Enforcing single EU energy market is a priority-draft

Sat Sep 15, 2012 7:22am EDT

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By Barbara Lewis

BRUSSELS, Sept 15 (Reuters) - The EU's executive "as a matter of priority" is enforcing its single energy market laws it says in a draft text, seen by Reuters, that states its determination to create a barrier-free market-place, which has angered dominant gas supplier Russia.

Early this month, the European Commission announced it had opened an investigation into suspected anti-competitive market practices by Russia's Gazprom.

Speaking on Friday in Lithuania, which totally depends on Russia for its gas, Energy Commissioner Guenther Oettinger said Russia had to abide by the EU's internal market rules and stop offering widely varying prices.

Within the 27-member bloc, the Commission aims to complete by 2014 a single energy market to encourage the equitable flow of power and gas across borders, which it says will stimulate fair competition and could save consumers billions.

In a draft communication on "making the internal energy market work," the Commission states the EU is not on track to meet that 2014 deadline.

But it says the "building blocks are there", referring in particular to the Third Energy Package, one of whose main requirements is that companies, such as Gazprom, that control energy supplies should not dominate the distribution networks as well when operating in the EU.

"Delays in implementation are not acceptable," the text states. "The Commission is pursuing, as a matter of priority, infringement procedures against those member states that have not transposed the third energy package directives yet or have failed to do so correctly."

A MORE COMPETITIVE, GREENER EUROPE

The Commission argues the single energy market is not an end in itself, but a means to create a more reliable, better value EU energy system and accelerate progress towards decarbonisation.

"Not only do member states need to implement all legislation fully, they also need to move away from and resist the call for inward-looking or nationally-inspired policy making which prevents the internal market from working effectively," it said.

In general, it says, energy markets are not seen to be sufficiently transparent and open and are in danger of being driven by subsidies rather than market considerations.

More open markets can have huge benefits for consumers facing economic difficulties, it says, citing estimates they could save up to 13 billion euros ($17.09 billion) per year across the bloc if they switched to the cheapest available electricity tariff.

Switching rates are already high in Britain, the Czech Republic and Sweden, it said.

Apart from taking action against member states, which could lead to cases at the European Court of Justice and heavy fines, the Commission is proposing an action plan.

Measures suggested include phasing out regulated prices, analysing use of subsidies and acting to protect vulnerable customers.

The Commission routinely declines comment on unpublished drafts. ($1 = 0.7606 euros) (Editing by William Hardy)

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