Kroes: expect more energy probes

Neelie Kroes, the European commissioner for competition, has warned that she could launch further antitrust investigations into energy companies for anti-competitive behaviour.

Speaking at the Energy Council in Luxembourg yesterday (6 June), Kroes said that after the Commission had opened a formal investigation into two energy companies following dawn raids last summer it was "very unlikely" that they would be the only cases.

In May, the Commission started investigations into Germany’s RWE and Italy’s ENI group to examine whether they had tried to shut competitors out of the gas supply market. The probes followed dawn raids last year at the offices of energy firms including Germany’s E.ON Ruhrgas and France’s Gaz de France as well as Belgian, Austrian and Hungarian companies.

In her speech, Kroes repeated the Commission’s conviction that the best way to create a truly competitive energy market was through ownership unbundling where energy companies cannot own both supply capacity and transmission networks. She said that the Commission’s objectives for the energy market, as endorsed by EU leaders at the summit in March, were fair access to the network, access for new entrants, independence of investment decisions and co-ordination between operators. "Full separation of network ownership is the best way to deliver these," she told ministers.

The Commission is expected to make a renewed push for ownership unbundling when it presents legislative proposals for the energy market in September. But France and Germany are opposed to ownership unbundling. Alain Juppé, France’s new minister for ecology and sustainable development, said at the meeting: "Separation of ownership of network management activities and production activities or of commercial activities should be considered as one way [to approach improving competitiveness on the energy market]." He stressed the need for member states to decide themselves what was the best approach.

Germany argues that forcing energy companies to sell off their transmission assets would break constitutional rules against forced expropriation of property.

German Economics Minister Michael Glos said: "Unbundling is only one of a number of measures for accelerating the dynamics of competition. It is not a cure-all."

Kroes also warned that she would be taking a hard look at regional groupings of transmission systems operators (TSOs) to ensure they did not break EU competition rules. "Greater co-operation between system operators could well lead to significant problems under competition law," she said. She insisted that there had to be ownership unbundling to overcome the risks of anticompetitive behaviour.

"If TSOs remain integrated with supply business, there is an obvious risk that such co-ordination will lead to conditions which favour collusion," she said.

Her warning came as energy ministers from Germany, France, Belgium, Luxembourg and the Netherlands signed a memorandum of understanding setting up a regional TSO. Kroes and Energy Commissioner Andris Piebalgs welcomed the regional TSO although Kroes said that "truly independent systems operators" would have been able to reach an agreement sooner.

Luxembourg Green MEP Claude Turmes backed Kroes’s emphasis on ownership unbundling saying it was "the only way" to get a competitive market. "We shouldn’t allow the big German and French companies to squeeze the market by organising regional cartels like the one that’s been set up today," he said.

Neelie Kroes, the European commissioner for competition, has warned that she could launch further antitrust investigations into energy companies for anti-competitive behaviour.