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EU energy market opens up

European customers were able to freely choose their electricity and gas supplier as the European Union (EU) energy market opened up across member states Sunday.

A piece of EU internal energy market legislation from 2003 sets July 1 as the final date for the full opening of the electricity and gas markets across the 27-nation bloc, with a few exceptions such as the Baltic States and other member states where gas was introduced only recently. Thirteen member states have managed to be ready for the liberalization ahead of the deadline and big consumers like companies have enjoyed the right to choose their suppliers since 2004.

Now households and other customers should have the same choice. “I encourage European consumers to take advantage of their freedom to choose their energy suppliers. A functioning EU energy market can only be obtained if consumers participate in the market actively,” Energy Commissioner Andris Piebalgs said. Since the same date, larger and medium-sized local electricity and gas distribution companies have to be organized as legally separate companies, the so-called legal unbundling.

The European Commission said this measure would enhance the independence of the distribution companies from their parent companies with the aim of ensuring fair access for all suppliers to the distribution network. At transmission level legal unbundling became compulsory in 2003. The European Commission has been pressing hard for liberalization of member states' energy markets to improve cross-border competition. It said the measure would bring down prices for customers and encourage investments in infrastructure, which helps avoid interruptions in power or gas supplies.

The EU's executive arm proposed in January that energy giants should be forced to sell or separate their distribution networks from generation businesses in a process known as “ownership unbundling,” which went beyond legal unbundling by denying energy giants the right to own grids. But the proposal failed to be endorsed by member states at an EU summit in March because some countries feared ownership unbundling would harm their energy companies. The EU leaders only agreed on the need for “effective separation of supply and production activities from network operations,” the so-called effective unbundling.

The European Commission was scheduled to launch a public consultation Thursday on the future European Charter on the Rights of Energy Consumers. The Charter aims to set out clearly basic consumer rights in electricity and gas supply, contracts, information, prices, dispute settlement and protection against unfair commercial practices. The consultation process will be linked to a major information campaign to raise awareness among consumers that they now have an active choice in the market, including the right to choose their electricity or gas suppliers, the Commission said. (