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EU energy chief welcomes alternative utility plan
BRUSSELS, Jan 31 (Reuters) - The European Commission's energy chief
welcomed on Thursday an alternative proposal from eight EU countries, led
by Germany and France, to its radical plan for breaking up Europe's big
gas and electricity companies.
"I saw it as a very positive sign because all 27 countries now are clearly
moving towards agreeing on an internal market in energy," EU Energy
Commissioner Andris Piebalgs told a Brussels conference of the French
Institute of International Relations.
The eight countries proposed a full functional separation of supply
activities from network operations with strong national regulation but
without splitting ownership of the utilities' infrastructure, as the
Commission had proposed.
Piebalgs stressed the European Union executive was not abandoning its
proposal for full "ownership unbundling" but said it was important that
France and Germany were seeking a solution and not just rejecting the
Commission plan.
Control of gas pipelines and electricity grids was crucial to increasing
competition and encouraging new suppliers to enter the European energy
market, he said, citing the shortage of interconnections between Spain and
France as an example of the opposite.
"If the market is very much controlled by one company, then you never have
competition and new supplies coming in," he said. "It's very clear that
network companies are crucial."
The commissioner said he had not had time to study the alternative
proposal in detail but he welcomed the political will for compromise that
Paris and Berlin were showing.
In a letter to Piebalgs on Wednesday, ministers from Germany, France,
Austria, Bulgaria, Greece, Luxembourg, Latvia and Slovakia challenged the
legality, proportionality and efficiency of Brussels' plan.
"Neither the impact assessment, nor the policy debate of the last months
have been able to dissipate these serious concerns already expressed...,
and therefore we remain firmly opposed to this measure," they wrote.
The Commission suspects utilities such as Germany's E.ON and RWE and
France's EDF and Gaz de France of using their dominant position to limit
supplies, keep up prices and shut out new suppliers.
In parallel with the unbundling proposal, the EU executive's competition
department is considering using antitrust law to force open the energy
market after raiding utilities in France, Germany, Belgium and Italy in
2006. (Reporting by Paul Taylor, editing by Anthony Barker)
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