EU Gas-Hydrogen Package: On the Party Status in the Procedure for the Decommissioning of Natural Gas Distribution Networks under the Internal Gas Market Directive

The approved NDP is a prerequisite for refusing connection to new network customers or terminating existing customers. The directive defines conditions for the disconnection of gas network connections, such as the consultation of consumer associations or the implementation of protective measures for customers affected by energy poverty and those in need of protection. The IGMD also requires member states to establish appropriate legal protection mechanisms at the national level for a party affected by a decision of the regulatory authority.

Who should have party status in the future NDP approval procedure depends on whether the decision on the NDP is issued as a notice or regulation, with it having characteristics of both a regulation and a notice. It will primarily concern the respective gas distribution network, but also (indirectly) the customers connected to the gas network, whose contracts may be terminated as a result of the approval, and potential new customers who will not receive network access or connection. Therefore, the approval of the NDP could be considered an infringement of the subjective rights of network customers. The fact that legal protection against a regulation is significantly weaker than against a notice argues for regulating the decision on the NDP as a notice procedure, as the Constitutional Court links the choice of legal form with questions of legal protection in its case law. There are also reasons under EU law: Based on the principle of effectiveness of EU law, the European Court of Justice ("ECJ") attributes a wide third-party protective character to infrastructure regulation provisions, so that in addition to the infrastructure operator as the direct addressee of the measure, the infrastructure users are also considered affected (ECJ C‑489/15, CTL Logistics GmbH/DB Netz AG, ECLI:EU:C:2017:834, para. 94). The status as a potential user is sufficient for the status as an affected party. Since the extensive scope of subjective rights is derived from EU law, it only applies to provisions based on EU law. Under EU law, the status as an affected party entails the right to an effective complaint. This means that potential users must be able to effectively challenge an infrastructure regulation measure.

Summary:

• The IGMD guarantees comprehensive end-customer rights and consumer protection. In particular, affected parties must have the right to effectively challenge the decision on an NDP.
   
• Although the IGMD does not directly regulate the termination of network customers, in light of the directive's purpose, which ultimately envisages the decommissioning of existing natural gas distribution networks, it can be considered an infringement of the subjective rights of network customers.
   
• From a constitutional perspective, it should be noted that the decision on an NDP will significantly interfere with fundamental rights, such as property rights, because this decision will impact existing contractual relationships.

A notice procedure with party status for network customers could remedy a potential violation of the rule of law principle by the approval decision in the form of a regulation. Constitutional and EU law considerations argue for the party status of end customers alongside the affected gas DSO.

authors: Marta Katarzyna Krzystek, Moritz Üblagger