Re-organising the regulatory state: from network to agency governance in EU energy regulation

What are the implications of shifts in EU regulatory governance for regulatory decision-making? Studies of EU regulatory governance have examined shifts from European regulatory networks to European agencies, including the conditions under which a network is (not) replaced by an agency, or why EU legislators delegate to a network or an agency. However, the implications of such shifts has received less attention. While the formal setup of networks has been compared to that of agencies, we know less about the implications of replacing a European network of national regulators with an EU agency in terms of regulatory decision-making and policy output. In 2009, a European regulatory network was replaced by a EU energy agency. Energy was a latecomer to EU integration dynamics, and several observers have highlighted the lack of agreement across member states in how to harmonize existing regulatory and technical practices for managing electricity systems. During the years 2015-2017, the European Commission adopted regulations requiring detailed European methodologies for electricity markets and system operation to be jointly adopted by all the national energy regulators in the EU. Should the national regulators fail to agree within a pre-defined time limit, decision-making would move to the EU’s energy agency ACER. This paper examines the outcome of decision-making made in a network setting by all regulatory authorities across Europe (network setting) with ACER-adopted decisions (agency setting). First, when does decision-making in a network setting fail, triggering escalation to ACER? Second, do decisions adopted in a network setting to a greater extent accommodate heterogeneity across member states by permitting differentiated practices, while decisions adopted by a EU agency entail more uniform, centralised rules? By examining the process and output of regulatory decision-making in network and agency settings, the paper adds to the literature on the implications of regulatory reforms in the EU.