Germania : May 16, 2008
As the European Union’s energy liberalization moves forward, consumers may be wondering when and in what form the EU’s new energy policy will begin to transform the way energy is produced and consumed as well as if the change will mean lower prices for consumers or higher profits for the energy industry.
On May 6th, the EU Parliament’s Industry Committee voted in favor of breaking up large energy firms through ownership unbundling thus separating a company’s generation and distribution assets. The vote also offered the alternative of the suppliers transferring the management of their distribution operations to an Independent System Operator (“ISO”).
The vote was largely seen as a setback for France and Germany who had proposed a “third way” regarding energy liberalization that did not require ownership unbundling or a transfer of distribution operations to an ISO. This proposed “third way” would have introduced safeguards to ensure the independence of energy operators. The EU’s electricity market liberalization Committee did consider the “third way” proposal; however, it was rejected when Paris and Berlin would not accept certain strict conditions to their proposal regarding ownership. However, the committee’s vote has not settled the issue of the “third way” proposal as France and Germany, with the support of six other member states, have formed a blocking minority on the Council of European Municipalities and Regions. Neither side has shown any sign of backing down raising the specter of drawn-out negotiations ahead.
Ministers of the European Parliament also voted in favor of consumer protection measures designed to bring down energy prices. Under the plan, national authorities should “mandate electricity undertakings to introduce pricing formulas which increase for greater levels of consumption”. Currently, large energy consumers like industrial concerns can negotiate lower energy prices with power suppliers. However, under the plan, large consumers would instead pay higher prices in order to encourage energy efficiency improvements while consumers who use less energy, such as households, would pay lower prices.