EU takes step towards shake-up of energy regulation

25th March 2009, Comments 0 comments

Eager to boost competition, the EU is seeking ways to boost competition in the energy sector without breaking up companies entirely.

Brussels -- The European Union has taken a small step toward shaking up regulation of the energy sector with a compromise deal that would spare gas and power companies from hiving off their distribution networks.

The European Parliament said lawmakers from its industry committee reached the agreement late Monday with the EU's Czech presidency, paving the way for a vote by the entire assembly either in April or early May.

Eager to boost competition, the European Commission originally proposed in 2007 to split up energy groups in hopes of ending conflicts of interest it feared were keeping prices high and discouraging investment.

After the proposals sparked uproar from some of Europe's biggest energy companies, governments led by France and Germany sought an alternative way to improve competition without breaking companies up entirely.

Under the compromise between lawmakers and the Czech presidency, EU governments would have the option of banning gas and electricity companies from owning their distribution networks if they wanted.

If they did not want to, governments would have two other options.

Member states could either require energy companies to hand over the operation of their networks or the companies would have to abide by rules to ensure that the network operates independently of the production business.

Eleven EU countries already ban gas companies from owning distribution networks while seven have the same rule for electricity groups.

Many of those countries wanted full ownership unbundling of distribution networks as the only option.

The compromise agreement also calls for new measures to protect consumers' rights.


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