May 18, 2008
A compromise deal on how to force more competition onto EU gas and electricity markets is taking shape in Brussels after the European Commission presented a modified text aimed at soothing French and German opposition to “ownership unbundling”.The draft proposal obtained by EurActiv, was unveiled by EU presidency holder
Slovenia at a meeting of diplomats (COREPER) on 14 May.
Although unofficial, EU sources said the revised text would go a long way towards accommodating France and Germany, which have threatened to derail the Commission’s initial proposal by forming a blocking minority with six other member states in the Council.”Not everybody is happy with every suggestion of course,” commented an official at the EU Council of Ministers who attended the meeting. But she added that “in general, each delegation said they were ready to work on this basis”. The objective, the official said, is now to agree on a “general approach” at the next meeting of EU energy ministers on 6 June which would be formalised at a later stage. “The intention is to find a compromise.””No delegation has contested the objective to find an agreement at the Energy Council in June,” confirmed a senior diplomat.
An ‘independent’ Transmission System Operator (TSO)…
The revised text would allow former state monopolies such as EDF or GDF in France and E.ON or RWE in Germany to retain ownership of their gas and electricity grids.
However, they would have to leave their management to an independent Transmission System Operator (TSO) with “effective decision-making rights” over day-to day activities such as network operation and maintenance.
…under close supervision
But in a key concession to France and Germany, the TSO itself would now be subject to close scrutiny by a Supervisory Body “in charge of taking decisions which may have a significant impact on the value of the assets” of the mother company. Such decisions, the text adds, include in particular “the approval of the annual financial plan, the level of indebtedness of the transmission system operator and the amount of dividends distributed to shareholders.”Crucially, the Supervisory Body would be composed of members appointed in part by the vertically-integrated firm which owns the network. Other members would be appointed by “third party stakeholders” and employee representatives of the TSO but the proportions of each are unspecified at this stage and still up for discussion.
Under a previous compromise text circulated by the Commisison in late April, members of the Supervisory Body would have been nominated chiefly by an independent Trustee with no prior involvement in the mother company for at least five years prior to his appointment. But this paragraph has now been scrapped, to the satisfaction of France and
Indeed, such drastic supervision would have restrained companies’ decision-making capacities to such an extent that it would have risked hitting their stock market valuation, according to one diplomat.
From EurActivAuthor : EMI