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EU still plans to make power networks independent

European Union regulators said they still favor plans to break up energy into separately owned suppliers and distributors, contradicting a report yesterday in German newspaper Frankfurter Allgemeine Zeitung.

The European Commission wants to open competition to new entrants by forcing energy companies to separate their transmission and production businesses, a process known as ownership unbundling. Another option offered by the commission is to let suppliers retain ownership of distributors provided they entrust management decisions to an independent company. „The commission continues to prefer ownership unbundling above other options, but fully independent transmission system operators would work as well,” Ferran Tarradellas, an EU spokesman, said by telephone. „We don't want unbundling for the sake of unbundling. What we really want is to allow newcomers to have access to the market.”

Some EU countries, led by France, where state-controlled Electricite de France owns the Reseau de Transport d'Electricite, the operator of Europe's biggest power network, oppose the proposal by the commission, the EU's regulatory arm. France says its power arrangements provide both cheap prices and access to competitors, such as Spain's Endesa SA. Frankfurter Allgemeine Zeitung, citing an internal EU document, reported yesterday that the commission plans to give up on ownership unbundling, pushing instead for power networks to be controlled, not owned, by regional bodies that each cover a region of Europe.


On January 10, the commission published a package of energy proposals in which it said formal independence for supply networks could be considered as an alternative to unbundling. „This kind of solution will require a lot of legislation,” Tarradellas said. „It's far more complicated” than simple ownership unbundling, though it would still break down barriers to competitors wishing to pump power onto a network, he said. European leaders will discuss the commission proposal at a Brussels summit on March 9.

Commission President Jose Barroso said he remains committed to full unbundling. „The commission believes that full ownership unbundling is an important part of the energy policy mix,” he said in speech yesterday. „Not all member states agree, but they do recognize that we need stronger control against conflicts of interest. „There will be no doubts about our determination to go on with the continuation of the competition rules regarding the energy market.” (Bloomberg)