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EU urges quicker energy market reforms

Feb. 29, 2012 at 6:30 AM   |   Comments

BRUSSELS, Feb. 29 (UPI) -- Bulgaria, Cyprus, Spain, Luxembourg, Netherlands, Romania, Slovakia and Estonia are moving too slowly in implementing energy market reforms, the EU says.

The European Commission warned the countries Monday they could be subject to fines imposed by the European Court of Justice if they don't move more quickly to implement the electricity and natural gas market liberalization measures included in the EU's Third Energy Package.

The deadline for each of the 27 EU member states to "transpose" the binding directives into national law was March 2011 -- one month after the EU heads of state agreed on the need to complete the reforms by 2014.

The energy package seeks to "unbundle" vertically integrated energy companies that control both supplies and transmission networks, thus allowing rival suppliers unfettered access to a single European energy market and providing choices for customers.

The aim is to free European consumers from monopolies such as Russia's Gazprom, which can virtually name their prices for energy by controlling the distribution infrastructures in local markets.

Brussels says privatizing distribution networks will strengthen the independence and powers of national regulators as well as improve "the functioning of retail markets to the benefit of consumers."

But the rollout of the Third Energy Package has been slow as some EU members balk at breaking up their energy monopolies, thus exposing their own markets to greater competition.

"As to date Bulgaria, Cyprus, Spain, Luxembourg, Netherlands, Romania and Slovakia have not informed the commission of any transposition measures for the (gas and electricity) directives and Estonia has not done so as regards the gas directive," an EU statement said.

Consequently, the commission said it sent 15 "reasoned opinions" to the eight member states urging them to "comply with their legal obligation" and giving them two months to respond before referring the cases to the European Court of Justice for possible fines.

"Further steps" may be coming for countries that have only "partially transposed" the energy directives, it added.

The warning came only a week after the leaders of four of the cited nations -- Spain, the Netherlands, Slovakia and Estonia -- themselves called for the opening of European energy markets as a way to spur recovery from the debt crisis, the Financial Times noted.

Bulgaria's energy ministry responded Monday by declaring the country is indeed in the process of transposing the EU directives into national legislation, the Sofia News Agency reported.

In a statement the government pointed out that amendments incorporating the directives into the Bulgarian Energy Act were adopted by the Cabinet and passed on to Parliament Jan. 23.

"It is expected that these amendments will be adopted within a month," the ministry said, adding that the restructuring of the Bulgarian national electricity company NEK is also well along, with an operator for a spun-off grid system to be chosen soon.

The Bulgarian news agency reported the warnings from Brussels aren't anything new: Many countries were late in adopting the EU's second energy package as well, with the European Commission resorting to formal infringement procedures against nearly all of them.

© 2012 United Press International, Inc. All Rights Reserved. Any reproduction, republication, redistribution and/or modification of any UPI content is expressly prohibited without UPI's prior written consent.
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