Brussels take action against 25 EU member states, including Hungary over energy reform

PORTFOLIO.hu

Thursday, June 25, 2009 02:36:00 PM

The European Commission has taken firm action today against 25 Member States who prevent European consumers benefiting from the advantages of a competitive and open Energy Market by not complying with EU legislation.

Austria, Belgium, Bulgaria, the Czech Republic, Denmark, Germany, Estonia, Spain, Finland, France, Greece, Hungary, Ireland, Italy, Lithuania, Latvia, Luxembourg, The Netherlands, Poland, Portugal, Romania, Slovenia, Slovakia, Sweden and the United Kingdom will be receiving letters of formal notice for not complying with applicable gas and electricity regulations.

Only Malta and Cyprus avoided action.

The Commission has also sent letters of formal notice to Greece, Poland, Portugal, Romania and Lithuania for maintaining a system of regulated prices in violation of the EU directives on electricity and gas.

"In this time of economic and financial crisis, it is simply unacceptable that the European consumers and companies suffer the burden of an ill-functioning energy market. The Commission is determined to take all necessary action to ensure that European consumers can benefit from real choice, better prices, and enhanced security of supply that only an open and competitive market can provide," stressed Energy Commissioner Andris Piebalgs.

The Commission has focused in particular on provisions which guarantee fair competition in the interest of consumers.

In this context, key violations identified by the EU executive concern:

• the lack of information provided by electricity and gas transmission system operators, obstructing effective access of supply companies to networks;
• the inadequacy of network capacity allocation systems to optimise network use for electricity and gas transmission in Member states;
• the lack of coordination and cooperation across borders by electricity transmission system operators and national authorities, which is necessary in order to better allocate network capacity on cross-border interconnections so that use of the existing electricity grid is optimised on a regional and European basis instead of on a national basis;
• the inadequate efforts by gas transmission system operators to make maximum capacity available in order to optimise opportunities for market entrance and competition. This concerns in particular short-term capacity that is otherwise left unused, and capacity in the other direction than in which the gas physically flows (backhaul capacity);
• the lack of effective enforcement action by the competent authorities in Member States in case of violations of the EU regulations, including the absence of effective systems of penalties at national level;
• the persistence of regulated prices, especially for the benefit of large customers, putting obstacles in the way of new market entrants;
• the absence of adequate dispute settlement procedures for consumers at national level; it is a fundamental premise of the Electricity and Gas Directives that all citizens who enjoy the benefits of the internal market should also be able to enjoy high levels of consumer protection. However, a lack of transparent, simple and inexpensive procedures for dealing with their complaints can lead to consumers' reluctance to participate in the internal market.

“In the Commission's view, the sustainable, competitive and secure supply of energy will not be possible without open, competitive energy markets that enable European companies to compete Europe-wide. The creation of an integrated European energy market will be a key factor in improving the security of supply and in boosting competitiveness in the EU. This is directly serving the interests of European consumers"