Brussels, 11/06/2007 (Agence Europe) - According to the press on 11 June, Commissioner Neelie Kroes is preparing a formal enquiry into the French system for artificially maintaining low electricity prices by paying state compensation to some operators. This situation makes market access for companies new to the market difficult because they do not benefit from state aid, which goes against Community law on competition and state aid.
AFP and the daily, La Tribune, both quote a source close to the dossier, according to which the commissioner intends to follow up the conclusions of last year's sectoral investigation (EUROPE 9133), which revealed serious malfunctions in the internal gas and electricity markets. Spain experienced this process last January with the launch of a similar anti-subsidies procedure into the Spanish energy market (EUROPE 9352); after delays in France, which one can partly put down to the elections, France now risks experiencing the same grilling. This initiative does not affect the infringement procedure opened by Energy Commissioner Andris Piebalgs in 2006, although the latter also focuses on the French energy sector. The commissioner illustrated a lack of adequate transposition of the 2003 directives on the opening up of the gas and electricity markets (2003/54/EC) in 16 member states, including France (EUROPE 9326) and the “persistence of regulatory tariffs”.
The commissioner for competition's possible investigation will, however, be based on another infringement committed by the French state in the same field - illegal application of state aid that is likely to distort competition, namely, the subsidising of a number of important operators. Although the avowed aim of this initiative is to protect industrial customers from price hikes from these operators in a liberalised energy market, it still means that secondary effects relating to distortion of competition would be illegal. This could occur by keeping prices low with new competitors being unable to match these prices. In this context, the opening up of the market, planned for 1 July, will not allow new competitors to enter the market on terms equal to those who are already operating, even if consumers, according to a Council of French ministers' press release on 6 June, are free to choose their provider. Ms Kroes' spokesperson informed EUROPE that they did not wish to comment on the matter, and no confirmation nor quashing was made as to the commissioner's intention to make an announcement on this issue on Wednesday. (cd)