Brussels, 12/06/2008 (Agence Europe) - On Thursday 12 June, the European Commission called on stakeholders to send it their comments on the commitments proposed by E.ON to settle the question of possible abuse of dominant position. E.ON is optimistic. It believes that these commitments, which essentially consist of selling off several electricity plants, will be approved by other market actors. If this proves to be the case, the commitments in question will, after confirmation by the Commission, become binding.
A spokesperson for the German energy provider stated: “We have put together assets that we think will fulfil the requirements”. He also proposed to sell off production capacity of 4800 megawatts (hydroelectric plants, gas, coal, lignite and nuclear - the list can be consulted in the EU Official Journal of 12 June). This approach aims to respond to some of the Commission's concerns about the retail market in Germany, where the Commission accuses E.ON of “withholding additional generation capacity”, according to Jonathan Todd, the spokesman for the European commissioner for competition. Todd explained that this leads not just to price increases but also makes investment in energy production less attractive for new market arrivals. The Commission's second concern is whether E.ON has abused its dominant position on the German balancing electricity markets (balancing energy is last-minute energy necessary to maintain the frequency of the current in the grid) by favouring its own production affiliate, passing increased costs on to final consumers and by preventing power producers from other member states selling balancing energy into German markets. E.ON is therefore proposing to sell off its very high tension network transport lines (380/22 kV) as well as the E.ON Netz controlled user system. Managers of these systems would then remain freed to choose their own energy balancing provider.
The Commission is calling on stakeholders to present their observations on E.ON commitments by 12 July. If the responses are positive, the Commission will adopt a decision that will make the German energy provider's commitments binding. If E.ON does not respect them, the Commission could impose fines on it (up to 10% of turnover) without even having to demonstrate infringement of competition rules. (C.D./transl.rh).