Energy Community certification

Transportgas is a limited liability company, whose founder and sole shareholder is the Republic of Serbia, and whose main field of activity is the transport of natural gas. The control by the Republic of Serbia over Transportgas is exercised through the Republic Commission for Energy Networks. Transportgas applied for certification as an independent system operator (ISO) on 25 July 2024.

In its Preliminary Decision, AERS concluded that Transportsgas complies with Article 14 of the Gas Directive.

In Opinion 3/24, the Secretariat raises several concerns, for example regarding the compliance of the transmission system owner with the requirement of legal unbundling under Article 15(1) of the Gas Directive and with the some of the system owner’s obligations in Article 14(5) of the Gas Directive.

EMS is a joint stock company and its founder and the only shareholder is the Republic of Serbia. The owner’s rights are exercised by the Government.

In the period after the Secretariat issued its negative Opinion 3/17 on the AERS Preliminary Decision concerning the certification of EMS with a finding that separation of control within the State has not taken place even in its most basic requirement, the designation of two public bodies, and before the adoption of the Final Decision of AERS, the Serbian Parliament adopted amendments to the Law on Ministries. Article 4 of the Law on Ministries, specifying the competences of the ministries were amended in a way that two different public bodies (Ministers) were given right to preparing “proposals for acts on appointment and dismissal of management bodies” of EMS on the one hand and of the companies performing activity of production and supply of electricity and gas. On the one hand, the Secretariat’s Opinion was not made on the same set of facts and laws as AERS’ Final Decision. On the other hand, the Final Decision on the basis of new legislation raises a number of issues on which the Secretariat had no opportunity to give its Opinion to AERS and which seem to require a more in-depth against the Electricity Directives provisions on ownership unbundling. Therefore, the Secretariat submitted to AERS a request for re-opening the certification procedure pursuant to Article 10(4)c) of the Electricity Directive, to which AERS responded negatively and failed to reassess compliance of EMS with the unbundling criteria despite the changed legal framework.

Yugorosgaz-transport is a company established in October 2015 for the purpose of natural gas transport in Southern Serbia. Its owner is Yugorosgaz JSC, Belgrade, owned by Gazprom (50%), Srbijagas (25%) and Centrex Europe Energy & Gas AG (25%).

The AERS has made conditional certification of Yugorosgaz-transport as independent system operator (ISO) in both Preliminary and Final Decision. Both ECRB and ECS have concluded in their opinions that Yugorosgaz-transport is not able to operate the system effectively and independently from the system owner Yugorosgaz, for reasons of  unavailability of sufficient resources and the control of Yugorosgaz and Gazprom over Yugorosgaz-Transport, and also have emphasized the importance of assessment of security of supply issue, given that Gazprom, company established in a third country, holds 50% of shares of Yugorosgaz-transpot's owner, Yugorosgaz. Due to the certification of Yugorosgaz-Transport under the Independent System Operator model by AERS without fulfilling the requirements, the Ministerial Council adopted a decision establishing a breach by Republic of Serbia in Case ECS 10/17 and AERS has revoked its certification decision.

Gastrans is a project developer of natural gas pipeline project, that aims at transporting natural gas from Turkey (using capacities of the so-called TurkStream pipeline) and Bulgaria, and it was expected to start commercial operation on 1 January 2020. It is ultimately owned by Srbijagas (49%) and Russian natural gas holding Gazprom (51%). AERS certified Gastrans according to ITO model, and exempted it from TEP rules (unbundling, TPA and tariff setting) for period of 20 years.

The Secretariat's opinions and AERS’s decisions were diverging in both procedures on the exemption of Gastrans and the certification of Gastrans. In its Opinion 01/2019 on Exemption Decision, Secretariat concluded that the exemption of Gastarns’s Project from TEP rules is detrimental to competition due to dominant positions of Gastrans’s shareholders on Serbian gas market (Gazprom and Srbijagas) and that subsequently, the certification of Gastrans as an ITO is not an option, due to unlawful exemption from TEP rules and due to fact that ITO model is not applicable to a case which did not belong to a vertically integrated undertaking on 6 October 2011.However, AERS did not take of the utmost account the Opinion of Secretariat and has certified Gastrans as an independent transmission operator.

Joint Stock Company NOMAGAS, the gas transmission system operator in the Republic of North Macedonia, is the result of a merger between two companies, National Energy Resources AD Skopje and GA-MA AD Skopje in 2022.

On 22 January 2024, the Energy and Water Services Regulatory Commission of the Republic of North Macedonia concluded that NOMAGAS can be certified under the ownership unbundling model.

On 21 May 2024, the Secretariat issued Opinion 1/24, in which it largely supports the certification of NOMAGAS in line with the Preliminary Decision. In its Opinion the Secretariat recommended that, in the future, the functions of transmission system operator and market operator are performed by two different entities, not only by NOMAGAS, thus ensuring an additional layer of oversight in the market.
 

MEPSO is an electricity TSO, established in a form of Joint Stock Company and its sole shareholder is the Ministry for Transport and Communications.

Upon a positive opinion by the Secretariat, the Energy Regulatory Commission has unconditionally certified MEPSO under the Ownership Unbundling Model.

There is no certified gas transmission system operator in the Republic of North Macedonia. GA-MA is the only licensed gas transmission system operator operating in North Macedonia. It is owned by the Republic of North Macedonia and Makpetrol, a vertically integrated company in charge of import and supply of gas and is not unbundled under the rules of the Third Energy Package.

Ukrenergo is a state-owned joint stock company, and the ownership of the state was exercised by the Ministry of Finance under economic management rights. With the amendments to the Electricity Market Law of April 2021, the ISO unbundling model has been transposed (in addition to the ownership unbundling model) and Ukrenergo submitted second application for certification under this model. In its Preliminary Decision, NEURC came to the conclusion that Ukrenergo can be certified preliminarily, but conditioned final certification on a number of measures to be taken and evidence to be submitted by the applicant. In its Preliminary Decision, NEURC stated that “in case of change of circumstances on the basis of which the previous decision on certification of the TSO was made, in particular, change of the transmission system owner or corporate rights management body of the state in the authorized capital of Ukrenergo, NEURC shall inform the Energy Community Secretariat and has the right to cancel the previous decision on certification of the transmission system operator and start a new certification process.”

On 28 July 2021, the Cabinet of Ministers of Ukraine adopted a Resolution and transferred the authority to manage corporate rights and the state property (based on economic management rights granted to Ukrenergo) owned by the state in Ukrenergo from the Ministry of Finance to the Ministry of Energy. Such transfer entails a change in control over the TSO as well as a change in the function of the transmission network owner.

On 17 December 2021, Ukrenergo was conditionally certified under the ISO model. In its final decision, NEURC took into account the Secretariat’s requests and recommendations from its Opinion 4/21. The Secretariat had raised concerns about Ukrenergo’s financial viability, and about interventions by state authorities in the corporate bodies of the transmission system operator (TSO). In the meantime, a supervisory board with a majority of independent members has been appointed. According to the final decision, the Ministry of Energy as shareholder of Ukrenergo, will also have to continue its internal restructuring meant to ring-fence the TSO from political decisions, and to propose solutions addressing the risks to the company’s liquidity.

Ukrenergo is a state-owned joint stock company, and the ownership of the state is exercised by the Ministry of Finance under economic management rights.

The Secretariat has issued a negative opinion on the NEURC’s preliminary decision for certification of Ukrenergo, concluding that Ukrenergo cannot be certified according to the ownership unbundling model, since one of the main criteria – ownership of the transmission assets by the TSO - is not fulfilled. Namely, Ukrenergo exercised only economic management right over the transmission assets, meaning that it neither owns the transmission assets nor has other rights equivalent to an owner over those assets. Taking into account the Secretariat’s Opinion, NEURC adopted a final decision rejecting the certification of Ukrenergo under the ownership unbundling model in April 2021.

GTSO was established in February 2019 as a subsidiary of the joint stock company Ukrtransgaz, which is a 100% subsidiary of the vertically integrated gas undertaking Naftogaz of Ukraine. At the time of issuance of the Secretariat’s opinion, the transmission system operation was effectively conducted by Ukratransgaz. When adopting the Final Decision, NEURC took into account the Secretariat’s opinion and obliged the GTSO to provide evidence on fulfillment of the conditions by July 2020, upon which the new assessment of compliance would be conducted by the NEURC, the Secretariat and Antimonopoly Committee of Ukraine. 

KOSTT is an electricity transmission system operator, established as a joint stock company. It is in public ownership and the shareholding rights are exercised by the Assembly of Kosovo.*

The Secretariat has supported the certification of KOSTT in line with ERO’s Preliminary Decision, recommending additionally appointment of Compliance Officer and the adoption of Compliance Program, and further requesting from ERO to assess and elaborate on the matters related to separation of control and the relations between KOSTT and the Government, the Ministry of Economic Development and the Ministry of Finance. In its Final Decision, ERO has taken into account the Secretariat’s opinion and has certified KOSTT unconditionally requiring an appointment of a Compliance Officer and adoption of a Compliance Program in the period of 6 months of adoption of the Final Decision.

With the adoption of a Compliance Program and appointment of a Compliance Officer, the conditions from ERO’s final certification decision of KOSST have been fulfilled.

Two companies in Bosnia and Herzegovina are active in the electricity transmission: NOS BiH Sarajevo, acting as an independent system operator and operating competitive balancing market and JSC Elektroprenos Banja Luka (also called TransCo), acting as a transmission operator. Both companies are controlled by the entities’ governments that are also responsible for operation of the public generation and supply utilities. Elektroprenos is 100% owned by the two entities: Federation of BiH 58.90% and Republika Srpska 41.10%. The authority exercising the rights of the owners is the Ministry of Foreign Trade and Economic Relations of Bosnia and Herzegovina, whereas for NOS BiH no shares are issued.

There is no legal framework transposing the Third Energy Package in Bosnia and Herzegovina governing unbundling of the electricity transmission system operator(s). The draft Law on Regulator, Transmission and Electricity Market and the complementary law on the establishment of a transmission system operator for electricity, both aiming to transpose the Third Package at the state level, are prepared, but have not been adopted so far.

Gaspromet AD Pale is a joint stock company in the Republika Srpska. It is owned 65% by the State owned Fund, 10% by the Pension Fund, 5% by the Restitution Fund and 20% Investment funds & private small shareholders. Even though there is no law on state level that governs the gas market, Republika Srpska transposed the unbundling and certification requirements in line with the gas acquis on the territory of this entity in March 2019. The relevant institutional competences are assigned only to the entity regulator, completely omitting any reference to state-level institutions.

REERS adopted a preliminary decision for certification of GAS PROMET Pale and submitted it for an opinion to the Secretariat. Taking into account the opinion of the Secretariat, REERS certified Gaspromet Pale as a gas TSO operating the pipeline sections Šepak-Karakaj and Karakaj-Zvornik.

There are two other natural gas transmission system operators in Bosnia and Herzegovina. BH Gas d.d.o. is 100% owned by the Government of Federation BiH, which acts as a TSO at entity level but also performs activities of import and wholesale activities at the state level. Sarajevogas AD Istocno Sarajevo is a joint stock company and acts as transporter in Republika Srpska. The company performs transport, distribution system operation and retail supply in Republika Srpska.

Those two companies are neither unbundled nor certified.

GSE is the State-owned TSO for electricity in Georgia and the State’s shares of GSE are represented by the Ministry of Economy and Sustainable Development. After the merger with the fully State-owned Energotrans, GSE owns and operates also the transmission assets previously operated by Energotrans. In January 2021, GSE concluded a lease agreement with Sakrusenergo, a company that holds another transmission license issued by GNERC, and the shares of which are owned 50% by the State of Georgia, represented by the Ministry of Economy and Sustainable Development, and 50% by the Federal Grid of the United Energy System JSC registered in the Russian Federation.

In its Opinion, the Secretariat concluded that GSE is currently not unbundled in line with the ownership unbundling model as required by Article 9 of the Electricity Directive. In addition to asking GNERC to assess several issues in more detail, it required GNERC to include a statement in the operative part announcing the opening of a recertification procedure for the assessment of compliance by GSE with the unbundling criteria, once the conditions imposed by the Final Decision are fulfilled, including a request for a new Opinion by the Secretariat.

GNERC took into account the Secretariat’s Opinion and gave a deadline to GSE to comply with the conditions from the Final Decision by 31 December 2021. GNERC also included a statement in the operative part of the decision, pointing out that after submission of the required documents proving compliance with the unbundling criteria, GNERC will re-open the certification procedure and will submit another Preliminary Decision to the Secretariat for an opinion.

GSE is the State-owned TSO for electricity in Georgia and and the State’s shares of GSE are represented by the Ministry of Economy and Sustainable Development. After the merger with the fully State-owned Energotrans, GSE owns and operates also the transmission assets previously operated by Energotrans. In January 2021, GSE concluded a lease agreement with Sakrusenergo, a company that holds another transmission license issued by GNERC, and the shares of which are owned 50% by the State of Georgia, represented by the Ministry of Economy and Sustainable Development, and 50% by the Federal Grid of the United Energy System JSC registered in the Russian Federation.

In its Opinion, the Secretariat agreed with GNERC’s assessment from the Preliminary Decision and its conclusions that GSE does not comply with the unbundling provisions enshrined in Article 9 of the Electricity Directive. Most notable, GSE is still directly and indirectly controlled by the same public body controlling also the public companies active in generation and/or supply of natural gas or electricity.

GNERC took into account the Secretariat’s Opinion and refused certification of GSE. It gave a deadline to GSE to comply with the conditions from the Final Decision by 1 August 2022 and to notify GNERC of fulfilling those conditions by 8 August 2022. GNERC also included a statement that GSE will be fined with 10% of its annual turnover for 2021 in case of non-compliance with the requirements of the Decision.

LLC “Georgian Gas Transportation Company” GGTC is a limited liability company established under Georgian law and the State’s shares of GGTC are represented by the Ministry of Economy and Sustainable Development. GGTC does not legally own the physical assets used for the transmission of gas. They are owned by GOGC, a company active in the production, supply and trade of natural gas as well as generation of electricity. On 29 April 2021, GOGC founded LLC Georgian Natural Gas Transmission Owner (hereinafter “TNO”) and transferred ownership over the transmission system assets to it. GGTC concluded an agreement on the rent of the main gas pipelines and related infrastructure with GOGC in 2011 valid until 1 January 2022.

In its Opinion, the Secretariat concluded that GGTC does not comply with the unbundling provisions due to the State as sole shareholder also controlling companies active in production/supply activities in the gas/electricity sectors. Moreover, the lack of a lease agreement with the TNO precludes GGTC from having at its disposal the necessary technical and physical resources to perform the tasks of a TSO enshrined in Article 13 of the Gas Directive, and to comply with its obligations under the Gas Regulation. Furthermore, the TNO did not provide evidence for its ability to comply with its obligations under Article 14(5) of the Gas Directive. Finally, independence of the TNO from GOGC is not fully ensured because no compliance programme has been established as required under Article 15(2) of the Gas Directive.

LLC “Georgian Gas Transportation Company” GGTC is a limited liability company established under Georgian law and the State’s shares of GGTC are represented by the Ministry of Economy and Sustainable Development. GGTC does not legally own the physical assets used for the transmission of gas (in particular pipelines and (two currently inactive) compressor stations). They are owned by GOGC. On 29 April 2021, GOGC founded LLC Georgian Natural Gas Transmission Owner (hereinafter “TNO”) and transferred ownership over the transmission system assets to it. A  lease agreement was concluded between GGTC and TNO on 3 February 2022 and approved by GNERC.

In its Opinion, the Secretariat concluded that GGTC does not comply with the unbundling provisions due to the State as sole shareholder also controlling companies active in production/supply in the gas/electricity sectors. Most notably, GGTC is still directly and indirectly controlled by the same public body controlling also the public companies active in generation and/or supply of natural gas or electricity.

GNERC took into account the Secretariat’s Opinion and refused certification of GGTC. It gave a deadline to GGTC to comply with the conditions from the Final Decision by 1 August 2022 and to notify GNERC of fulfilling those conditions by 8 August 2022.

CGES is a joint stock company, owned by several shareholders: the State of Montenegro (55 %), Italian electricity TSO Terna S.p.A. (cc. 22.1%); Serbian electricity TSO, Elektromreže Srbije-EMS (10 %), custodial accounts, funds and other legal persons (5.3 %) and natural persons (7.5%).

The transmission system operator was conditionally certified by the national regulatory authority in 2018, following the Secretariat’s positive Opinion. The conditions to appoint a compliance officer and to initiate amendments to the Energy Law or an enabling regulation to ensure the separation of control, in order to exclude the influence of the Ministry of Finance on the decisions of the Government when it comes to proposing the members of the management bodies as state capital representatives in the EPCG and Montenegro Bonus, have been fulfilled. The amendments of the Energy Law have been adopted and with that all conditions from the final decision have been complied.

Moldelectrica is a state-owned enterprise under Moldovan law. Its Founder, the Ministry of Energy, is the sole shareholder of the company and exercises the functions and attributions of the State as an owner. With the amendments to the Electricity Law in February 2022, the ISO unbundling model has been transposed (in addition to the ownership unbundling model) and Moldelectrica submitted its second application for certification under this model.

In its Preliminary Decision, ANRE came to the conclusion that Moldelectrica can be certified preliminarily as an independent system operator.

In its Opinion 02/2023, the Secretariat raised concerns about potential conflicts of interest between persons and institutions engaged in transmission activities, on the one hand, and persons and institutions engaged in supply and generation activities, on the other. To address this, the Secretariat requested ANRE to introduce a number of additional safeguards before issuing the Final Decision. Among others, the Secretariat requests that a supervisory board with a majority of independent members is established in Moldelectrica after the expiry of the current members’ mandates.

Upon a positive opinion by the Secretariat, ANRE  has conditionally certified Moldelectrica under Independent System Operator Model.

Moldelectrica is a State enterprise and its founder is the Ministry of Economy and Infrastructure, which performs the functions of the State as an owner.

On 11 October 2019, the Secretariat issued a negative opinion on Preliminary Decision on certification of Moldelectrica because the conditions on separation of control and ownership over transmission were not fulfilled. In particular, Moldelectrica does not own the transmission assets, which is one of the conditions for certification under the ownership unbundling model. In addition, both Moldelectrica, and the Public Property Agency (which exercises direct control over the state companies involved in generation and supply activities of electricity and gas), were directly controlled by the same public body, the Ministry of Economy.

Final Decision has not yet been adopted by ANRE. It expected to be completed after the transposition of the Independent System Operator in the Law on Electricity.

Vestmoldtransgaz, VMTG, has been operating the Moldovan gas transmission system previously operated by Moldovatransgaz since 19 September 2023, and applied for certification on 18 October 2023.

In the Preliminary Decision, ANRE concluded that VMTG largely complies with the requirements of the provisions regarding the independent system operator. However, when assessing the independence of the transmission system owner in relation to the vertically integrated undertaking, it found that persons responsible for the management of the transmission system owner Moldovatransgaz LLC participate in company structures of the integrated natural gas undertaking responsible, directly or indirectly, for the day-to-day operation of the supply of natural gas Moldovagaz JSC, which is not in line with Article 15(2)(a) of the Gas Directive.

In its Opinion 2/24, the Secretariat raises additional concerns about the lack of unbundling of some transmission system owners, as well as the fact that one of the transmission system owners performs extensive maintenance works. To address these and the rest of the concerns, the Secretariat requests ANRE to perform a series of additional analyses, including under Article 11 of the Gas Directive regarding Gazprom’s control over the owners of the gas transmission network, and to ensure that several conditions are met.

Vestmoldtransgaz, an emerging transmission system operator, was founded by the Moldovan Government and sold in 2018 to Eurotransgaz, a company owned by the Romanian TSO Transgaz.

On 9 July 2021, the Secretariat issued Opinion 2/2021, in which largely supported the certification of Vestmoldtransgaz in line with ANRE’s Preliminary Decision no 89/2021. However, the Secretariat found that before its commercial operation date (envisaged for 1 October 2021), Vestmoldtransgaz is not yet performing actual transmission services, but fulfills other important tasks of a transmission system operator. The Secretariat suggested that ANRE, in its Final Decision, demands that Vestmoldtransgaz presents ANRE a detailed roadmap with the remaining milestones leading to full commercial operation on 1 October 2021, and that all milestones are completed at least one month before commercial operation date.

The derogation for unbundling and certification of Moldova's gas TSOs expired on 1 January 2020.