Public Service Obligations

Public service obligations” is a term used in Article 106 of the TFEU that has given rise to many critical debates. In the energy sector it relates to the need of guaranteeing, through regulatory measures or requirements addressed to suppliers or transmission and distribution system operators, a minimum of standards in terms of consumer and environmental protection in the name of general economic interest which could not be reached through the simple operation of the market mechanism. In other words, they impose some restrictions to the freedom of trade justified by the fact that electricity and gas are essential goods, the supply of which must be continuous and non discriminatory. Prior to the liberalization of the energy market, electricity and gas supply was related to the public interest and was guaranteed by state-owned monopolies. Under the Competition Law regime, public services are delivered in accordance with the obligations imposed by article 3 of the electricity and gas directives. More specifically, in the light of the above-mentioned article “such obligations shall be clearly defined, transparent, non-discriminatory, verifiable, and shall guarantee equality of access for EU electricity (gas) companies to national consumers”.

In an attempt to summarize the categories of public service obligations one could say that they concern:

  • security, including security of supply
  • connection to the network and regularity
  • quality and accessible prices 
  • environmental protection and energy efficiency


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