summary of the case
| status: | closed by Ministerial Council Decision / complied after Art.91 MC Decision |
|---|---|
| registered: | upon complaint 01.09.2015 |
Ukraine was under an obligation to implement Regulation (EC) 714/2009 on conditions for access to the network for cross-border exchanges in electricity and the so-called Congestion Management Guidelines by 1 January 2015. This commitment entails the obligation to transpose this legislation and to apply them to the allocation of cross-border capacity for electricity.
The Secretariat had received a complaint concerning the cross-border capacity allocation for transit performed by the Ukrainian TSO, Ukrenergo. Upon receiving the complaint, the Secretariat assessed the compliance of the Auction Rules, including their latest amendments of March 2017, adopted by the regulatory authority.
The Secretariat considers that linking the allocation of cross-border capacity with the undertakings‘ participation to, and the functioning of, the wholesale electricity market operated by a single buyer, the different treatment of interconnectors‘ capacities allocation for export on the one hand, and import and transit on the other hand, as well as requiring the Ministry’s approval for the latter two activities, constitute breaches of Energy Community law in the Secretariat’s preliminary assessment.
The Ministerial Council has already expressed itself on the non-compliance of different treatment of electricity imports and exports under Ukrainian law with Energy Community law in Case ECS-01/12.
With the adoption of Decision 2018/05/MC-EnC the procedure under Article 91 of the Treaty in Case ECS 08/15 is closed.
procedural history
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24 May 2017: Opening Letter
Case
On 24 May 2017, the Energy Community Secretariat sent an Opening Letter to Ukraine in accordance with the Rules of Procedure for Dispute Settlement. The Secretariat, takes the preliminary view that the existing legislation on allocating cross-border capacity and its application in Ukraine is not compliant with the Energy Community acquis communautiare related to allocation of cross-border capacity for transit. Ukraine has been given the possibility until 24 July 2017 to comply of its own accord with the requirements of the Treaty, or to justify its position.
Procedure
Given the importance of cross-border capacity allocation for the establishment of an internal electricity market as pursued by the Energy Community Treaty, the Secretariat decided to initiate the present proceedings under Article 90 of the Treaty upon a complaint. The purpose of this initial step in the procedure is to give Ukraine the possibility to react to the allegation of non-compliance with Energy Community law, and enabling the Secretariat to establish the full factual and legal background of the case.
According to Articles 7 and 17 of the Rules of Procedure for Dispute Settlement, interested parties may be granted access to the case file and may submit written observations on the present case to the Secretariat during the preliminary procedure.
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15 March 2018: Reasoned Opinion
Steps taken
On 15 March 2018, the Energy Community Secretariat submitted a Reasoned Opinion in Case ECS-8/15 against Ukraine, for its failure to comply with the rules for allocation of cross-border capacity related to transit of electricity. Having taken into account the Government’s reply to the Opening Letter, as well as the follow-up activities undertaken for rectifying the breaches identified in the Opening Letter, the Secretariat considers that the argumentation provided therein as well as the developments in electricity sector reform until today do not change its finding of an infringement of Energy Community law.
Procedure
A Reasoned Opinion is the second step in a dispute settlement procedure initiated by the Secretariat under Article 90 of the Energy Community Treaty. Depending on the Government's reply, the Secretariat may submit the case to the Ministerial Council for a decision on Ukraine’s compliance with Energy Community law.
Ukraine is now requested to rectify the identified issues of non-compliance within a time limit of two months.
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28 May 2018: Reasoned Request
On 28 May 2018, the Secretariat submitted a Reasoned Request on the Case ECS-08/15 following failure of Ukraine to rectify the breaches identified by the Secretariat.
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29 November 2018: Decision on the failure
Steps taken
By maintaining in force its current regime for allocation of cross-border capacity for transit of electricity, Ukraine fails to fulfil its obligations under the Energy Community Treaty, and in
particular Article 41 thereof, Articles 3(1), 12(f) and 32(1) of Directive 2009/72/EC, Articles 16(1) and 19 of Regulation (EC) 71412009 as well as Section 2.1 of the Congestion Management
Guidelines as incorporated and adapted by Decision 2011/12/MC-EnC of the Ministerial Council of the Energy Community of 6 October 2011.
Procedure
Ukraine shall report regularly to the Secretariat and the Permanent High Level Group about the measures taken in 2019. lf the breach has not been rectified by 1 July 2019, the Secretariat is invited to initiate a procedure under Article 92 of the Treaty.
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1 July 2019: closure of the case
With the energy into force of the new electricity market model, allocating capacity at interconnectors for transit was allowed, and by implementing non-discriminatory auctions Ukraine ensured compliance with the Ministerial Council decision.