Ownership Unbundling and Property Rights in the EU Energy Sector

Abstract

Abstract On 19 September 2007, the European Commission (EC) proposed a number of amendments to the existing EU energy legislation, including a further step in the gradual introduction of unbundling of energy activities, the so-called ownership unbundling: electricity and gas companies involved in both network (transport and/or distribution) and commercial (supply and/or production) activities, legally would no longer be allowed to be engaged in those two types of energy activities, and consequently such organizations would be asked to divest ownership in one or both activities. On 22 April 2009, the European Parliament adopted a resolution on the common position of the Council, whereby a new unbundling option was given to member states, together with the two options originally envisaged by the EC's proposal. Two months later, on 25 June 2009, the European Council adopted the new rules on the Internal Energy Market (IEM). The new Electricity and Gas Directives were published in the Official Journal of the EU on 14 August 2009 and entered into force 20 days after their publication. Member states are required to implement these directives in national law within 18 months after entry into force, with the exception of the rules on unbundling. This chapter assesses how the provision of ownership unbundling when (and if) adopted by any of the member states, will affect the property rights of gas and electricity network owners.