While details of the deal still need to be hammered out, the broad outline of the agreement is based on a 'third way' compromise proposal elaborated jointly by the Commission and the outgoing Slovenian EU Presidency in May (EurActiv 16/05/08).
It would allow former state monopolies such as EDF or GDF in France and E.ON or RWE in Germany to retain ownership of their gas and electricity grids. However, they would have to leave their management to an independent transmission operator (ITO) with "effective decision-making rights" over day-to day activities such as network operation and maintenance.
The alternative model should be subjected to a review by the Commission two years after entry into force of the directive, according to the agreement.
Ministers also discussed the role and powers of a new EU Agency for the Cooperation of Energy Regulators (ACER) to oversee the functioning of energy markets, notably with respect to cross-border cooperation between transmission system operators (TSOs). The agency should be independent from the Commission and member states, but its powers should not supersede those of national regulators.
This is contrary to the wishes of a majority of MEPs in Parliament's Industry (ITRE) Committee, who on 28 May voted favour of strong regulatory powers for ACER (EurActiv 29/05/08).
The full Parliament will have its say on the Council's agreement during plenary votes later this month and in July. A slight majority of ITRE Committee MEPs consider ownership unbundling as the preferred option and remain sceptical of the ITO model (EurActiv 07/05/08).