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The European Parliament has this week backed the complete separation of electricity production and distribution across the EU. In adopting full ownership 'unbundling' as the only option for electricity companies, MEPs have challenged an agreement reached earlier this month by the Council of Ministers to allow for alternative models. Negotiations are now likely to continue between the two EU institutions.
A series of votes on Wednesday and Thursday has also led to proposals for:
Intense negotiations will now follow between the European Parliament and the Council of Ministers. This is the codecision procedure where Parliament and Council have equal powers to decide the final text of any new legislation. If the Council endorses its informal agreement reached on 6 June, the proposals will return for a 2nd reading in the European Parliament. If the Council agrees to all the amendments passed this week, the whole package can come into effect without further readings in Parliament; if agreement between the two institutions can be reached on a compromise position, this would have to return for endorsement in Parliament.
For further details, see: http://www.europarl.europa.eu/news/expert/documents_presse_par_theme_page/909/default_en.htm
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Excerpts from Tuesday's debate (17 June 2008) in Strasbourg
Eluned Morgan MEP (Labour, Wales): I hope that if Parliament adopts the electricity report tomorrow, it will be an indication to energy companies all over Europe that we want the consumer back in the driving seat… All over the European Union there are people struggling to pay their energy bills so we believe that the issue of ‘energy poverty’ should be placed firmly on the EU agenda… Member States should come up with their own definitions of energy poverty and an action plan for dealing with the problem. So, if the Council want a deal on this package, they need to understand that this is a central requirement of Parliament.
We have also listed additional rights which should be enjoyed by the consumer such as affordable prices for low income families, an easier way to switch suppliers, increased representation for the consumer.
Now to the most controversial part of the report – the issue of unbundling. The clear thing is that the current system has not worked. There is a suspicion that some are not playing fair. They are giving priority access to their own company; they put obstacles in place which could stifle competition. That is why I believe, as rapporteur, that total separation of energy supply from transmission companies or full ownership unbundling – as was suggested initially by the Commission – should be the only option for electricity companies.
So, who is resisting this? Germany, France, Austria, Luxembourg, Greece and Bulgaria…Some suspect also that there is an effort to protect national champions who are happy to invest in other markets but are reluctant to allow others into their markets.
Giles Chichester MEP (Conservative, South West): It is an interesting challenge to find the right balance between leaving the national regulatory authorities alone to do their own thing and to create an EU regulator… In the course of the debate on this regulation we have become more convinced of the need to go beyond the Commission’s proposals for the Agency to create an agency with more independence and more decision making powers. If the Agency is to contribute effectively to the development of an integrated competitive energy market for the European Union, the Agency will need more extensive powers and be independent of the Commission in order to handle cross border situations and deliver effective cooperation between the TSOs and the NRAs – the National Regulatory Authorities.
John Whittaker MEP (UKIP, North West): These reports bring the usual wish list of incompatible objectives…Well, cheap energy for some means that the rest of us pay for it. Perhaps we think we shall win friends by forcing governments to provide subsidised energy to those suffering from so called ‘energy poverty’. Is there no area of activity in which the EU will trust national governments to do what they think is best for their own peoples?
Alyn Smith MEP (SNP, Scotland): I focus particularly on one issue and one amendment. That is Amendment 161 to the Morgan report, pushing for better access to the grid for renewable operators. I hope that amendment will be successful when we vote on it tomorrow… By way of example, in the United Kingdom we have Ofgem, our national authority, which has a locational pricing mechanism for access to the UK grid that actually discriminates against renewable operators within Scotland, my country. I would like to see a greater degree of European coordination and action against the individual Member State operators where they are part of the problem.
Arlene McCarthy MEP (Labour, North West): I should like to give an example of where the Charter on the Rights of Energy Consumers can make a real difference. A small community organisation in Manchester asked for my help in resolving a complaint with its energy supplier. For five years the company was reading the meter but failing to send any bills. In March 2008, the group received an invoice for five years’ electricity use totalling £7,540.37, pushing them into debt. Ensuring consumers are aware of their rights – in this case the simple right to receive a regular bill – is fundamental to putting consumers in control of their energy consumption.
Jim Allister MEP (Ind., Northern Ireland): I strongly support unbundling between generation and transmission, but I would say that it needs to be thorough and I question whether it can sit comfortably with any state ownership in either sector. I say that in part from the experience of my own constituency, Northern Ireland, where we have recently entered a single electricity market on the island of Ireland.
Neena Gill MEP (Labour, West Midlands): Better regulation of electricity and gas markets is critical to ensuring fair competition and better prices for consumers and I am deeply concerned that soaring energy prices are putting Europeans increasingly at risk of energy poverty, especially the elderly, who are the most vulnerable.
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Debate in the European Parliament of 17June 2008 in the speakers' original language:
http://www.europarl.europa.eu/sides/getDoc.do?pubRef=-//EP//TEXT+CRE+20080617+ITEM-011+DOC+XML+V0//EN&language=EN
Text adopted by the European Parliament (18 June 2008) will be available at:
http://www.europarl.europa.eu/activities/plenary/ta.do?language=EN#
Summary of procedure in the Legislative Observatory
UK MEPs contact details:
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