S.L. 545.12 Art. 25New infrastructure.

(1) The Regulator may upon request and on a case-by-case basis decide to exempt major new gas infrastructure, such as interconnectors, LNG and storage facilities, for a defined period of time, from the provisions of regulations 22 and 23 and regulation 29(4), (6) and (8) under the following conditions:

(a) the investment must enhance competition in gas supply and enhance security of supply;

(b) the level of risk attached to the investment must be such that the investment would not take place unless an exemption was granted;

(c) the infrastructure must be owned by a person which is separate at least in terms of its legal form from the system operators in whose systems that infrastructure will be built;

(d) charges must be levied on users of that infrastructure; and

(e) the exemption must not be detrimental to competition or the effective functioning of the internal market in natural gas, or the efficient functioning of the regulated system to which the infrastructure is connected.

(2) Sub-regulation (1) shall also apply to significant increases of capacity in existing infrastructure and to modifications of such infrastructure which enable the development of new sources of gas supply.

(3) The exemption granted by the Regulator in terms of sub-regulation (1) may cover all or part of the capacity of the new infrastructure, or of the existing infrastructure with significantly increased capacity. In deciding to grant an exemption, consideration shall be given by the Regulator, on a case-by-case basis, to the need to impose conditions regarding the duration of the exemption and non-discriminatory access to the infrastructure. When deciding on those conditions, account shall, in particular, be taken of the additional capacity to be built or the modification of existing capacity, the time horizon of the project and national circumstances.

(4) Before granting an exemption, the Regulator shall decide upon the rules and mechanisms for management and allocation of capacity. The rules shall require that all potential users of the infrastructure are invited to indicate their interest in contracting capacity before capacity allocation in the new infrastructure, including for own use, takes place. The Regulator shall require congestion management rules to include the obligation to offer unused capacity on the market, and shall require users of the infrastructure to be entitled to trade their contracted capacities on the secondary market. In its assessment of the criteria referred to in sub-regulation (1)(a), (b) and (e), the Regulator shall take into account the results of that capacity allocation procedure. The exemption decision, including any conditions referred to in this sub-regulation, shall be duly reasoned and published.

(5) Notwithstanding sub-regulation (1), the Regulator shall submit to the Minister for the purposes of a formal decision, its opinion on the request for an exemption, which opinion shall be published together with the decision.

(6) The Regulator shall transmit to the Commission, without delay, a copy of every request for exemption as of its receipt. The decision shall be notified, without delay, by the Regulator to the Commission, together with all the relevant information with respect to the decision. The information may be submitted to the Commission in aggregate form, enabling the Commission to reach a well-founded decision. In particular, the information shall contain:

(a) the detailed reasons on the basis of which the Regulator has granted or refused the exemption together with a reference to sub-regulation (1) including the relevant point or points of that sub-regulation on which such decision is based, including the financial information justifying the need for the exemption;

(b) the analysis undertaken of the effect on competition and the effective functioning of the internal market in natural gas resulting from the grant of the exemption;

(c) the reasons for the time period and the share of the total capacity of the gas infrastructure in question for which the exemption is granted;

(d) in case the exemption relates to an interconnector, the result of the consultation with the regulatory authorities concerned; and

(e) the contribution of the infrastructure to the diversification of gas supply.

(7) The Regulator shall comply with a decision of the Commission to amend or withdraw the exemption decision within a period of one month and the Minister shall inform the Commission accordingly.