The European Union (EU) energy ministers yesterday failed to decide on a proposal to separate the supply and production activities of big energy companies.
"We didn't reject and we didn't endorse," said EU Energy Commissioner Andris Piebalgs, "we endorsed the goal."
Stopping short of a clear-cut decision, energy ministers from 27 EU member states called on the European Commission to elaborate its proposal "taking account the characteristics of the gas and electricity sectors and of national and regional markets," according to a statement released after their meeting.
To ensure the free flow of gas and electricity within the EU and to guarantee fair prices for consumers, the European Commission, EU's executive arm, proposed in its energy policy package released last month to split electricity and natural gas companies into separate supply and production businesses, a process known as ownership "unbundling."
In a report presented to the ministers yesterday, European Commissioner for Competition Neelie Kroes-Smit concluded a recent inquiry into the energy sector by saying that full ownership unbundling would be the optimal solution to addressing the problems of the European energy market.
Problems highlighted in the report included too much concentration of the energy market, insufficient unbundling of network and supply activities and absence of cross-border integration and cross-border competition.
"This state of affairs is undermining our shared objective of ensuring secure, affordable and sustainable energy supplies," Kroes-Smit told the ministers.
The bold proposal, however, was opposed by France, among others, which put forward an alternative based on its own system where energy producers are, with certain safeguards, allowed to own distributors.
"It is not always easy to reach a common decision," said German Minister of Economics and Technologies Michael Glos, whose country holds the rotating EU presidency.
Yesterday's meeting was preparation for a EU summit scheduled for March which will have the final say on the proposal.