No C 75/18 Official Journal of the European Communities 26. 3. 90 
Opinion on the draft Council Directive concerning a Community procedure to improve the 
transparency of gas and electricity prices charged to industrial end-users (*) 
(90/C 75/04) 
On 28 September 1989 the Council, acting in accordance with Article 198 of the EEC Treaty, 
asked the Economic and Social Committee for an Opinion on the abovementioned draft 
Directive. 
The Committee instructed its Section for Energy, Nuclear Questions and Research to 
prepare the Opinion. The Section adopted its Opinion on 30 November 1989 (rapporteur: 
Mr Proumens). 
The Committee unanimously adopted the Opinion set out below at its 273rd plenary session 
(meeting of 31 January 1990). 
The Committee endorses the proposal for a Directive, 
subject to certain recommendations to the Commission 
as to the implementing measures. 
1. Introduction 
1.1. In its May 1988 working document on the 
internal energy market [COM(89) 238 final] the Com­
mission identified the inadequacy, or even complete 
lack, of energy price transparency—particularly for 
industrial consumers of gas and electricity—as one of 
many obstacles to the development of trade in energy 
and a better-integrated energy market. 
1.2. The Commission considers that price trans­
parency is essential to the completion and functioning 
of the Internal Market as it reinforces balanced compe­
tition within the market. The Commission accordingly 
felt that priority action was needed in this area to permit 
further progress to be made, this being impossible with 
the existing legal instruments because of their inad­
equate statistical coverage and the fact that the com­
munication procedures are voluntary. 
1.3. The current proposal arises from that commit­
ment and follows consultation with experts represent­
ing industrial consumers and distributors. 
2. General comments 
2.1. The Committee endorses both the principle 
underlying the Directive and the Commission's aims. 
The Committee feels that the proposal, which sets out 
to extend statistical coverage to virtually all the various 
(') OJ No C 257, 10. 10. 1989, p. 7. types of industrial users, should enable the firms con­
cerned to compare gas and electricity prices and thus 
in effect to bring about increased competition between 
suppliers. 
2.2. It should be stressed that the legal and regulatory 
framework within which transport and distribution 
firms operates, can differ considerably from one Mem­
ber State to another, particularly in the electricity sec­
tor: the enterprises in question can be public-sector 
industries (nation-wide, regional or local) with a legal 
or de facto monopoly, or private companies, either with 
or without a monopoly. 
2.3. The price of primary energy inputs (nuclear, oil, 
coal, hydroelectric, natural gas) has a direct impact on 
the cost of generating electricity and thus on prices 
charged to the final consumer. 
2.4. The Committee also stresses the need to evaluate 
the impact which existing disparities in the field of 
indirect taxation, and especially, excise duties, may 
have on energy prices. 
3. Specific comments 
3.1. Firms producing energy for their own consump­
tion should clearly be required to provide statistical 
returns only if part of the energy produced is sold to 
third parties other than distributors. In the latter case 
they would be classified as producer-distributor enter­
prises in the same way as enterprises which are exclus­
ively producer-distributors. These statistical declar­
ations should not, however, involve excessive adminis­
trative costs, especially when sales levels are small. 
3.2. The Committee would draw the Commission's 
attention to the need to take account, when compiling 
energy-price analyses, of the costs arising as a result of 
national regulations, such as those governing environ-
26. 3. 90 Official Journal of the European Communities No C 75/19 
mental protection, which may affect the cost of energy 
production. 
33. There is no doubt that the competitive pressures 
which may arise from greater transparency could be a 
source of concern for domestic consumers. The problem 
is that producer and distributor companies might be 
tempted to pass on to the domestic consumer the cost of 
providing gas and electricity to industry at competitive 
prices. Price transparency could, however, benefit dom­
estic consumers. 
3.3.1. Whilst the Committee realizes that in most 
Member States tariffs for domestic consumers are gen­
erally closely monitored by national authorities, it 
would draw the Commission's attention to the above-
mentioned problem. 
3.3.2. The statistical information gathered in this 
way will also undoubtedly enable consumer associ­
ations to monitor the rates charged to domestic con­
sumers and take action when necessary. 
3.4. It should also be noted that concern about the 
prospect of total price transparency is also being 
expressed by industrial consumers, especially major 
energy users such as the metalproduct, chemicals, pot­
tery and horticulture industries. For these consumers 
the existence of preferential tariffs—provided they do 
not constitute indirect aid, which is prohibited under 
the Treaties—is a factor, sometimes a decisive one, in 
production costs. 
3.5. The Committee calls upon the Commission to 
make a careful assessment of the possible consequences 
of passing on information on 'the distribution of con­
sumers and the corresponding volumes by category 
of consumption' (Article 1(3) of the draft Directive), 
particularly as regards the effect on competition in 
respect of both gas and electricity supply companies 
and user groups. 
3.6. The Committee would reiterate that, subject to 
the above comments, it welcomes the Commission's 
initiative and believes that small firms will also benefit 
from price transparency as a better understanding of 
the tariffs in force will put them in a position to raise 
Done at Brussels, 31 January 1990. any problems of energy supply with their competent 
national authorities. 
3.7. The Commission has responded to the Com­
mittee's concern over administrative dirigisme by claim­
ing that the introduction of the new statistical pro­
cedures will not necessitate the setting up of any new 
specialist body, and that, on the contrary, improved 
market information ought to curb certain national 
interventionist or dirigiste tendencies. The Committee 
takes note of this. 
4. Additional comments 
4.1. In its abovementioned working document on 
the internal energy market the Commission expressed 
its intention to carry out a detailed study, in consul­
tation with the parties concerned, of the cost structures 
of the various energy sectors and to assess the structures 
in order 'to determine whether they are compatible 
with the principles regarding transparent and realistic 
costs'. 
4.2. This question was also tackled at the Energy 
Council of 11 May 1989 at which the President stated 
that, in the context of the Single Market in energy, it 
had to be decided whether it was desirable to set up, 
as the Commission and certain Member States wanted 
to do, a system for extending transparency to cost 
structures, and subsequently to price formation 
arrangements and tariffs, whilst respecting the rules of 
confidentiality and competition. 
4.3. Though the establishment of price transparency 
may also involve ascertaining cost structures, the Com­
mittee nonetheless expresses its reservations over any 
future extension of transparency to cover price forma­
tion and tariffs. Such a step could create a precedent 
for intervention by the Commission in other economic 
areas. This would be neither desirable nor justified. 
4.4. Finally, the Committee welcomes the publi­
cation—and presentation to the Committee—of an 
annual report on the operation of the proposed Direc­
tive. This will make it possible to monitor gas and 
electricity prices. 
The Chairman 
of the Economic and Social Committee 
Alberto MASPRONE