Parliament establishes its own opinion on the market for electricity 

By Lars Hansen, 24. June 2008

With wednesday’s vote in the European Parliament, the politicians have made it clear once again that they have their own voice and vision for the future of the European energy markets.

The Parliament’s proposal for a third energy package differs markedly in a number of areas from what the EU Commission has proposed:
The high-voltage grid will be separated completely from production and trading, in order to ensure the fair treatment of all parties – and be divested where it is an asset of integrated companies. Sus-tainable energy and combined heat and power would take precedence in connecting to the grid.

The EU Parliamentarians are also placing an emphasis on an actual European regulator being cre-ated, with decision-making authority, not just the advisory authority that had been proposed by the Energy Ministers and the Commission. One primary task would be to secure the integration of the still-fragmented market for electricity and natural gas.

Finally, consumer protection is very much on the mind of the Parliament. They are proposing that a number of extra clauses be inserted so as to protect vulnerable customers such as pensioners and the handicapped. Among other things, consumers shall:

  • be able to exit their electricity trading contract at any time at no charge. The change of supplier must be able to occur within 2 weeks
  • have compensation for a lack of service – for example incorrect billings
  • have access to remotely readable meters within a 10-year period from entry into force of the Directive
  • be able to purchase power from electricity dealers across the entire EU
  • be informed of their actual consumption at least once per quarter
  • be protected against market abuse. This means that price ceilings shall be able to be in-troduced for a period in markets that are not particularly subject to substantial competi-tion, until the problem has been solved
  • have an independent energy ombudsman

 

The high price of oil is contributing to bringing the concept of energy poverty back onto the agenda in the EU. This adds an extra dimension to the complex of problems involved, which will also be of significance to the Danish energy companies, even though we in Denmark solve social problems via social policies and are not subject to the problem to such a high extent as other countries.  In exten-sion of this, the Parliament is proposing that national authorities must ensure that low-income fami-lies receive lower energy bills, that power must not be cut off during the winter and that the energy fee paid must rise with increasing energy consumption.

Because the Parliament must adopt the third energy package on equal terms with the Energy Minis-ters, substantial negotiations are now looming after the summer holidays in order to attain a joint proposal.

Facts

Fakta

The Parliament’s proposal is a good point of departure for an ambitious compromise and for the result to ultimately be a more effective separation of the high-voltage grid than what the Energy Ministers are intend-ing. There will also be a beneficial Regulator-Agency with decision-making authority, provided they only work with the most essential market issues and are not given free reign for extra details and bureaucracy.

For us, it is also crucial that the understandable desire to protect consumers be realised in a manner such that it does not distort the market and that the execution of social policies not be imposed upon the companies. This ought to be solved instead by the social authorities. We must ensure that the price of electricity is ”cor-rect” and not unnecessarily high.