EU Govts Mull Softer Option To Split Energy Giants - Official
Friday May 9th, 2008 / 15h51
BRUSSELS -(Dow Jones)- European governments are giving up hope of adopting in full a radical European Commission plan to reform Europe's energy market, according to a European Union official. Instead, they are leaning towards a watered-down proposal from eight countries led by France and Germany. After a meeting of top government officials this week, Slovenia, which holds the six-month rotating E.U. presidency, "noted willingness to develop another option that would build upon the proposal by the eight member states," even though most countries prefer the commission's plan, the official told Dow Jones Newswires, citing an after-meeting report. The commission, the E.U.'s executive body, wants large energy companies such as Germany's RWE AG (RWEOY) and France's Electricite de France (1024251.FR) to sell their electricity grids and gas pipeline networks, to boost competition and reduce energy prices. The eight countries strongly opposed to the scheme have formed a blocking minority that could stop any agreement among the 27 E.U. countries. The alternative plan steps back from forcing an ownership split, leaving utilities with some control over the grids. The commission has said this proposal won't ensure independent decision-making in operating the grids. The eight states, France, Germany, Austria, Greece, Luxembourg, Bulgaria, Latvia and Slovakia, laid out their alternative proposal in January. The official said that, faced with deadlock, negotiating on the alternative plan was the only way forward. At the meeting this week, government officials agreed that network operators should be granted "effective" independence for their investment decisions and management structure, at the same time "preserving the financial interest of the parent company," the official said. The presidency and the commission are now drafting a "working paper" based on the Franco-German proposal that will serve as the starting point for negotiation among the 27 E.U. countries, he said. The paper will be ready soon, he added. The E.U. governments have agreed on a June deadline to reach a political accord on the reform of energy markets. -By Alessandro Torello, Dow Jones Newswires; +32 2 741 14 88; alessandro.torello@dowjones.com
