Dr Robert Zajdler

How many transmission system operators in Poland?

The Third European Energy Liberalisation Package permits the existence of multiple transmission system operators for electricity and gas. Under current Polish law, however, there has been only one operator for each system.

The European Union’s new legal solutions concerning the model for the electricity and natural gas markets, known as the Third Energy Liberalisation Package, which Poland is required to implement into the domestic legal system by 3 March 2011, introduce fundamental changes in the functioning of transmission system operators for electricity and gas. These changes make it necessary to make different arrangements for TSOs on the Polish domestic market.

The Polish Energy Law, in Art. 9(h)(2) and 9(k), requires appointment of a single TSO for the gas system and a single TSO for electricity, or both combined. The TSOs must operate in the form of a joint-stock company whose sole shareholder is the Polish State Treasury. The option to impose this type of restriction was given to member states under the Second Energy Liberalisation Package—Art. 7 of the Second Gas Directive (2003/55/EC) and Art. 8 of the Second Electricity Directive (2003/54/EC).

The new regulations, set forth in Art. 10 of the Third Gas Directive (2009/73/EC) and Art. 10 of the Third Electricity Directive (2009/72/EC), in conjunction with rules for separate ownership at the transmission level, permit the existence of multiple TSOs which are not necessarily Treasury-owned companies. Thus the number of TSOs in Poland may increase.

This is also backed by EU regulations for unbundling of transmission systems from vertically integrated enterprises (Third Electricity Directive Art. 9, 13 & 17–23 and Third Gas Directive Art. 9, 14 & 17–23). These regulations provide four models for unbundling: full ownership unbundling, independent system operator (ISO), independent transmission operator (ITO), or variations on the ITO model (known as “ITO+”). The ownership unbundling model applies as the baseline rule, but member states have the additional option of using another of these models.

Ownership unbundling means that the owner of the transmission system will function as the operator in the system. Thus, for example, an investor who builds a new transmission interconnection will not be required to transfer ownership of the interconnection to existing operators, but will be able to seek the role of operator in this system.

It should be anticipated that these changes will be reflected in new Polish regulations concerning the electricity and gas sectors, which should come into force on 3 March 2011. Changes with respect to charges for use of transmission services may also have an impact on competition between TSOs, particularly in certain connections within the EU.

Dr. Robert Zajdler