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EU lawmakers take tough line on power unbundling

European Union lawmakers agreed a tough line on Wednesday on liberalizing power markets, putting them on a collision course with member states, which reached a compromise deal this month.

European Union energy chiefs agreed earlier in June to open their gas and power markets to more competition, but yielded to pressure from France and Germany for softer alternatives to splitting giant energy companies completely. The vote by the European Parliament on Wednesday “clearly endorsed a strong negotiating position with the governments of Europe”, Welsh EU lawmaker Eluned Morgan, who guided the legislation through the assembly in Strasbourg, told Reuters. “We are anxious to see consumers back in the driving seat on energy policy, particularly at a time of high prices,” she added. The EU’s executive European Commission proposed last year dividing ownership of gas and electricity supply from pipelines and grids in a drive to help new entrants and force down prices, and the parliament backed this stance.

Berlin and Paris had spearheaded opposition to any forced breakup of national energy champions and proposed a “third way” allowing vertically integrated utilities to keep ownership of transmission networks under strict supervision by a regulator. Their hand appeared to be weakened in recent negotiations when German utilities RWE and E.ON, the world’s largest, were forced to sell parts of their transmission networks to settle antitrust cases brought by the Commission. But Germany stuck to its guns and at the start of this month, energy ministers agreed a deal based on the “third way”.

The European Parliament, which has co-decision powers on energy liberalization, rejected any compromise on electricity, for which full ownership unbundling is less controversial than for gas. A compromise deal based on Franco-German proposals was rejected by 378 votes versus 267 in favor, with 22 abstentions. (Reuters)