Updated: Sept. 10, 2012 (Initial publication: June 28, 2012)

Sectorial Analysis

On June 28, 2012, the " Commssion de Régulation de l’énergie - CRE" (French energy regulator) has published its report on the application of the Code of conduct which governs the management of transport and distribution of electricity and natural gas.



Context and Summary


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The "Commission de régulation de l’Energie - CRE" (French energy regulator) must, by law, make an annual report on the implementation that the manager of that transport networks (electricity and gas) must make their own code of conduct.

In the first place and on the same device, observed that the French system combines and self-regulation (code of conduct) and public regulation (control and public report), which corresponds to the points of contact in increasing numbers between regulation and compliance, omnipresent in the sectors banking and financial, but also observable in the energy sector. The reason is that network managers are, as the auditors on the financial markets, for example, crucial players.

Secondly, in a way surprising but probably adequate, the regulator does insist not so much on the way in which the operator meets or does not the provisions of the Code that prescribed behavior for the undertakings to which he has to face.

The law, by the article L.134-15 of the "Code de Energie" (French Code of Energy), because the whole system was designed to ensure the independence of the transmission and distribution compared to the incumbent monopoly once and verticalized provides a code of conduct that must not only ensure proper compliance with these managers but also their obligation to ensure their profit independence.

7 years having passed, the regulator has not put it in the first concern, or rather the concern that it continues to have the independence of the manager historical operators (in France, E.D.F. for electricity), passes by another concern: the fact that these managers are not known by consumers, especially not the managers of networks of distributions (ERDF for the France) while they are still very familiar with the historical producer (EDF). Therefore, independence, by "ricochet", is in fact if not in law, difficult, since the manager is not perceived by consumers as existing.

Comparing with the liberalization of telecommunications, it is the immediate consciousness of consumers of the existence of new entrants and architecture of the new system, which operates it. Thus, it is not so much the law which built the competition, and perhaps not even the desire to have the consumer, but the awareness of it he can have it. This is why the regulator conducted a survey by telephone to consumers. It appears that consumers make 40% as "unclear or incomplete" answers. It is true that the operators are themselves reprehensible and we return to the question of the "good conduct, do not spontaneously to clients that they have the choice between several suppliers and that there is little distinction of logo and name between the incumbent operator and distributors. 

Thus, the lack of awareness of the distributors of electricity and gas, highlighted by the regulator, while this might at first appear to the purpose of the report of compliance with codes of conduct, is in fact closely correlated, because in the absence of awareness among consumers of the existence of these economic agents, foreign with the purpose of the compliance report is independence even that risk of lack of effectiveness. But also to ensure their profit independence.




Brief commentary

Transport networks are, including in the energy sector, natural monopolies. Their managing is regulated. French system structured to public regulation exercised by the " Commission de régulation de l'énergie - CRE" (French energy regulator) regulation by "compliance" issue of a Code of conduct, regulation code designed by the managers themselves. But the two can not be separated and the link between compliance and control are formed more text here that charge regulator to monitor compliance that managers have of this text which explains their duties to the people for which they develop their business. The 7th report of the controller was released June 28, 2012.

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