authorities should report to the competition authorities and the Commission those Member States in which prices impair competition and proper functioning of the market.’
3Article 5 of that directive provides:‘The regulatory authorities where Member States have so provided or Member States shall ensure that technical safety criteria are defined and that technical rules establishing the minimum technical design and operational requirements for the connection to the system of generating installations, distribution systems, directly connected consumers’ equipment, interconnector circuits and direct lines are developed and made public. Those technical rules shall ensure the interoperability of systems and shall be objective and non-discriminatory. The Agency may make appropriate recommendations towards achieving compatibility of those rules, where appropriate. Those rules shall be notified to the Commission in accordance with Article 8 of Directive 98/34/EC of the European Parliament and of the Council of 22 June 1998 laying down a procedure for the provision of information in the field of technical standards and regulations and of rules on Information Society services [(OJ 1998 L 204, p. 37)].’
4Article 9(1)(a) and (8) of Directive 2009/72 provides:1.Member States shall ensure that from 3 March 2012:(a) each undertaking which owns a transmission system acts as a transmission system operator ……8.Where on 3 September 2009, the transmission system belongs to a vertically integrated undertaking a Member State may decide not to apply paragraph 1.In such case, the Member State concerned shall either:(a) designate an independent system operator in accordance with Article 13; or(b) comply with the provisions of Chapter V.’
5Article 10(2) of that directive provides:‘Undertakings which own a transmission system and which have been certified by the national regulatory authority as having complied with the requirements of Article 9, pursuant to the certification procedure below, shall be approved and designated as transmission system operators by Member States. …’
6According to Article 17(1)(a) of that directive, contained in Chapter V thereof, entitled ‘Independent transmission operator’:‘Transmission system operators shall be equipped with all human, technical, physical and financial resources necessary for fulfilling their obligations under this Directive and carrying out the activity of electricity transmission, in particular:(a) assets that are necessary for the activity of electricity transmission, including the transmission system, shall be owned by the transmission system operator’.
7Article 35(4) and (5) of that directive provides:4. Member States shall guarantee the independence of the regulatory authority and shall ensure that it exercises its powers impartially and transparently. ……5.In order to protect the independence of the regulatory authority, Member States shall in particular ensure that:(a) the regulatory authority can take autonomous decisions, independently from any political body ……’
8Article 37(1)(i) and (j), (4)(a) and (b), (6)(a) to (c) and (9) of Directive 2009/72 provides:1.The regulatory authority shall have the following duties:…(i) monitoring the level of transparency, including of wholesale prices, and ensuring compliance of electricity undertakings with transparency obligations;(j) monitoring the level and effectiveness of market opening and competition at wholesale and retail levels, including on electricity exchanges, prices for household customers including prepayment systems, switching rates, disconnection rates, charges for and the execution of maintenance services, and complaints by household customers, as well as any distortion or restriction of competition, including providing any relevant information, and bringing any relevant cases to the relevant competition authorities;…4.Member States shall ensure that regulatory authorities are granted the powers enabling them to carry out the duties referred to in paragraphs 1, 3 and 6 in an efficient and expeditious manner. For this purpose, the regulatory authority shall have at least the following powers:(a) to issue binding decisions on electricity undertakings;(b) to carry out investigations into the functioning of the electricity markets, and to decide upon and impose any necessary and proportionate measures to promote effective competition and ensure the proper functioning of the market. Where appropriate, the regulatory authority shall also have the power to cooperate with the national competition authority and the financial market regulators or the Commission in conducting an investigation relating to competition law;…6.The regulatory authorities shall be responsible for fixing or approving sufficiently in advance of their entry into force at least the methodologies used to calculate or establish the terms and conditions for:(a) connection and access to national networks, including transmission and distribution tariffs or their methodologies. Those tariffs or methodologies shall allow the necessary investments in the networks to be carried out in a manner allowing those investments to ensure the viability of the networks;(b) the provision of balancing services which shall be performed in the most economic manner possible and provide appropriate incentives for network users to balance their input and off-takes. The balancing services shall be provided in a fair and non-discriminatory manner and be based on objective criteria; and(c) access to cross-border infrastructures, including the procedures for the allocation of capacity and congestion management.…9. The regulatory authorities shall monitor congestion management of national electricity systems including interconnectors, and the implementation of congestion management rules. To that end, transmission system operators or market operators shall submit their congestion management rules, including capacity allocation, to the national regulatory authorities. National regulatory authorities may request amendments to those rules.’
9Recitals 6, 8, 30, 33 and 59 of Directive 2009/73 have equivalent wording, respectively, to recitals 9, 11, 34, 37 and 61 of Directive 2009/72. The reference to Directive 2003/54/EC of the European Parliament and of the Council of 26 June 2003 concerning common rules for the internal market in electricity and repealing Directive 96/92/EC (OJ 2003 L 176, p. 37) in recital 33 of Directive 2009/72 is replaced by a reference to Directive 2003/55/EC of the European Parliament and of the Council of 26 June 2003 concerning common rules for the internal market in natural gas and repealing Directive 98/30/EC (OJ 2003 L 176, p. 57) in recital 29 of Directive 2009/73. The references to electricity markets are replaced by references to gas markets.
10Article 9(1)(a) and (8), Article 10(2), Article 17(1)(a) and Article 41(1)(i) and (j), (4)(a) and (b), (6)(a) to (c) and (9) of Directive 2009/73 have equivalent wording, respectively, to Article 9(1)(a) and (8), Article 10(2), Article 17(1)(a) and Article 37(1)(i) and (j), (4)(a) and (b), (6)(a) to (c) and (9) of Directive 2009/72.
Belgian law
The Law on electricity
11Article 9a(1) of the loi du 29 avril 1999, relative à l’organisation du marché de l’électricité (Law of 29 April 1999 on the organisation of the electricity market) (Moniteur belge of 11 May 1999, p. 16264), as amended by the Law of 28 June 2015 (Moniteur belge of 6 July 2015, p. 44424) (‘the Law on electricity’), an article inserted by the Law of 14 January 2003 (Moniteur belge of 28 February 2003, p. 9944), provides:‘The system operator must, with the exception of two securities, hold, directly or indirectly, the entire capital of, and the voting rights attached to the securities issued by:1° each subsidiary which, at the request of the system operator, is fully or partly responsible for the operation of the transmission system referred to in Article 8;2° each subsidiary which owns the infrastructure and equipment forming part of the transmission system.’
12Article 10(1) of the Law on electricity provides:‘After obtaining the opinion of the [Commission de régulation de l’électricité et du gaz (Electricity and Gas Regulatory Commission) (CREG)] and following deliberation by the Council of Ministers, the [Federal Minister for Energy] shall designate the system operator following a proposal by one or more owners of the system (including, where appropriate, the outgoing system operator) who, alone or jointly, own a part of the transmission system covering at least 75[%] of the national territory and at least two thirds of the territory of each region.…’
13Article 11 of that law provides:‘After obtaining the opinion of the [CREG] and in consultation with the system operator, the King shall establish a technical regulation for the operation of the transmission system and access thereto.The technical regulation shall define, inter alia:1° the minimum technical requirements for the connection to the transmission system of generating installations, distribution systems, directly connected consumers’ equipment, interconnector circuits and direct lines, connection deadlines and the technical procedures allowing the system operator to access users’ facilities and adopt or have adopted measures relating thereto where the security or technical reliability of the system so requires, as well as connection deadlines;2° the operational rules to which the system operator is subject with respect to its technical management of electricity flows and the actions which it must undertake to remedy congestion problems, technical disruptions and the failure of generation units;3° where appropriate, the priority to be given, in so far as possible in view of the necessary security of supply, to generating facilities which use renewable energy sources or cogeneration units;4° the ancillary services which the system operator must establish;5° the information to be provided by system users to the system operator, including data relating to the development plan;6° the information to be provided by the system operator to the operators of other electricity systems with which the transmission system is interconnected, with a view to ensuring the secure and effective operation, coordinated development and interoperability of the interconnected system;7° the provisions concerning information or prior approval by the [CREG] of operational rules, general terms and conditions, standard contracts and forms or procedures applicable to the system operator and, where appropriate, users.In accordance with the technical regulation, the system operator’s contracts for access to the network shall specify the procedures for implementing access for system users, distributors or intermediaries in a non-discriminatory manner.’
14Article 18(1) of that law provides:‘Without prejudice to the application of the loi du 6 avril 1995 relative au statut des entreprises d’investissement et à leur contrôle, aux intermédiaires financiers et conseillers en placements [(Law of 6 April 1995 on the status and control of investment firms, financial intermediaries and investment advisors) (Moniteur belge of 3 June 1995, p. 15876)], the King may, after obtaining the opinion of the [CREG]:…2° lay down rules of conduct applicable to intermediaries and suppliers, in particular with regard to trading and balancing;…’
15Article 23(1) and (2) of the Law on electricity provides:1. A [CREG] shall be created. The [CREG] shall be an autonomous body with legal personality, having its seat in the Brussels Capital administrative district [(Belgium)].The [CREG] shall take all reasonable measures to achieve the following objectives within the framework of its duties set out in Article 23(2), in close consultation, where appropriate, with the other federal authorities concerned, including the Autorité belge de la concurrence (Belgian Competition Authority), and without prejudice to their competences:…2. The [CREG] shall be entrusted with the duty of advising the public authorities on the organisation and operation of the electricity market, on the one hand, and with the general duty of supervising and monitoring the application of the laws and regulations relating thereto, on the other hand.To that end, the [CREG] shall:…3° monitor transparency and competition on the electricity market in accordance with Article 23a;3°a assess whether the relationship between prices and the costs of the undertaking referred to in Article 23b is objectively justified;4° monitor and control trading activity in wholesale energy products in accordance with Regulation (EU) No 1227/2011 [of the European Parliament and of the Council of 25 October 2011 on wholesale energy market integrity and transparency (OJ 2011 L 326, p. 1)], while respecting the respective competences of the Belgian Competition Authority and [the Autorité des services et marchés financiers (Financial Services and Markets Authority) (FSMA)];…8° monitor compliance by the system operator and electricity undertakings with their obligations under the present law and its implementing decrees, as well as other legislative and regulatory provisions applicable to the electricity market, in particular with regard to cross-border issues and the matters covered by Regulation (EC) No 714/2009 [of the European Parliament and of the Council of 13 July 2009 on conditions for access to the network for cross-border exchanges in electricity and repealing Regulation (EC) No 1228/2003 (OJ 2009 L 211, p. 15)];9° monitor the application of the technical regulation, approve the documents referred to by that regulation, in particular as regards the conditions for connection and access to the transmission system and the balance responsibility requirements in the control area, and assess the past performance of the rules in the technical regulation governing the security and reliability of the transmission system;…’
16Article 23a of that law provides:‘The [CREG] shall ensure that each electricity undertaking which supplies electricity to customers resident in Belgium refrains, either separately or in consultation with one or more electricity undertakings, from any anticompetitive behaviour or unfair commercial practices having, or likely to have, an effect on an efficient electricity market in Belgium.If the [CREG], in the exercise of its supervisory and monitoring tasks, finds that there have been unfair commercial practices or anticompetitive behaviour, it shall submit an own-initiative report to the [Federal Minister for Energy], setting out its findings and, where appropriate, any measures which it deems necessary for it or any other competent authority to take, with a view to remedying unfair commercial practices or anti-competitive behaviour having, or likely to have, an effect on an efficient electricity market in Belgium.The [CREG] shall report alleged infringements to the Belgian Competition Authority, forwarding to it the report which [the CREG] has sent to the [Federal Minister for Energy] and providing it with the required confidential information.With regard to unfair commercial practices, the King may, on a proposal from the [CREG], by decree deliberated in the Council of Ministers, lay down the urgent measures which the [CREG] is authorised to take.The [CREG] may formulate opinions and propose any measure promoting the proper functioning and transparency of the market; that measure shall be applicable to all electricity undertakings operating in Belgium.’
17According to Article 23b of that law:1. The prices offered by an electricity undertaking must be objectively justified in relation to the costs of the undertaking. The [CREG] shall assess that relationship by comparing, in particular, the costs and prices of that undertaking with the costs and prices of comparable undertakings, if possible also at international level.2. Where an electricity undertaking is a related undertaking, abuse of a dominant position will be presumed if it offers discriminatory prices and/or conditions to unrelated undertakings.3. If the [CREG] finds that there is no objectively justified relationship as referred to in [paragraph 1], it shall submit an own-initiative report to the [Federal Minister for Energy], setting out its findings and the measures which it recommends.The [CREG] shall report alleged infringements to the Belgian Competition Authority, forwarding to it the report which [the CREG] has sent to the [Federal Minister for Energy] and providing it with the required confidential information.With regard to discriminatory prices and/or conditions, the King may, on a proposal from the [CREG], by decree deliberated in the Council of Ministers, lay down the urgent measures which the [CREG] is authorised to take.With respect to pricing, the [CREG] may formulate opinions and propose any measure which shall be applicable to all electricity undertakings operating in Belgium.’
18Article 26(1) of that law provides:‘In accomplishing the duties assigned to it, the [CREG] may request that the system operator and distribution system operators, any related or associated undertaking and any undertaking managing or operating a multilateral trading platform on which energy blocks or financial instruments relating to energy blocks are traded, having a direct link with or direct impact on the Belgian electricity market, provide it with all necessary information, including the justification for any refusal to grant third-party access, and any information on measures necessary to reinforce the network, provided that it gives reasons for its request. It may carry out an inspection of their accounts at their premises.As from 1 January 2003, the [CREG] may also request from them and from the comité de contrôle de l’Électricité et du Gaz (Electricity and Gas Advisory Committee), without prejudice to the duties assigned to the latter, information relevant for the preparation of its pricing policy in the context of carrying out the duties assigned to it in Article 23(14°a), (15°) and (16°).’
19Article 26(1a) of the Law on electricity provides:‘In accomplishing the duties assigned to it in Articles 23a and 23b, the [CREG] shall also have the powers and rights described below:1° to obtain from electricity undertakings any information in any form whatsoever on matters falling within its competence and duties, within 30 days of its request;2° to obtain from them reports on their activities or certain aspects thereof;3° to determine the information which must be periodically communicated to it by electricity undertakings and the frequency with which that information must be transmitted to it;4° to carry out, in the event of a refusal to transmit the information requested within 30 days, an on-site visit during which it may consult and, where appropriate, copy all the above information and documents necessary for the performance of the duties assigned to it.The information gathered by the [CREG] in the context of the present paragraph may be used only for the purposes of the reports, opinions and recommendations referred to in Articles 23a and 23b. The King may, by Royal Decree deliberated in the Council of Ministers, extend the present article to any binding decisions covered by Articles 23a and 23b.’
20Article 30a(3) of that law provides:‘…The members [of the CREG] shall have the competence to investigate and to establish, by means of reports deemed to be authentic until proven otherwise, infringements … To that end, they may:1° gain access to buildings, workshops and the outbuildings thereof during opening or working hours, where this is necessary for the performance of their duties;2° make any useful observations and require the production and seizure of any documents, evidence, records and objects necessary for the investigation and establishment of infringements;3° gather any information and take any statements or written or oral testimony;4° assist in the implementation of the [CREG’s] decisions.…’
21Pursuant to Article 31 of that law, ‘without prejudice to the other measures provided for by the present law, the [CREG] may order any natural or legal person established in Belgium to comply with specific provisions of the present law, its implementing decrees, subsequent laws relating to pricing or relating to the payment referred to in Article 21a, or any other provisions the application of which it monitors pursuant to Article 23(2), [second subparagraph], points 4° and 8°, within the period determined by the [CREG]’.
22Article 31/1 of that law provides:1. … subject to the prior authorisation of an investigating judge, the persons referred to in Article 30a(3), [first subparagraph], may, by reasoned decision, order, except in a private dwelling, the seizure of assets which are the property of the person under investigation by the [CREG] and which either constitute the subject matter of the infringement under investigation, or were used or were intended to be used to commit the infringement in question, or constitute either a pecuniary benefit derived directly from the infringement or the equivalent of such a benefit.The persons referred to in Article 30a(3), [first subparagraph], shall state in their decision the factual circumstances justifying the measure taken and shall take into account the principles of proportionality and subsidiarity in giving the reasons for their decision.For the purposes of enforcement of that order, the persons referred to in Article 30a(3), [first subparagraph], may, if necessary, request the assistance of the public authorities.…’
The Law on natural gas
23The second subparagraph of Article 8(2) of the loi du 12 avril 1965, relative au transport de produits gazeux et autres par canalisations (Law of 12 April 1965 on the transport of gas and other products by pipeline) (Moniteur belge of 7 May 1965, p. 5260), as amended by the Law of 8 July 2015 (Moniteur belge of 16 July 2015, p. 46239) (‘the Law on natural gas’), provides:‘A holder of a natural gas transmission authorisation who is a prospective natural gas transmission system operator must own, alone or jointly with other holders of a natural gas transmission authorisation, a part of the proposed system covering at least 75% of the national territory.’
24Article 15/5j of that law provides:1. On a proposal from the [CREG], the King shall draw up a code of good conduct concerning access to the natural gas transmission system, the natural gas storage facility and the [liquefied natural gas (LNG)] facility.The code of good conduct shall define:1° the procedures and detailed rules for requesting access to the network;2° the information to be provided by users of the natural gas transmission system, the natural gas storage facility and the LNG facility to the natural gas transmission system operator, the natural gas storage facility operator and the LNG facility operator;3° the precautions to be taken by the natural gas transmission system operator, the natural gas storage facility operator and the LNG facility operator to preserve the confidentiality of commercial data relating to users of the natural gas transmission system, the natural gas storage facility [or] the LNG facility;4° the time limits within which the natural gas transmission system operator, the natural gas storage facility operator and the LNG facility operator must respond to requests for access to their system and facility;5° the measures aimed at avoiding any discrimination between users or categories of users of the natural gas transmission system, the natural gas storage facility or the LNG facility;6° the minimum requirements for legal and operational separation of the functions of natural gas transmission and natural gas supply within integrated natural gas transmission system, natural gas storage or LNG operators;7° the basic principles relating to the rights and obligations of, on the one hand, the natural gas transmission system operator, the natural gas storage facility operator and the LNG facility operator and, on the other hand, the users of the natural gas transmission system, the natural gas storage facility or the LNG facility, for access to the latter;8° the basic principles concerning invoicing;9° the basic principles relating to the rights and obligations of, on the one hand, the natural gas transmission system operator, the natural gas storage facility operator and the LNG facility operator and, on the other hand, the users of the natural gas transmission system, the natural gas storage facility or the LNG facility as regards use of the latter, in particular as regards negotiation for access to transmission capacity, congestion management and the publication of information;10° the measures which must be included in the programme of commitments to guarantee that any discriminatory practice is excluded and to ensure appropriate monitoring of compliance. The programme shall set out the specific obligations imposed on employees in order to achieve that objective. The person or body responsible for monitoring the programme of commitments must submit an annual report describing the adopted measures to the [CREG]. That report shall be published;11° the requirements as regards the independence of the personnel of operators from producers, distributors, suppliers and intermediaries[;]12° the rules and organisation of the secondary market referred to in Article 15/1(1)(9°a);13° the basic principles concerning the organisation of hubs and access thereto.The granting and maintenance of any transmission or supply authorisation shall be subject to compliance with the code of good conduct.…’
25Article 15/14(2), first and second subparagraphs, of that law provides:‘The [CREG] shall be entrusted with the duty of advising the public authorities on the organisation and operation of the natural gas market, on the one hand, and with the duty of supervising and monitoring the application of the laws and regulations relating thereto, on the other hand.To that end, the [CREG] shall:…6° approve the main conditions for access to transmission systems, with the exception of the tariffs referred to in Articles 15/5 to 15/5d, and monitor the application thereof by the transmission undertakings so far as concerns their respective systems;…9° inspect the accounts of undertakings in the natural gas sector, in particular with a view to verifying compliance with the provisions of Article 15/12 and the absence of cross-subsidies;…16° monitor the level of transparency, including of wholesale prices, and ensure compliance with transparency obligations by natural gas undertakings;17° monitor the level and effectiveness of market opening and competition at wholesale and retail levels, including on natural gas exchanges, as well as any distortion or restriction of competition, providing any relevant information and bringing any relevant cases to the Belgian Competition Authority;…29° approve, on a proposal from the natural gas transmission system operator, the methodologies used to establish access to cross-border infrastructures, including the procedures for the allocation of capacity and congestion management. Those methods shall be transparent and non-discriminatory. The [CREG] shall publish the approved methodologies on its website;30° monitor the congestion management of the natural gas transmission system, including interconnections, and the implementation of congestion management rules, in accordance with Article 15/1(3)(7°). The [CREG] shall inform the direction générale de l’Énergie (Directorate-General for Energy) [of the Federal Public Service “Économie, PME, Classes moyennes et Énergie” (“Economy, SMEs, Self-Employed and Energy”)] thereof’.
26Article 15/14a of that law provides:‘The [CREG] shall ensure that each natural gas undertaking which supplies natural gas to customers resident in Belgium refrains, either separately or in consultation with one or more natural gas undertakings, from any anticompetitive behaviour or unfair commercial practices having, or likely to have, an effect on an efficient natural gas market in Belgium.If the [CREG], in the exercise of its supervisory and monitoring tasks, finds that there have been unfair commercial practices or anticompetitive behaviour, it shall submit an own-initiative report to the [Federal Minister for Energy], setting out its findings and, where appropriate, any measures which it deems necessary for it or any other competent authority to take, with a view to remedying unfair commercial practices or anticompetitive behaviour having, or likely to have, an effect on an efficient natural gas market in Belgium.The [CREG] shall report alleged infringements to the Belgian Competition Authority, forwarding to it the report which [the CREG] has sent to the [Federal Minister for Energy] and providing it with the required confidential information.With regard to unfair commercial practices, the King may, on a proposal from the [CREG], by decree deliberated in the Council of Ministers, lay down the urgent measures which the [CREG] is authorised to take.The [CREG] may formulate opinions and propose any measure promoting the proper functioning and transparency of the market; that measure shall be applicable to all natural gas undertakings operating in Belgium.’
27Article 15/14b of the Law on natural gas provides:1. The prices offered by a natural gas undertaking must be objectively justified in relation to the costs of the undertaking. The [CREG] shall assess that relationship by comparing, in particular, the costs and prices of that undertaking with the costs and prices of comparable undertakings, if possible also at international level.2. Where a natural gas undertaking is a related undertaking, abuse of a dominant position will be presumed if it offers discriminatory prices and/or conditions to unrelated undertakings3. If the [CREG] finds that there is no objectively justified relationship as referred to in [paragraph 1], it shall submit an own-initiative report to the [Federal Minister for Energy], setting out its findings and the measures which it recommends.The [CREG] shall report alleged infringements to the Belgian Competition Authority, forwarding to it the report which [the CREG] has sent to the [Federal Minister for Energy] and providing it with the required confidential information.With regard to discriminatory prices and/or conditions, the King may, on a proposal from the [CREG], by decree deliberated in the Council of Ministers, lay down the urgent measures which the [CREG] is authorised to take.With respect to pricing, the [CREG] may formulate opinions and propose any measure which shall be applicable to all gas undertakings operating in Belgium.’
28According to Article 15/16(1a) of that law:‘In accomplishing the duties assigned to it in Articles 15/14a and 15/14b, the [CREG] shall also have the powers and rights described below:1° to obtain from natural gas undertakings any information, in any form whatsoever, on matters falling within its competence and duties, within 30 days of its request;2° to obtain from them reports on their activities or certain aspects thereof;3° to determine the information which must be periodically communicated to it by natural gas undertakings and the frequency with which that information must be transmitted to it;4° to carry out, in the event of a refusal to transmit the information requested within 30 days, an on-site visit during which it may consult and, where appropriate, copy all the above information and documents necessary for the performance of the duties assigned to it.The information gathered by the [CREG] in the context of the present paragraph may be used only for the purposes of the reports, opinions and recommendations referred to in Articles 15/14a and 15/14b. The King may, by Royal Decree deliberated in the Council of Ministers, extend the present article to any binding decisions covered by Articles 15/14a and 15/14b.’
29Article 18(3) of the Law on natural gas provides:‘…The members [of the CREG] shall have the competence to investigate and to establish, by means of reports deemed to be authentic until proven otherwise, infringements … To that end, they may:1° gain access to buildings, workshops and the outbuildings thereof during opening or working hours, where this is necessary for the performance of their duties;2° make any useful observations and require the production and seizure of any documents, evidence, records and objects necessary for the investigation and establishment of infringements;3° gather any information and take any statements or written or oral testimony;4° assist in the implementation of the [CREG’s] decisions.…’
30Pursuant to Article 20/2 of that law, ‘without prejudice to the other measures provided for by the present law, the [CREG] may order any natural or legal person established in Belgium to comply with specific provisions of the present law, its implementing decrees, subsequent laws relating to pricing or relating to the payment referred to in Article 15/11, or any other provisions the application of which it monitors pursuant to Article 15/14(2), [second subparagraph], points 5° and 5°a, within the period determined by the [CREG]’.
The pre-litigation procedure and the procedure before the Court
31The Commission has, on its own initiative, examined the transposition of Directives 2009/72 and 2009/73 into Belgian law, in order to ascertain whether they are incompatible with EU law. That examination concerned the unbundling of transmission systems, the independence and competences of national regulatory authorities and consumer protection.
32On 6 May 2013, the Commission sent a letter to the Kingdom of Belgium, in the context of the EU Pilot procedure, inviting it to answer several questions concerning the transposition of those directives. Additional questions were sent to that Member State on 10 February 2014.
33The Kingdom of Belgium replied to that letter and to those additional questions on 12 September 2013, on 24 and 28 February 2014 and on 3, 18 and 19 March 2014.
34On 17 October 2014, the Commission sent the Kingdom of Belgium a letter of formal notice, since it considered that the information provided by that Member State had not allowed it to allay its concerns regarding the compatibility with EU law of the transposition into Belgian law of Directives 2009/72 and 2009/73. That Member State replied on 18 January 2015.
35On 26 February 2016, the Commission sent a reasoned opinion to the Kingdom of Belgium and invited it to take the measures necessary to comply with that reasoned opinion within two months of receipt.
36The Kingdom of Belgium replied on 19 July 2016 and subsequently notified legislative measures to the Commission on 15 September 2016 and on 9, 10 and 30 January 2017. On 2 October 2018, a conference call took place between the Belgian authorities and the Commission services.
37Taking the view that certain provisions of Belgian law remained incompatible with Directives 2009/72 and 2009/73, the Commission decided to bring the present action.
The action
The first complaint, alleging failure to comply with the provisions of Article 9(1)(a) of each of Directives 2009/72 and 2009/73
Arguments of the parties
38The Commission claims that Article 9(1)(a) of each of Directives 2009/72 and 2009/73 has not been correctly transposed into Belgian law. In that regard, Article 10(1) of the Law on electricity and the second subparagraph of Article 8(2) of the Law on natural gas require not that the transmission system operator be the owner of the transmission system, but that, according to the Law on electricity, network owners who propose that the Federal Minister for Energy designate an operator must jointly own a part of the transmission system covering at least 75% of the national territory and that, according to the Law on natural gas, the system operator must jointly own with others a part of the system covering at least 75% of the national territory.
39A factual situation or administrative practice consistent with EU law cannot offset the incorrect transposition of those directives into national law. Moreover, it is irrelevant that the Commission did not object to the certification in Belgium of Elia System Operator SA and Fluxys Belgium SA, the electricity and natural gas transmission system operators, respectively.
40Furthermore, the insertion in 2003 of Article 9a into the Law on electricity did not put an end to the infringement, since that provision provides only that the system operator’s monitoring of that system may be carried out through a wholly owned subsidiary.
41The Kingdom of Belgium contends that Elia System Operator and Fluxys Belgium are owners of the system, for the purposes of Directives 2009/72 and 2009/73, and that the Commission did not make any comments on the interpretation of Article 9(1)(a) of those directives in the opinions it delivered at the time of the certification of those operators.
42According to the Kingdom of Belgium, there is confusion between, on the one hand, the persons who may propose the designation of a transmission system operator and own at least 75% of the system when that operator is designated and, on the other hand, the percentage of the system in the ownership of the designated operator. Article 10(1) of the Law on electricity refers only to the first element, but is not concerned with the designated system operator’s ownership of the system. Moreover, Article 9a of that law, introduced in 2003, provides for the transfer of ownership, in that it requires the system operator, through a subsidiary, to be the owner of the transmission system.
43The Kingdom of Belgium maintains that the Commission’s arguments that, pursuant Article 10(1) of the Law on electricity, network owners could also be owners of an undertaking having a generation or supply function is based on theoretical assumptions and assertions, and that the Commission has not provided evidence of a failure to fulfil obligations, although the burden of proof lies with it.
Assessment of the Court
44Article 9(1)(a) of each of Directives 2009/72 and 2009/73 provides that Member States are to ensure that from 3 March 2012 each undertaking which owns a transmission system acts as a transmission system operator.
45According to Article 10(2) of each of those directives, it is the undertakings which own a transmission system, and which have been certified by the national regulatory authority as having complied with the requirements of Article 9 of each of those directives, which are to be approved and designated as transmission system operators by Member States.
46Recital 9 of Directive 2009/72 and recital 6 of Directive 2009/73 state that without effective separation of networks from activities of generation and supply (effective unbundling), there is an inherent risk of discrimination not only in the operation of the network but also in the incentives for vertically integrated undertakings to invest adequately in their networks.
47As is apparent from recital 11 of Directive 2009/72 and recital 8 of Directive 2009/73, the unbundling of ownership implies the designation of the network owner as the system operator and its independence from any supply and production interests (see, to that effect, judgment of 26 October 2017, Balgarska energiyna borsa, C‑347/16, EU:C:2017:816, paragraph 46).
48Moreover, Article 9(8) of each of Directives 2009/72 and 2009/73 provides that where, on 3 September 2009, the transmission system belongs to a vertically integrated undertaking a Member State may decide not to apply paragraph 1 of that article and that, in such case, the Member State concerned is either to designate an independent system operator in accordance with Article 13 of Directive 2009/72 and Article 14 of Directive 2009/72, respectively, or to comply with the provisions of Chapter V of Directive 2009/72 and Chapter IV of Directive 2009/73, respectively.
49As regards independent transmission operators, it is important to note that it has been held that Article 17(1)(a) of Directive 2009/72 expressly requires that those transmission system operators own the assets that are necessary for the electricity transmission activities, including the transmission system, in particular in order to ensure, as follows from recitals 16, 17 and 19 of that directive, the complete and effective independence of those operators from activities of generation and supply (judgment of 17 October 2019, Elektrorazpredelenie Yug, C‑31/18, EU:C:2019:868, paragraph 64 and the case-law cited).
50However, as the Commission rightly argues, there is no reason for there to be a difference as regards the extent of ownership of the system between Article 9(1) and (8) of each of Directives 2009/72 and 2009/73. Article 9(1) of each of the directives is concerned with the case of an ‘undertaking which owns a transmission system’, making no reference at all to the case of an undertaking which owns part of such a system, which suggests that the undertaking in question, which is in a position to be designated as a transmission system operator, must own the entire transmission system. That reading is supported by the unambiguous wording of Article 17(1)(a) of each of those directives, which refers to the case set out in Article 9(8) of each of those directives and requires that the transmission system be owned by the transmission system operator.
51It follows from that analysis of the wording and context of Article 9(1) of each of Directives 2009/72 and 2009/73 that the owner of the transmission system must be the owner of the entire transmission system.
52Moreover, that conclusion is consistent with the purpose of that provision. As the Commission also rightly points out, the operator, as the owner of the entire system, has an incentive to make the investments and technical modifications which will allow it to operate and develop that system in an optimal manner.
53In the present case, the Belgian legislation does not require the electricity or natural gas transmission system operator to be the network owner.
54Article 10(1) of the Law on electricity provides only that network owners who propose that the Federal Minister for Energy designate an operator must jointly own a part of the transmission system covering at least 75% of the national territory. The second subparagraph of Article 8(2) of the Law on natural gas requires that the prospective transmission system operator must jointly own with others a part of the system covering at least 75% of the national territory.
55It must be observed that Article 9a of the Law on electricity, inserted in 2003 and relied upon by the Kingdom of Belgium, provides that the system operator must, with the exception of two securities, hold, directly or indirectly, the ‘entire capital of, and the voting rights’ attached to the securities issued by, each subsidiary which, at the request of the system operator, is fully or partly responsible for the operation of the transmission system referred to in Article 8 of that law, or by each subsidiary which owns the infrastructure and equipment forming part of the transmission system. Although that provision provides that the control of the system operator over that system may be exercised through a subsidiary which is almost wholly owned by that operator, it nevertheless does not require that any system operator should have such a subsidiary, nor that, where such a subsidiary exists, the control exercised by it should cover the whole of the transmission system concerned.
56Moreover, if, as the Kingdom of Belgium claims, Article 10(1) of the Law on electricity relates only to the persons who may propose the designation of the transmission system operator and, accordingly, that operator does not itself have to meet the requirements of that provision, that suggests not that the Belgian legislation is consistent with Directive 2009/72, but that that legislation does not require the operator to own the system, since the requirement to own ‘a part of the transmission system’ does not apply to it. If the arguments of the Kingdom of Belgium were followed, one or more owners of a part of the system could propose as the operator a person who does not even own a part of the system.
57Finally, the Kingdom of Belgium relies on respect for the effectiveness of Directives 2009/72 and 2009/73. Its arguments are based primarily on the fact that, pursuant to the certification decisions taken by the CREG under Regulation No 714/2009 and Regulation (EC) No 715/2009 of the European Parliament and of the Council of 13 July 2009 on conditions for access to the natural gas transmission networks and repealing Regulation (EC) No 1775/2005 (OJ 2009 L 211, p. 36), Elia System Operator and Fluxys Belgium, respectively the electricity and natural gas transmission system operators, are network owners within the meaning of Directives 2009/72 and 2009/73. However, notwithstanding the binding nature of those decisions taken by the CREG, it is settled case-law that the fact that national law is implemented in accordance with the provisions of a directive by the administrative authorities of a Member State cannot, in itself, provide the clarity and precision necessary to satisfy the requirements of legal certainty and that mere administrative practices, which by their nature are alterable at will by the authorities, cannot be regarded as constituting fulfilment of the obligations owed by the Member States in the context of transposition of a directive (judgment of 15 March 2012, Commission v Poland, C‑46/11, not published, EU:C:2012:146, paragraph 28 and the case-law cited).
58Moreover, the fact that, in its opinions issued in the course of the procedure for the certification of those system operators, the Commission did not object to their certification cannot prejudge the issue of the correct transposition of Directives 2009/72 and 2009/73 into Belgian law, since the purpose of those opinions was not to reach a decision on the transposition of those directives.
59Consequently, by failing correctly to transpose Article 9(1)(a) of each of those directives, the Kingdom of Belgium has failed to fulfil its obligations under those directives.
The second complaint, alleging infringement of several provisions of Article 37 of Directive 2009/72 and Article 41 of Directive 2009/73
60As regards the second complaint, which in the application consisted of three parts, the Commission stated in its reply that it was withdrawing the third part, alleging infringement of Article 37(10) of Directive 2009/72 and Article 41(10) of Directive 2009/73.
The first part of the second complaint, alleging infringement of Article 37(4)(a) and (b) of Directive 2009/72 and Article 41(4)(a) and (b) of Directive 2009/73
–Arguments of the parties
61The Commission claims that Article 37(4)(a) and (b) of Directive 2009/72 and Article 41(4)(a) and (b) of Directive 2009/73 have not been correctly transposed into Belgian law. Several provisions of the Law on electricity and the Law on natural gas do not allow the regulatory authority, in the present case the CREG, to issue binding decisions on electricity and gas undertakings concerning transparency and free competition on the market or to impose on them any necessary and proportionate measures to promote effective competition and ensure the proper functioning of the market.
62If the regulatory authority must, under those provisions of Directives 2009/72 and 2009/73, have the power to impose measures to ensure that effective competition prevails, it is necessary to dismiss the Kingdom of Belgium’s arguments that, under Belgian law, only the King, as political authority, can allow the CREG, on a proposal from that body, to issue binding decisions or transmit to other authorities the information which it has collected in order for those authorities to take, where appropriate, binding measures. The same applies to the arguments relating to the alleged exclusive competence of the competition authorities.
63As regards the Kingdom of Belgium’s arguments that Article 31 of the Law on electricity and Article 20/2 of the Law on natural gas confer on the CREG the general power to issue binding decisions on natural or legal persons, the Commission argues that those provisions make it possible only to order those persons to comply with the obligations already incumbent on them, whereas Article 37(4)(a) and (b) of Directive 2009/72 and Article 41(4)(a) and (b) of Directive 2009/73 are intended to confer on the regulatory authority the power to take autonomous decisions.
64The Kingdom of Belgium contends that the national provisions referred to by the Commission are exclusively concerned with competition law and transpose Article 37(1)(j), ‘last part’, and (13) of Directive 2009/72 and Article 41(1)(j), ‘last part’, and (13) of Directive 2009/73. In that field, the competition authorities alone have competence, as is apparent, in particular, from recitals 37 and 61 of Directive 2009/72.
65The national provisions referred to by the Commission confirm the division of powers between the competition authorities and a sectoral authority, such as the CREG, which has the competence to collect information and to transmit it to the competition authorities, which may, on the basis of that information, take measures or decisions. The CREG acts in the context of due cooperation with the Belgian Competition Authority.
66Moreover, the powers listed in Article 37(4) of Directive 2009/72 and Article 41(4) of Directive 2009/73 cannot cover all the tasks assigned to the regulatory authority under Article 37(1) of Directive 2009/72 and Article 41(1) of Directive 2009/73, as that could create conflicts of competence between the competition authority and the CREG in matters of competition law. Article 37(4) of Directive 2009/72 and Article 41(4) of Directive 2009/73 refer only to effective competition and the efficient functioning of the market, but not to the concepts of transparency and free competition on the market. Furthermore, the CREG already has the powers listed in Article 37(4) of Directive 2009/72 and Article 41(4) of Directive 2009/73, pursuant to Article 23(2) of the Law on electricity, Article 7(1a) and Article 29a(7°) of the Law on electricity and Article 15/14(2)(8°a) of the Law on natural gas.
67In addition, pursuant to Article 37(4) of Directive 2009/72 and Article 41(4) of Directive 2009/73, the regulatory authority must be granted only the powers enabling it to carry out the duties referred to in Article 37(1), (3) and (6) of Directive 2009/72 and Article 41(1), (3) and (6) of Directive 2009/73, which is the situation in Belgian law under Article 36(2°) of the loi du 8 janvier 2012, portant modifications de la loi du 29 avril 1999 relative à l’organisation du marché de l’électricité et de la loi du 12 avril 1965 relative au transport de produits gazeux et autres par canalisations (Law of 8 January 2012 amending the Law of 29 April 1999 on the organisation of the electricity market and the Law of 12 April 1965 on the transport of gas and other products by pipeline) (Moniteur belge of 11 January 2012, p. 909), and under the second subparagraph of Article 23(1) of the Law on electricity, which transposes Article 37(1), (4), (6) and (9) of Directive 2009/72, relating to the powers of the regulatory authorities.
68The Kingdom of Belgium argues that Article 37(1)(i) of Directive 2009/72 and Article 41(1)(i) of Directive 2009/73 lay down only the duty of ensuring compliance of electricity and gas undertakings with transparency obligations. The regulatory authority can impose a penalty solely in the event of a failure to comply with a transparency obligation. Only the ‘last part’ of Article 37(1)(j) of Directive 2009/72 and the ‘last part’ of Article 41(1)(j) of Directive 2009/73, which provide for the monitoring of prices for household customers including prepayment systems, switching rates, disconnection rates, charges for and the execution of maintenance services, as well as complaints by household customers, are relevant.
69In any event, Article 31 of the Law on electricity and Article 20/2 of the Law on natural gas provide in general for a decision-making competence with respect to undertakings, and regulatory authorities are administrative authorities with the competence to adopt administrative measures amounting to decisions. The CREG can monitor the level of transparency by undertakings and the level and effectiveness of market opening and competition at wholesale and retail levels. It has powers of injunction, powers to carry out documentary and on-the-spot inspections and powers of investigation, pursuant to Article 30a(3) and Article 31/1 of the Law on electricity and Article 18(3) and Article 15/16 of the Law on natural gas, and powers to adopt and impose measures to promote competition on the basis of Article 31 of the Law on electricity and Article 20/2 of the Law on natural gas. The CREG can impose administrative fines and ensure compliance with Regulation No 1227/2011.
–Assessment of the Court
70Article 37(1) of Directive 2009/72 and Article 41(1) of Directive 2009/73 confer on the regulatory authority various duties including, in particular in points (i) and (j) thereof, the duties of monitoring the level of transparency, including of wholesale prices, and ensuring compliance of electricity and natural gas undertakings with transparency obligations, monitoring the level and effectiveness of market opening and competition at wholesale and retail levels, prices for household customers and complaints by household customers, as well as monitoring any distortion or restriction of competition, including providing any relevant information, and bringing any relevant cases to the competent competition authorities.
71Article 37(4)(a) and (b) of Directive 2009/72 and Article 41(4)(a) and (b) of Directive 2009/73 provide that Member States are to ensure that regulatory authorities are granted the powers enabling them to carry out the duties referred to in paragraphs 1, 3 and 6 of those articles in an efficient and expeditious manner and that, for that purpose, the regulatory authority is to have at least the power to issue binding decisions on electricity or natural gas undertakings, and to carry out investigations and to decide upon and impose any necessary and proportionate measures to promote effective competition and ensure the proper functioning of the market. Where appropriate, the regulatory authority is also to have the power to cooperate, inter alia, with the national competition authority in conducting an investigation relating to competition law.
72Thus, contrary to the Kingdom of Belgium’s assertions, the power to adopt measures to promote effective competition on the electricity and natural gas markets should not lie exclusively with the national competition authorities. As stated in recital 37 of Directive 2009/72 and recital 33 of Directive 2009/73, the regulatory authority must have the power to decide, irrespective of the application of competition rules, on appropriate measures ensuring customer benefits through the promotion of effective competition necessary for the proper functioning of the internal market in electricity and natural gas. As is apparent from the use of the term ‘impose’ in Article 37(4)(b) of Directive 2009/72 and Article 41(4)(b) of Directive 2009/73, that power must permit the adoption of binding measures.
73It thus follows from the provisions of Directives 2009/72 and 2009/73 that Member States must confer on regulatory authorities the power to adopt binding measures, in particular to promote effective competition on the electricity and natural gas markets. Although those regulatory authorities must be able to cooperate with the national competition authorities, including providing any relevant information, and bringing any relevant cases to those national competition authorities, the fact remains that the regulatory authorities must be able to exercise their competences and powers independently of those exercised by the national competition authorities.
74It is in that context that the first part of the second complaint raised by the Commission must be examined. In that regard, it must be observed that Articles 23a, 23b and 26(1a) of the Law on electricity and Articles 15/14a, 15/14b and 15/16 of the Law on natural gas, which are referred to by the Commission in the context of that first part, do fall within the scope of Article 37(1)(i) and (j) of Directive 2009/72 and Article 41(1)(i) and (j) of Directive 2009/73, in so far as those national provisions seek, like those EU provisions, to entrust the CREG with the duty of monitoring and controlling anticompetitive behaviour or practices and the prices charged by electricity and natural gas undertakings.
75As the Commission rightly points out, those national provisions do not allow the regulatory authority to issue binding decisions on electricity and natural gas undertakings concerning transparency and free competition on the market and, consequently, to impose on them any necessary and proportionate measures to promote effective competition and ensure the proper functioning of the market.
76While the powers derived from Articles 23a, 23b and 30a(3) of the Law on electricity and Articles 15/14a, 15/14b, 15/16 and 18(3) of the Law on natural gas may allow the CREG to control and monitor anticompetitive behaviour or unfair commercial practices of undertakings supplying electricity or natural gas having, or likely to have, an effect on an electricity or natural gas market, and to control and monitor the prices offered by those undertakings, which must be objectively justified in relation to their costs, it should be noted that, according to Articles 23a and 23b of the Law on electricity and Articles 15/14a and 15/14b of the Law on natural gas, the findings made by the CREG in the exercise of its monitoring and control tasks allow it, in principle, only to draw up reports for the Federal Minister for Energy, to formulate opinions and recommendations and to report alleged infringements to the Belgian Competition Authority. Admittedly, those provisions also provide, with regard to unfair commercial practices and discriminatory prices and/or conditions, that the King may, by decree deliberated in the Council of Ministers, on a proposal from the CREG, lay down the measures which the CREG is authorised to take, which appears to include binding measures. However, those measures which the CREG may be authorised to take are limited to ‘urgent measures’. In any event, the Kingdom of Belgium has not cited any decree setting out the binding measures which the CREG is authorised to adopt.
77With regard to Article 26(1a) of the Law on electricity and Article 15/16 of the Law on natural gas, it should be noted that those provisions merely grant the CREG powers to gather information which may be used solely for the purposes of the reports, opinions, recommendations and, where appropriate, urgent measures referred to in Articles 23a and 23b of the Law on electricity and Articles 15/14a and 15/14b of the Law on natural gas. Those powers are therefore not such as to remedy the shortcomings in the CREG’s powers stemming from Articles 23a and 23b of the Law on electricity and Articles 15/14a and 15/14b of the Law on natural gas.
78Similarly, Article 31/1 of the Law on electricity, cited by the Kingdom of Belgium, solely permits, subject to the prior authorisation of an investigating judge, the personnel of the CREG by reasoned decision, to order, except in a private dwelling, the seizure of assets which are the property of the person under investigation by the CREG and which either constitute the subject matter of the infringement under investigation, or were used or were intended to be used to commit the infringement in question, or constitute either a pecuniary benefit derived directly from the infringement or the equivalent of such a benefit.
79Finally, it should be added that it is not possible to conclude from the provisions of Article 31 of the Law on electricity and Article 20/2 of the Law on natural gas that the CREG has the powers referred to in Article 37(4)(b) of Directive 2009/72 and Article 41(4)(b) of Directive 2009/73. As the Commission rightly maintains, those articles of the Law on electricity and the Law on natural gas allow the CREG only to order the persons concerned to comply with obligations which are already specifically imposed on them by the provisions of those laws. Those articles do not confer a broader power on that authority to issue binding decisions and autonomously impose the measures which it deems necessary, in particular to promote effective competition and ensure the proper functioning of the market.
80As regards the interpretation of those articles put forward by the Kingdom of Belgium, to the effect that they allow the CREG to issue binding decisions and to impose the measures which Article 37(4)(a) and (b) of Directive 2009/72 and Article 41(4)(a) and (b) of Directive 2009/73 require, it should be pointed out that such an interpretation runs counter to Articles 23a and 23b of the Law on electricity and Articles 15/14a and 15/14b of the Law on natural gas, which, apart from the possibility for the CREG to take the urgent measures laid down in advance by royal decree, provide only for the possibility of the CREG drawing up reports, opinions and recommendations and reporting alleged infringements to the Belgian Competition Authority. However, Article 31 of the Law on electricity and Article 20/2 of the Law on natural gas must be read, as they expressly provide, ‘without prejudice to the other measures provided for’ by those laws.
81In those circumstances, even if the Court were to accept that the Kingdom of Belgium’s proposed interpretation of Article 31 of the Law on electricity and Article 20/2 of the Law on natural gas is feasible, those provisions of national law could not be regarded as implementing, with precision and clarity, the provisions of Article 37(4)(a) and (b) of Directive 2009/72 and Article 41(4)(a) and (b) of Directive 2009/73.
82However, according to the Court’s settled case-law, the provisions of a directive must be implemented with unquestionable binding force and with the specificity, precision and clarity required in order to satisfy the requirement of legal certainty, under which, in the case of a directive intended to confer rights on individuals, persons concerned must be enabled to ascertain the full extent of their rights (judgments of 8 July 1999, Commission v France, C‑354/98, EU:C:1999:386, paragraph 11; of 14 March 2006, Commission v France, C‑177/04, EU:C:2006:173, paragraph 48; and of 4 October 2018, Commission v Spain, C‑599/17, not published, EU:C:2018:813, paragraph 19 and the case-law cited).
83Consequently, the Kingdom of Belgium has failed to fulfil its obligations under Directives 2009/72 and 2009/73, by failing correctly to transpose Article 37(4)(a) and (b) of Directive 2009/72 and Article 41(4)(a) and (b) of Directive 2009/73.
The second part of the second complaint, alleging infringement of Article 37(6)(a) to (c) and (9) of Directive 2009/72 and Article 41(6)(a) to (c) and (9) of Directive 2009/73
–Arguments of the parties
84The Commission claims that Article 37(6)(a) to (c) and (9) of Directive 2009/72 and Article 41(6)(a) to (c) and (9) of Directive 2009/73 have not been correctly transposed into Belgian law. Several provisions of Belgian law do not give the regulatory authority, in the present case the CREG, the exclusive power to fix or approve the methodologies used to calculate or establish the terms and conditions for connection and access to national networks and the terms and conditions for the provision of balancing services.
85Some matters which should fall within the exclusive competence of the regulatory authority are included in the ‘technical regulation’, within the meaning of Article 11 of the Law on electricity, and in the ‘code of good conduct’, within the meaning of Article 15/5j of the Law on natural gas, which must be laid down by the King. The CREG’s competence is limited solely to monitoring the application of that technical regulation and that code of good conduct. Similarly, the CREG is responsible for approving documents which must be drawn up on the basis of the conditions for access laid down by the King.
86The Commission argues that that technical regulation and code of good conduct must comply with the provisions of the ‘Third Energy Package’, including those relating to the powers and independence of the regulatory authority. The regulatory authority should have the competence to lay down the provisions of that technical regulation and code of good conduct.
87Finally, in response to a question from the Court, the Commission stated that it was withdrawing its argument relating to Article 18(1)(2°) of the Law on electricity.
88The Kingdom of Belgium contends that it has transposed Article 37(6) and (9) of Directive 2009/72 by several provisions of the Law on electricity and the arrêté royal du 22 avril 2019, établissant un règlement technique pour la gestion du réseau de transport de l’électricité et l’accès à celui-ci (Royal Decree of 22 April 2019 establishing a technical regulation for the operation of the electricity transmission system and access thereto) (Moniteur belge of 29 April 2019, p. 41040) (‘the technical regulation’) and by the powers of approval conferred on the CREG, referred to in Parts 4, 5 and 6 of Title 4 thereof. Moreover, the Kingdom of Belgium takes the view that it transposed Article 41(6) and (9) of Directive 2009/73 by a number of provisions of the Law on natural gas and by the arrêté royal du 23 décembre 2010, relatif au code de bonne conduite en matière d’accès aux réseaux de transport de gaz naturel, à l’installation de stockage de gaz naturel et à l’installation de GNL et portant modification de l’arrêté royal du 12 juin 2001 relatif aux conditions générales de fourniture de gaz naturel et aux conditions d’octroi des autorisations de fourniture de gaz naturel (Royal Decree of 23 December 2010 on the code of good conduct concerning access to the natural gas transmission system, the natural gas storage facility and the LNG facility and amending the Royal Decree of 12 June 2001 on the general conditions for the supply of natural gas and the conditions for granting natural gas supply authorisations) (Moniteur belge of 5 January 2011, p. 181) (‘the code of good conduct’).
89In the first place, as regards the provisions of the Law on electricity and the Law on natural gas, on the one hand, the Kingdom of Belgium argues, with regard to the electricity market, that, although Article 23(2), second subparagraph, point 9°, of the Law on electricity appears to give the regulatory authority only the power to approve documents relating to connections, access and the balance requirement, that provision was implemented by Article 4 of the technical regulation, under which the CREG has exclusive competence to approve standard contracts relating to connection, access and the balance responsible party, as well as to the provision of balancing services.
90On the other hand, with regard to the gas market, Article 15/14(2), second subparagraph, points 6° and 6°a, of the Law on natural gas provides that the CREG must approve the main conditions for access to transmission systems and approve the transmission contract for access to an interconnection. Moreover, Article 15/1(3)(7°) thereof provides that the CREG is to approve the draft congestion management rules and may make a reasoned request to the system operator, inter alia, to amend those rules. Those provisions were implemented by Article 2(2)(2°) and (3°), Article 29(1), Article 77(1) and Article 96(1) of the code of good conduct. Thus, the CREG has exclusive competence to approve the main conditions for access to the transmission system and transmission services, as provided for in Article 2(1)(2°)(2) of that code, the regulation on access to the activity of natural gas transmission, as provided for in Article 29(1) thereof, the standard contract for natural gas transmission activities, as provided for in Article 77(1) of that code, and the standard connection contract and its amendments, as provided for in Article 96(1) thereof.
91With regard to Article 29(2), second subparagraph, point 9° of the Law on electricity and Article 15/14(2), second subparagraph, point 15° of the Law on natural gas, those provisions grant to the CREG the power to monitor the application of the technical regulation and the code of good conduct. The exclusive power of approval with which the CREG is thus vested allows it to determine the legal rules governing conditions for connection and access to national networks, conditions for the provision of balancing services and conditions for access to cross-border infrastructures, including the procedures for the allocation of capacity and congestion management. The CREG’s powers are not limited to monitoring the application of the conditions previously laid down by the King in the technical regulation. The fact that such powers result from a combined reading of the provisions of legislation and of implementing decrees adopted by the King does not have the effect of restricting such powers.
92In accordance with the provisions of Directives 2009/72 and 2009/73, the CREG approves the standard contracts which provide for the methodologies used to calculate or establish the terms and conditions for connection and access to national networks and the terms and conditions for the provision of balancing services. That constitutes approval by the regulatory authority of the standard contracts applicable to all and not the adoption of individual decisions. Article 31 of the Law on electricity and Article 20/2 of the Law on natural gas provide for the CREG to have appropriate powers relating to supervision and the imposition of penalties, in addition to the powers of approval required by Directives 2009/72 and 2009/73.
93As regards, in the second place, the establishment of the technical regulation and the code of good conduct, the Kingdom of Belgium argues that the King’s power to adopt, by Royal Decree, a technical regulation and a code of good conduct, after having received, respectively, the CREG’s opinion or proposal, is compatible with the provisions of Directives 2009/72 and 2009/73. The fact that the regulatory authority is unable to amend a measure which it does not have the competence to adopt is not incompatible with those provisions.
94As regards, in the third place, the provisions of the technical regulation and of the code of good conduct, the Kingdom of Belgium disputes that they may interfere with the exclusive competence of the CREG. First of all, the Commission did not precisely identify the articles of that regulation and that code, although the burden of proof lies with it. The complaint should be regarded as inadmissible.
95Next, it cannot be inferred from a reading of Article 11 and Article 23(2), second subparagraph, point 9°, of the Law on electricity and Article 15/5j and Article 15/14(2), second subparagraph, points 6° and 15°, of the Law on natural gas that the provisions of the technical regulation and of the code of good conduct – a regulation and code adopted by the King on the advice or proposal of the CREG – entrusts to the King an exclusive competence which should be conferred on the CREG.
96Finally, Directives 2009/72 and 2009/73 form part of the broader framework of Regulations No 714/2009 and No 715/2009, which provide for the establishment of network codes applicable to all Member States. As regards connections in the electricity sector, three codes were adopted by the Commission. Recital 2 of each of those codes recalls the distinction to be drawn between the scope of Article 5 of Directive 2009/72 and the scope of Article 37(6) of that directive. Article 7(1) of Commission Regulation (EU) 2016/631 of 14 April 2016 establishing a network code on requirements for grid connection of generators (OJ 2016 L 112, p. 1), Article 6(1) of Commission Regulation (EU) 2016/1388 of 17 August 2016 establishing a Network Code on Demand Connection (OJ 2016 L 223, p. 1), and Article 5(1) of Commission Regulation (EU) 2016/1447 of 26 August 2016 establishing a network code on requirements for grid connection of high voltage direct current systems and direct current-connected power park modules (OJ 2016 L 241, p. 1) allow Member States to confer on an authority other than the regulatory authority the competence to approve the requirements of general application to be established by the relevant system operators.
97That is the reason for the adoption of the technical regulation, which had the effect of approving, in accordance with the EU network codes, those application requirements. The provisions of the technical regulation transpose Article 5 of Directive 2009/72 and do not constitute an appropriation by the King of a competence of the CREG, and nor do they have the effect of restricting the power of that authority to approve the methodologies and rules referred to in Article 37(6) and (9) of Directive 2009/72.
–Assessment of the Court
98As regards, in the first place, the plea of inadmissibility raised by the Kingdom of Belgium, that plea cannot be upheld, since the Commission, in its complaint, has adequately indicated several provisions of the Law on electricity and the Law on natural gas which it regards as incompatible with Article 37(6) and (9) of Directive 2009/72 and Article 41(6) and (9) of Directive 2009/73, with the result that it is possible to understand that complaint. Moreover, that Member State has been in a position to understand and respond to it.
99As regards, in the second place, the merits, Article 37(6)(a) to (c) and (9) of Directive 2009/72 and Article 41(6)(a) to (c) and (9) of Directive 2009/73 provide that it is for the regulatory authority to fix or approve at least the methodologies used to calculate or establish the terms and conditions for connection and access to national networks, the terms and conditions for the provision of balancing services and the terms and conditions for access to cross-border infrastructures, including the procedures for the allocation of capacity and congestion management, as well as to request amendments by transmission system operators or market operators of their congestion management rules, including capacity allocation, which they are required to submit to that authority.
100As stated in recital 34 of Directive 2009/72 and recital 33 of Directive 2009/73, if the internal market in electricity and natural gas is to function properly, regulators need to be able to take decisions in relation to all relevant regulatory issues and to be fully independent from any other public or private interests.
101In the present case, however, Article 11 of the Law on electricity and Article 15/5j of the Law on natural gas give the King the power to establish, respectively, the technical regulation for the operation of the electricity transmission system and access thereto and the code of good conduct concerning access to the natural gas transmission system, the natural gas storage facility and the LNG facility.
102According to those provisions, in laying down that technical regulation and that code of good conduct, the King may define certain operational requirements and rules, as well as various procedures, conditions and details which, pursuant to Article 37(6)(a) to (c) and (9) of Directive 2009/72 and Article 41(6)(a) to (c) and (9) of Directive 2009/73, should fall within the competence of the regulatory authority.
103Thus, in particular, Article 11, second paragraph, points 1° and 5°, of the Law on electricity provides that the technical regulation is to define the connection deadlines and the information to be provided by users of the system to the system operator. Moreover, Article 15/5j, second subparagraph, points 1°, 2°, 4° and 7°, of the Law on natural gas provides that the code of good conduct is to define the procedures and detailed rules for requesting access to the network and the information to be provided by users of the system to the system operator, the time limits within which the system operator must respond to requests for access to its system and facility, and the basic principles relating to the rights and obligations of, on the one hand, the natural gas transmission system operator and, on the other hand, the users of the natural gas transmission system for access to that system.
104Accordingly, it is provided that the technical regulation and the code of good conduct are to determine the rules, information and principles relating to the terms and conditions for connection and access to national networks, within the meaning of Article 37(6)(a) of Directive 2009/72 and Article 41(6)(a) of Directive 2009/73. However, according to those provisions of EU law, the regulatory authority should be responsible for fixing or approving those terms and conditions or, at least, the methodologies used to establish them.
105Similarly, Article 11, second paragraph, points 2° and 7°, of the Law on electricity provides that the technical regulation is to define the operational rules to which the system operator is subject in its technical management of electricity flows and that it is in accordance with that technical regulation that the system operator’s contracts for access to the network are to specify the procedures for implementing access to the network for system users in a non-discriminatory manner. Moreover, Article 15/5j, second subparagraph, points 5° and 9°, of the Law on natural gas provides that the code of good conduct is to define the measures aimed at avoiding any discrimination between users or categories of users of the natural gas transmission system, as well as the basic principles relating to the rights and obligations of, on the one hand, the natural gas transmission system operator and, on the other hand, the users of the natural gas transmission system with regard to the use of that system.
106Accordingly, the rules, measures and principles thus defined by the technical regulation and the code of good conduct may cover the terms and conditions for the provision of balancing services, which must be fair and non-discriminatory. However, according to Article 37(6)(b) of Directive 2009/72 and Article 41(6)(b) of Directive 2009/73, the regulatory authority should be responsible for fixing or approving those terms and conditions or, at least, the methodologies used to establish them.
107Moreover, Article 11, second paragraph, points 2° and 6°, of the Law on electricity provides that the technical regulation is to define the operational rules to which the system operator is subject with respect to the actions which it must undertake to remedy congestion problems, and the information to be provided by the system operator to the operators of other electricity systems with which the transmission system is interconnected, with a view to ensuring the secure and effective operation, coordinated development and interoperability of the interconnected system. Furthermore, Article 15/5j, second paragraph, point 9°, of the Law on natural gas provides that the code of good conduct is to define the basic principles relating to the rights and obligations, on the one hand, of the natural gas transmission system operator and, on the other hand, of the users of the natural gas transmission system, as regards negotiation for access to transmission capacity and congestion management.
108Accordingly, the rules, information and principles thus defined by the technical regulation and the code of good conduct may cover access to cross-border infrastructures, including the procedures for the allocation of capacity and congestion management. However, according to Article 37(6)(c) of Directive 2009/72 and Article 41(6)(c) of Directive 2009/73, it is the regulatory authority which should be responsible for fixing or approving the access and procedures concerned or at least the methodologies used to establish them, and that authority should also be responsible for monitoring congestion management, pursuant to paragraph 9 of each of those articles.
109In such a context, the King’s involvement in determining a number of conditions which should, according to Directives 2009/72 and 2009/73, be established or approved by the CREG itself, removes from the CREG the regulatory powers with which it should be vested (see, by analogy, judgment of 29 October 2009, Commission v Belgium, C‑474/08, not published, EU:C:2009:681, paragraph 29).
110As a regulatory authority, the CREG should be able to adopt its decisions autonomously, solely on the basis of the public interest, in order to ensure compliance with the objectives pursued by that directive, and should not be subject to external instructions from other bodies, such as the King (see, by analogy, judgment of 11 June 2020, Prezident Slovenskej republiky, C‑378/19, EU:C:2020:462, paragraph 54).
111It is important to add that the arguments relied on by the Kingdom of Belgium are not such as to refute the second part of the second complaint.
112In that regard, the arguments based on Regulations No 714/2009 and No 715/2009 are not relevant, since they concern conditions for access to the network for cross-border exchanges and are not intended to amend the provisions of Directives 2009/72 and 2009/73 covered by the present action, which concern the competence of the regulatory authority to fix or approve at least the methodologies used to calculate or establish, inter alia, the terms and conditions for connection and access to national networks.
113As regards the arguments relating to Regulations 2016/631, 2016/1388 and 2016/1447, the repeal of Article 5 of Directive 2009/72 and the adoption of the technical regulation, it should be recalled that it is settled case-law that the question whether a Member State has failed to fulfil obligations must be determined by reference to the situation prevailing in the Member State at the end of the period laid down in the reasoned opinion and the Court cannot take account of any subsequent changes (judgment of 15 March 2017, Commission v Spain, C‑563/15, not published, EU:C:2017:21016, paragraph 25 and the case-law cited). Those regulations, the repeal of Article 5 of Directive 2009/72 and the adoption of the technical regulation therefore cannot be taken into account in the context of the examination of the present action, since they were adopted after the expiry of the time limit laid down in the reasoned opinion.
114In any event, although Regulations 2016/631, 2016/1388 and 2016/1447 are intended to establish harmonised rules concerning grid connection, they are not intended to amend the rules on competence as provided for in Article 37(6)(a) to (c) and (9) of Directive 2009/72 and Article 41(6)(a) to (c) and (9) of Directive 2009/73, or to exempt Member States from the obligation to transpose those provisions.
115Consequently, the Kingdom of Belgium has failed to fulfil its obligations under Directives 2009/72 and 2009/73, by failing correctly to transpose Article 37(6)(a) to (c) and (9) of Directive 2009/72 and Article 41(6)(a) to (c) and (9) of Directive 2009/73.
Costs
116Under Article 138(1) of the Rules of Procedure of the Court of Justice, the unsuccessful party is to be ordered to pay the costs if they have been applied for in the other party’s pleadings.
117Since the Commission has applied for costs and the Kingdom of Belgium has been unsuccessful, the latter must be ordered to pay the costs.
Operative part
On those grounds, the Court (Tenth Chamber) hereby:
1.Declares that the Kingdom of Belgium has failed to fulfil its obligations under Directive 2009/72/EC of the European Parliament and of the Council of 13 July 2009 concerning common rules for the internal market in electricity and repealing Directive 2003/54/EC, and under Directive 2009/73/EC of the European Parliament and of the Council of 13 July 2009 concerning common rules for the internal market in natural gas and repealing Directive 2003/55/EC, by failing correctly to transpose:– Article 9(1)(a) of each of Directives 2009/72 and 2009/73;– Article 37(4)(a) and (b) of Directive 2009/72 and Article 41(4)(a) and (b) of Directive 2009/73, and– Article 37(6)(a) to (c) and (9) of Directive 2009/72 and Article 41(6)(a) to (c) and (9) of Directive 2009/73;
2.Orders the Kingdom of Belgium to pay the costs.
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