March 21, 2008
Reason One: the variety of national regulation is an obstacle to the functioning of the internal market. For a new entrant into a national energy market, national regulation is a barrier. Norms, interpretative documents, jurisprudence, procedures must be known and understood. No wonder that companies prefer to buy a local company rather than establishing a local branch or even offering cross-border contracts to individual customers, as one expects it should happen in a single market.
On the contrary, an easily accessible set of rules would make new entry much easier and cheaper. No dramatic decision would be necessary by an energy company in one country in order to start looking for customers in another, or to accompany an existing customer expanding into another country.
Reason Two: national regulation is systematically exposed to a localistic bias as a result of pressure by government and by local stakeholders. Good regulators bravely resist such pressures, but the same people would produce better regulation more easily if they could act from a distance.
From EU Energy Policy BlogAuthor : EMI