EUobserver.com

EUOBSERVER / BRUSSELS - Members of the European Parliament's industry committee have backed the European Commission's idea of separating electricity companies' production and supply wings by forcing the parent company to sell its transmission networks.

In a vote on Tuesday (6 May), a majority of MEPs were in favour of so-called full ownership unbundling, making it clear that companies' asset break-up is the "preferred option" when it comes to liberalisation of the EU's energy sector.

At the same time, the committee rejected an alternative plan tabled by a group of eight EU states - Austria, Bulgaria, Germany, Greece, France, Latvia, Luxembourg and Slovakia - known as the transmission system operator (TSO) or the third option.

Under this scenario, the transmission system operator is a separate firm, distinct from the parent electric company, but at the same time the TSO is owned by the same set of shareholders as the parent electricity firm.

Some 26 committee members voted against the third option, 22 MEPs were in favour, while three abstained.

"This was very much a first step in ensuring consumers have their voice heard in the energy field," UK socialist Eluned Morgan, in charge of the dossier, was cited as saying by Reuters.

"I hope this gives a clear indication to the council [representing EU states] that we're not in the mood to compromise," Ms Morgan added, referring to the claim that only full ownership unbundling allows new entrants to enter the market, boosts competition and cuts prices in the energy sector.

But pointing to the narrow result, Slovak conservative Jan Hudacky told EUobserver that Tuesday's vote will not necessarily affect the ongoing battle between EU governments over the commission's drive to liberalise the union's energy sector.

Each group in the parliament is split along national lines, he said, suggesting that the final vote by the entire assembly in June could see a different outcome.

According to German centre-right MEP Angelika Niebler, who chairs the industry committee, "there will be a compromise, including the third way, or there will be nothing", Reuters reports.

Meanwhile, one EU diplomat told EUobserver that the European Commission was willing to consider the TSO proposal, but only under the condition that regulatory bodies' role and powers are further strengthened in the proposal.

Currently, there are only two options officially tabled by the commission - the full ownership unbundling and an independent system operator (ISO).

Under this proposal, big energy companies would retain ownership of the transmission lines, but hand managing control over networks to an entirely separate operator. This company would not share any shareholders with the parent company.

A political agreement between all 27 EU governments is expected in June, with the upcoming French EU presidency tasked to wrap up the dossier by translating the deal into a concrete legislative act.

Energy liberalisation critics suffer blow in EU parliament