WRITTEN QUESTION E-3634/00

by Erik Meijer (GUE/NGL) to the Commission

(22 November 2000)

Subject: Measures to tackle energy prices rising as a result of liberalisation, privatisation and competition

1. Is the Commission aware that the option announced for firms and individual consumers of obtaining their electricity from different producers in the same country, or in different countries, appear to be difficult or not feasible because high-voltage network have insufficient capacity and because of price agreements required in the past to protect previous investments?

2. Is the Commission also aware that the priority enjoyed by the largest firms in the right to free purchase from new electricity suppliers and the fact that medium-sized firms will have to wait until 2002 and individual consumers until 2004 mean that the latecomers will have to pay a higher price than privileged early arrivals for what will become a more scarce form of energy?

3. Can the Commission confirm that in practice this form of liberalisation means that for many customers, in particular the great majority of domestic users, prices will rise rather than fall?

4. Does the Commission agree that liberalisation and privatisation of the energy sector is a particular disadvantage to individual consumers because of their unequal position on the market, and that consideration should therefore be given to stopping and reversing this trend, as is now the case in the state of California?

5. What does the Commission intend to do about the impending shortage of electricity, the price increases and the unequal position of the different groups of customers on the electricity market?

Source: The Dutch newspaper De Volkskrant of 4 November 2000.

Answer given by Mrs de Palacio on behalf of the Commission

(9 January 2001)

1. The Commission is aware of the fact that the possibilities of companies to import electricity from abroad is limited in some Member States due to the fact that not enough interconnection capacity is available to satisfy all import demands.

The Commission is concerned about the effect this situation has on the development of competition on the internal market. It is, therefore, working with the national regulators and the Member States to ensure that the available capacity on the interconnectors is allocated to the market parties in a non-discriminatory and transparent way. The Commission is also urgently looking into the compatibility of the existing reservation agreements on various interconnectors with the competition rules. Should these agreements be in violation of Articles 81 and 82 (ex Articles 85 and 86) of the EC Treaty, they are to be considered void. This could potentially reduce the current scarcity on various interconnectors.

2. and 5. The Commission is aware of the Dutch timetable for the opening of the electricity market to which the Honourable Member refers. However, the Commission has no grounds to believe that electricity will become scarce when further consumers receive the possibility to choose their supplier in 2002 and 2004 respectively.

3. The Commission cannot confirm the statement of the Honourable Member that a gradual approach towards market opening leads to a rise in electricity prices. The Commission does note however, that households profit the most from falling electricity prices in Member States that have chosen to give all consumers free choice of supplier, as for instance in Germany and Finland.

4. The Commission agrees with the statement of the Honourable Member that the position of consumers on the internal electricity market is unequal due to the fact that the degree of market opening differs from Member State to Member State. It is the Commission's intention, in this respect, to make proposals which would lead, within the appropriate period, all consumers throughout the Community to be able to choose their supplier, thus profiting from the benefits of market opening in terms of lower prices and better service.