ACM’s response to Council for Public Administration’s recommendations regarding democratic checks on access rules and tariffs of system operators

At the request of the Dutch House of Representatives, the Council for Public Administration (In Dutch: Raad voor het Openbaar Bestuur, or ROB) conducted a study into the democratic checks on the decision-making process with regard to system operator tariffs and grid access rules. This study was prompted by the problems surrounding grid congestion and the prioritization framework used by the Netherlands Authority for Consumers and Markets (ACM) for determining who receives priority in getting connected to the congested grid. The ROB comes to the conclusion that, as an independent regulator, ACM has the exclusive authority to set the rules regarding grid access, prioritization, and grid tariffs. The influence and democratic checks exercised by the Dutch House of Representatives, the cabinet, and other government organizations should primarily take place beforehand: when choices are made regarding the energy system, energy planning, and spatial planning.

Manon Leijten, Member of the Board of ACM, adds: “It’s good that, in its study, the ROB underscores that ACM’s independent oversight, democratic checks, and political choices by the Dutch legislature can co-exist side by side. Independent oversight also entails accountability to the Dutch House of Representatives, as well as taking recommendations from the minister or the Dutch House of Representatives expressly into consideration in decision-making processes. ACM supports the ROB’s recommendations, including the recommendation to consider enshrining ACM’s position in law more firmly by converting ACM into a full-fledged autonomous administrative authority under Dutch law. This has already previously been the recommendation of two independent specialists, who had conducted a study into this by order of the ministry and ACM.”

Grid congestion is a major societal problem. Businesses, homes, schools, and emergency services such as police stations and GP clinics need to wait for new or upgraded grid connections. In order to ensure that such projects can go on as much as possible, ACM has drawn up rules with which system operators can give priority to sectors and activities that contribute to major social objectives (such as residential construction, hospitals, schools, and national defense). In addition to grid access rules, ACM also sets the tariffs that grid users must pay. ACM does so on the basis of the actual costs that system operators must incur. In order to upgrade the grids and to deal with the problem of grid congestion, system operators need to invest approximately 235 billion euros in the grid over the next 15 years. This investment task is largely determined by political choices for the current and future energy system.

Recommendations

The ROB advises the Dutch House of Representatives to respect ACM’s independent role, and to take advantage of the options it has to have ACM give account to parliament. It can do so, for example, by having ACM explain the implications of its choices regarding grid capacity allocation, and by informing the Dutch House of Representatives in a timely manner about draft decisions that can have a significant impact on society. That will allow the Dutch House of Representatives to ask ACM questions about them, for example, in standing-committee hearings. In addition, the ROB makes a case for granting the responsible minister the official power to give recommendations or submit an opinion with regard to important decisions taken by ACM. Finally, the ROB advises the Dutch House of Representatives to take into consideration previous recommendations issued by the De Leeuw and Borstlap Commission. In its recommendations, this Commission suggests considering enshrining ACM’s position in law more firmly. This can be achieved by, among other actions, granting ACM the status of a full-fledged autonomous administrative authority (in Dutch: zelfstandig bestuursorgaan, or ZBO) with its own organization and budget, and by creating a clearer relationship between ACM and the responsible minister.