EU parliament approves energy compromise

The European Union's Parliament, by a large majority, approved the energy market liberalization compromise reached by the Energy Council last October.

Apr 28th, 2009

Doris Leblond
OGJ Correspondent

PARIS, Apr. 28 -- The European Union's Parliament, approved by a large majority the energy market liberalization compromise reached in October 2008 by the Energy Council.

Parliament earlier rejected the compromise in its first reading and insisted that integrated companies fully unbundle production and sale of natural gas and electricity, while the council battled for the choice among three options for separating supply and production activities from network operators.

Brokered by the current Czech presidency of the EU, full acceptance by the Council of Ministers and parliament was reached on the third legislative package on energy aimed at bolstering the internal gas and electricity markets. But the parliamentary vote has strengthened the role of both national and transmission system regulators and put citizens at the center of the market through a protective energy consumer checklist and special attention to vulnerable clients.

Both Commission Pres. Jose Manuel Barroso and Energy Commissioner Andris Piebalgs welcomed the vote, which they said ensures more effective regulatory oversight "from truly independent and competent national energy regulators" and "facilitates crossborder collaboration and investment with a new European Network for Transmission System Operators."

They said grid operators will cooperate and develop common commercial and technical codes and security standards, as well as plan and coordinate the investments needed for the EU, easing crossborder trade and creating a level playing field.

"By bringing national markets together, member states will be better able to assist one another to face energy supply threats," they added. The main objective of the energy package is to put in place the regulatory framework to make the market fully effective and create a single EU gas and electricity market to achieve the lowest possible energy prices and better security.

The legislative package includes provisions to prevent control of transmission systems by companies from non-EU countries until they fulfill certain conditions. A national regulator could refuse certification of a transmission system operator controlled by "a person or persons from a third country" if the company does not comply with the unbundling requirements, and its market entry would jeopardize supply security for one or more EU members.

EU countries have 3½ years to implement these provisions.

The council is expected to formally endorse the legislative text within the next few months. The legislation seems sure to be implemented as specified in 2011.

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