© European Communities

Meeting in Luxembourg on 6 June, the EU energy ministers struck a deal on how to separate gas and electricity supply and production activities from network operations. This "unbundling" was called for in the Energy Policy for Europe Action Plan endorsed by the 2007 Spring European Council. This is clearly in the interest of European consumers trying to cope with rising energy prices, as it helps maintain sound competition among players in the internal energy market.

The Council reached a broad agreement on the essential elements of the third energy package, which consists of five legal acts. They relate to the internal market in gas and electricity, cross-border exchanges in electricity, access to the natural gas transmission networks and a new agency for the cooperation of energy regulators.

As all member states were not able to agree with full ownership unbundling, favoured by the Commission - in which case no company could both own a transmission network and produce or supply energy - the deal was made on the basis of a presidency compromise. In particular, an option providing for a so-called independent transmission operator (ITO) was agreed upon for member states where the transmission system of gas or electricity belongs to a vertically integrated undertaking on the entry into force of the directive in question. In this way certain companies could retain ownership of transmission systems on condition that these are managed by an ITO.

This legislative package falls under the co-decision procedure of the Council and the European Parliament and the latter is expected to give its opinions in June and July.

More information:

Council Press release (pdf)

Council webcast of press conference

Upcoming events

Transport, Telecommunications and Energy Council, 12 and 13 June

General Affairs and External Relations Council, 16 and 17 June