CHAPTER VI

DISTRIBUTION SYSTEM OPERATION

Closed distribution systems
Article 28
1
Member States may provide for national regulatory authorities or other competent authorities to classify a system which distributes electricity within a geographically confined industrial, commercial or shared services site and does not, without prejudice to paragraph 4, supply household customers, as a closed distribution system if:
a
for specific technical or safety reasons, the operations or the production process of the users of that system are integrated; or
b
that system distributes electricity primarily to the owner or operator of the system or their related undertakings.
2
Member States may provide for national regulatory authorities to exempt the operator of a closed distribution system from:
a
the requirement under Article 25(5) to procure the energy it uses to cover energy losses and reserve capacity in its system according to transparent, non-discriminatory and market based procedures;
b
the requirement under Article 32(1) that tariffs, or the methodologies underlying their calculation, are approved prior to their entry into force in accordance with Article 37.
3
Where an exemption is granted under paragraph 2, the applicable tariffs, or the methodologies underlying their calculation, shall be reviewed and approved in accordance with Article 37 upon request by a user of the closed distribution system.
4
Incidental use by a small number of households with employment or similar associations with the owner of the distribution system and located within the area served by a closed distribution system shall not preclude an exemption under paragraph 2 being granted.