The informal compromise deal, negotiated between MEPs in the Parliament's industry committee and the Czech EU Presidency, still needs approval by the full EU assembly and member-state representatives in the Council of Ministers.
The deal was announced yesterday (24 March) after negotiations had dragged on due to substantially different views, notably on the issue of "unbundling".
Both the Parliament and Commission congratulated the Czech EU Presidency for tabling a "bold" compromise, although MEPs had previously expressed concern that other member states may not have seen eye-to-eye with the Czechs (EurActiv 19/02/09). Nevertheless, negotiators themselves had expressed optimism that the deal would be acceptable for all parties.
France and Germany win 'third option'
The Commission originally proposed two approaches. It said member states could either opt for full unbundling, requiring integrated energy companies to sell their grids to fully separate the production and transmission functions, or allow companies to retain their ownership of transmission systems, but let a separate body take over their operation.
MEPs insisted throughout the talks that full unbundling was the only option for electricity and supported a third option, involving a strong independent transmission operator, for gas. The Council, under pressured from France and Germany, said the third option should apply for both.
Chinese walls
The Parliament finally gave in, and the compromise allows member states to choose between all three options.
MEP Eluned Morgan (PES, UK), rapporteur on the internal electricity market, said the compromise provided for "thickening of the Chinese walls" between production and transmission functions. She said the Parliament had been able to concede because it had managed to ensure the independence of national regulators in exchange.
Moreover, Morgan pointed out that European companies were effectively already going down the road of ownership unbundling.
In early 2008, German energy giant E.ON offered to sell-off its high voltage electricity grid to settle ongoing EU antitrust inquiries, in a surprise move that infuriated the German government (EurActiv 29/02/08).
Independent regulators
The third energy package differs from the second in that it details the powers and roles of the national regulators. A deal breaker for the Parliament was that the independence of both the national regulators and the community-level agency overseeing their work was strengthened in the agreement.
Indeed, the agency will be tasked with following the 10-year network development plans to be submitted by national authorities and giving recommendations about them.
Giles Chichester MEP (EPP-ED, UK), who steered the agency proposal through the Parliament, said he was satisfied that MEPs had won supervisory rights over the agency, which will be accountable to the Parliament.
The third package will also establish a European Network of Transmission System Operators for Electricity (ENTSOE) and gas (ENTSOG) to implement common codes and security standards, to facilitate cross-border trade by creating equal operating conditions in different member states.
Consumer rights at the centre
The Parliament managed to insert strong obligations on consumer rights to the compromise text. Once the law enters into force, energy customers will be able to change their gas and electricity suppliers within three weeks free of charge, and have access to more information, independent mechanisms for treating complaints and compensation for service failures.
Energy poverty was also dealt with in the text, which requires member states to guarantee universal service to all household customers.
But the measures go still further: national governments will also have to protect vulnerable energy consumers and take "appropriate measures" to address energy poverty, including national energy action plans or social security benefits to ensure minimum energy supply to households.
Smart metering
The text also requires smart metering systems to be fitted to 80% of homes by 2020 as a way of enabling consumers to better monitor their energy use and to avoid peak hours.
EU member-state representatives in Brussels (Coreper) will be asked to endorse the compromise text on 27 March. The Parliament's industry committee will vote on it on 31 March, before the full House votes at the end of April or the beginning of May.
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