Teréga successfully navigates European Commission's first State aid investigation of regulatory mechanism for storage of natural gas

Client(s) Teréga SA

Jones Day advised French gas storage operator Teréga SA in successfully navigating the European Commission's in-depth investigation into whether the French regulation mechanism for natural gas storage complied with EU State aid rules. Teréga, together with Storengy and Géométhane, is a beneficiary of those State aid measures. Gas storage operators in France received compensation from the French government totaling €540 million in 2019.

Margrethe Vestager, the EU Executive Vice-President and Competition Commissioner, announced that, "Following an in-depth investigation, the Commission concluded that the regulatory mechanism for the storage of natural gas in France complied with EU rules on State aid. In particular, the measure is necessary and proportionate to ensure the security of energy supply to its citizens and businesses, while also guaranteeing that any possible distortions of competition are minimized.” This was the Commission's first investigation of a regulatory mechanism for gas storage under EU State aid rules. The mechanism involves auctioning all storage capacity in France and covering the storage operators' costs. This case will provide guidance on the scope of energy regulators' discretion when new energy regulatory mechanisms are introduced.

Teréga is the second largest gas storage operator in France, with annual revenues of €500 million.