Neelie Kroes Threatens EU Energy Suppliers With Investigations
Neelie Kroes expressed dissatisfaction with the pace of the liberalization of the European energy markets. The cold winter promted consumer outrage in a number of member states over oil, gas, and electricity prices rising in lockstep in spite of more or less constant production costs for gas and electricty from nuclear power sources. According to this story in the International Herald Tribune
Kroes highlighted several areas that stand in the way of new companies entering the sector. For one, she said there was still too much concentration of power and too few hands in many of the bloc’s 25 member states, with the old companies continuing to control imports and domestic production. Long-term contracts between production and retail companies blocked access for newcomers, Kroes said, adding that there was still too much “bundling” in which a single company was active in both production and retailing. At the same time, barriers to cross-border supplies of gas and electricity are preventing the development of an integrated EU energy market, she said. Insufficient transparency by the older companies undermines the position of new entrants, Kroes said, and there is little trust between consumers and industry over prices.It will be interesting to see if and how the EU will respond to these concerns. In the US, the outcry over higher oil prices (which are still significantly lower than they are in Europe) has primarily resulted in ill-coceived proposals for making “price gouging” illegal.
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