EU tackles 25 states over energy liberalisation

Jun 26, 2009 02:00 AM

The European Commission accused 25 of the block's 27 countries on 25 June of breaching rules to boost competition in energy markets, taking the first step towards possible court action. It launched so-called infringement procedures for failure to implement the EU's second package of internal energy market laws -- reforms phased in between 2004 and 2007 to open gas and electricity markets to more competition.
The 25 are Austria, Belgium, Bulgaria, the Czech Republic, Denmark, Germany, Estonia, Spain, Finland, France, Greece, Hungary, Ireland, Italy, Lithuania, Latvia, Luxembourg, the Netherlands, Poland, Portugal, Romania, Slovenia, Slovakia, Sweden and Britain. Only Malta and Cyprus avoided action.

"In this time of economic and financial crisis, it is simply unacceptable that European consumers and companies suffer the burden of an ill-functioning energy market," EU Energy Commissioner Andris Piebalgs said.
"The Commission is determined to take all necessary action to ensure that European consumers can benefit from real choice, better prices, and enhanced security of supply that only an open and competitive market can provide," he said.

The 25 will receive letters of formal notice for not complying with gas and electricity regulations, the European Commission said. Many of those states had received warnings on similar issues in 2006.
Key violations identified by the Commission include lack of information provided by electricity and gas transmission system operators that are obstructing access of supply companies to networks. The EU executive also singled out "the persistence of regulated prices, especially for the benefit of large customers," which it says are "putting obstacles in the way of new market entrants". Other violations include the absence of "simple and inexpensive" dispute settlement procedures for consumers at national level, which the Commission sees as "a fundamental premise" of the EU energy market.

Meanwhile, environment ministers meeting in Luxembourg formally approved the EU's third package of reforms, which aim to liberalise EU energy markets further still. EU member states approved the broad outlines of the third package last year in an attempt to remedy what the Commission called "serious malfunctions" on the energy market. The centrepiece was a proposal on "ownership unbundling" that forces supply companies to sell off their transmission assets.
France and Germany, which were opposed to the plans, won concessions. A compromise with Parliament was passed in March this year and then formally endorsed by Parliament in a subsequent vote.

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