January 11, 2007	Thursday	Zilhaj 20, 1427

BRUSSELS, Jan 10: The European Commission vowed on Wednesday to take action against companies stifling energy competition and driving up prices for consumers, following an inquiry into the sector.

The EU's antitrust watchdog, after a probe of more than 18 months, found that the energy market in the European Union was too concentrated in the hands of companies that controlled supply, generation and infrastructure.

The release of the competition report, which coincided with publication of a broader common EU energy policy plan, also highlighted lack of investment in infrastructure and warned of possible collusion between some operators to share markets.

“This report will make uncomfortable reading for many energy companies,” EU Competition Commissioner Neelie Kroes predicted.

“On the basis of the solid facts contained in this report, the commission will take further action under the competition rules and act to improve the regulatory framework,” she said.

To correct the situation, EU regulators would step up scrutiny of future energy sector mergers and state subsidies while staying on the look-out for evidence of collusion in the market.

The European Union's executive arm found that competition was in particular stifled by big energy groups with supply, generation and network activities that reduced potential competitors' access to critical market information.

Such companies could in addition restrict access to key transmission and distribution networks as well as storage sites, fragmenting the market, especially at the cross-border level.

Because of their integrated structure, such companies also sometimes held off making investments in infrastructure to benefit other branches of the group.

One idea the commission has floated to increase competition is to force big integrated energy companies to separate their networks from their supply and generation businesses.—AFP