EU/Austria: TSO certification proceedings reveal Austrian gas law’s possible non-compliance with EU Gas Directive

On 18 July 2014, the Austrian energy regulatory authority E-Control released its affirmative decision in relation to the certification of Trans Austria Gasleitung (TAG) as a transmission system operator (TSO) for gas. In its decision, E-Control not only requires TAG to be comprehensively restructured, but also takes a stance on the European Commission’s (EC’s) opinion on the potential non-compliance of the Austrian Natural Gas Act 2011 (Gaswirtschaftsgesetz, or GWG) with EU unbundling rules.

In November 2013, TAG filed a request for TSO certification in accordance with the independent transmission operator (ITO) model. In accordance with article 10, para 6, of the EU Gas Directive 2009/73/EC, E-Control, which is in charge of the TSO certification proceedings in Austria, notified a (positive) draft decision on the certification to the EC. In its subsequent opinion, the EC confirmed the restructuring requirements of TAG, but also doubted whether the GWG is in conformity with the Gas Directive with regard to provisions on the independence of management board and supervisory board members.

On 18 July 2014, E-Control delivered an affirmative decision certificating TAG as TSO on the resolutive condition that TAG undertakes comprehensive restructuring. TAG’s restructuring plan inter alia provides for the transfer of the legal ownership of the ‘Trans Alpine Gasleitung’ gas pipeline from the minority shareholder Gas Connect Austria (GCA) to TAG. The plan further includes the transfer of personnel in order to enable TAG to execute the core tasks of a gas TSO. Against this background, an increase of GCA’s equity interest in TAG is likely to be executed in the near future…

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