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EU to check if E.On's proposed grid sell-off will solve antitrust problems

EU to check if E.On's proposed grid sell-off will solve antitrust problems

German energy company E.On AG's fight with European Union regulators looked closer to an end on Thursday, as the EU executive said it would check whether a plan to sell off E.On's power grid would eliminate antitrust problems.
The European Commission and E.On said the company offered to settle several ongoing antitrust cases in the electricity sector by selling off its transmission system network to an operator not involved in generating or supplying power.
In return for the EU dropping the threat of fines against it, E.On has also promised to divest 4,800 megawatts of generation capacity to rivals.
The EU is investigating wide problems in the power sector. It criticizes former state-run monopolies for having what it says is too much control over the supply chain, which keeps prices high and limits much-needed investment to expand capacity.
Regulators will check whether E.On's commitments address these problems by asking rivals and customers to comment on them. If the E.On plan gets the green light, its promises would be made legally binding and the EU would end the antitrust cases against the company.
The EU can fine companies as much as 10 percent of annual global revenue for breaking antitrust rules. E.On had sales of euro67.76 billion (US$88.77 billion) in 2006.
"These proposals, if adopted, would structurally change the electricity sector in Germany and could spur competition in the sector to the benefit of domestic and industrial customers," the Commission said.
EU officials are investigating possible cartels between German gas and electricity companies, raiding E.On Ruhrgas AG and electricity supplier RWE AG in May 2006. They also claim the German power market is run by an oligopoly of E.On, RWE, Vattenfall AB and EnBW AG.
They fined E.On's Energie division euro38 million (US$56 million) last month for tampering with a plastic seal regulators fixed to secure an office during that raid. The EU said the broken seal meant the company had the chance to remove incriminating documents.
EU Competition Commissioner Neelie Kroes is looking for other energy companies to choose between operating energy infrastructure and generating or selling power, saying this would be the most effective way of generating customer choice.
EU energy ministers are Thursday discussing her call for large energy companies to be split up with France and Germany leading a charge to water down her plan and make only minor changes to the way major companies operate.


Updated : 2021-03-02 16:37 GMT+08:00