Policy Paper
Reference: C07-GA-34-08

CEER Response to a Regional Independent Operator (RIO) proposal by EURELECTRIC

This CEER Response to a Regional Independent Operator (RIO) proposal by EURELECTRIC gives general views due to the fact that the proposed RIO model is not yet defined sufficiently (a point recognised by EURELECTRIC) to properly evaluate it against other models for regional co-operation and organisational structures. The CEER position paper contains a number of key messages:

- RIO is not a pre-condition for market integration
The RIO model (a model of joint regional ISOs) is just one of a number of alternative approaches to enhance co-operation by TSOs.  Regional co-operation by TSOs is practiced in various forms already today, enhanced in no small way by the ERGEG Regional Initiatives which are demonstrating results.

- European Commission’s (3rd package) proposals will in any case enhance regional co-operation
The European Commission’s 3rd liberalisation proposals (19 September 2007) contain a number of regional provisions on TSOs, regulators and Member States.  It should set up a framework that will allow for further regional co-operation by first obliging Member States and national regulators to have an objective and duty to create a single energy market and secondly through the EU Agency which shall monitor the new regional co-operation obligations of TSOs.

- RIO is not an alternative for effective unbundling
Improving market integration does not remove the need to resolve the EU’s deep seated problem of undue discrimination on the part of vertically-integrated companies. A strong precondition for RIO’s acceptability is effective unbundling. Therefore CEER strongly endorses the European Commission’s position (19th September proposal) that effective unbundling (i.e. either ownership unbundling or an ISO model) is a critical precondition that needs to be fulfilled in case a joint (regional) ISO is established.