The Strasbourg plenary vote put an end to year-long squabbles over the third package of legislation to liberalise EU energy markets. The text will now be transmitted for adoption by the EU Council of Ministers representing the 27-member bloc, formally putting an end to the process.
The new legislation consists of two directives on rules for the internal electricity and gas markets, two regulations on conditions for access to those markets and one establishing an 'Agency for the Cooperation of Energy Regulators'.
The Parliament and governments clashed on a number of issues, including the separation of vertically integrated power companies' production and transmission assets, consumer rights and the power of independent transmission operators.
Working under pressure to push through the legislation - deemed crucial to the EU's energy security - before the elections, the Parliament dropped a demand that full 'ownership unbundling' had to be the only option for the electricity market.
Instead, MEPs signed up to a deal which also allows companies to opt for two alternative models which let them retain ownership of their gas and electricity grids. This is, however, on the condition that they either hand over the operation of their transmission networks to an independent system operator (ISO), or adhere to rules which guarantee that the two sectors can operate independently. Such rules include the establishment of a supervisory body and the provision of "cooling-off periods" for employees before moving from transmission to generation.
Legislation too weak, say critics
MEPs voting against the new legislation said it was neither strong enough to contain energy giants' power, nor to provide for genuine competition.
At a time when German cartel authorities are starting to investigate market-price manipulation by the four big domestic energy utilities, and France's EDF is answering charges of spying on Greenpeace activists, Green MEPs Claude Turmes (Luxembourg) and Rebecca Harms (Germany) argued that the outcome of the legislation was testament to the fact that "energy oligopolies still have most EU governments and energy ministers in their pockets".
They warned that in a few years' time, the EU would be discussing a fourth liberalisation package.
Smaller energy suppliers have long complained of big players depriving them of access to energy grids. Successful market liberalisation is also seen as a prerequisite to guarantee that renewable electricity can access to networks, helping to achieve the EU's commitment to produce 20% of its energy needs from renewables by 2020.
Lower energy prices promised
The new legislation is expected to reduce consumers' energy bills by stimulating more cross-border trade, which would increase competition on EU markets. However, the Commission has argued that this would not guarantee lower prices, as the liberalised market cannot control energy sources and taxes.
Consumer protection and universal access
Nevertheless, the agreement endorsed yesterday takes consumers' concerns into consideration, largely due to heavy haggling by the Parliament. As a trade-off for the compromise on ownership bundling, Parliament obtained recognition of the concept of energy poverty, obliging member states to offer measures such as social security benefits to provide vital energy supplies to poorer customers, and requiring governments to guarantee universal access to electricity for all households.
Moreover, the new legislation gives consumers the right to change their gas and electricity suppliers within three weeks and without charges. They are also promised access to all relevant gas and electricity consumption data, allowing them to control their energy bills.
Member states are now expected to endorse the agreement some time in the summer.