German minister opposes EU utility unbundling idea

BERLIN Sat Jan 20, 2007 1:33pm GMT

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BERLIN Jan 17 (Reuters) - German Foreign Minister Frank-Walter Steinmeier was quoted on Saturday as saying he opposed European Commission proposals on unbundling the ownership of energy networks in the European Union.

"In my opinion, it's an unacceptable proposal for us," Steinmeier was quoted as saying in an interview with weekly magazine Wirtschaftswoche

"We have to position our long term energy police between two guard rails -- on one hand, low prices for consumers and on the other hand maintaining the investment capabilities of our companies to explore new energy sources abroad," he said.

Earlier this week German Economy Minister Michael Glos said Berlin would examine the Commission's proposals.

Glos, who in the past has taken Brussels to task for proposals that would hurt German firms, said recently that the proposed unbundling of the energy networks may be unconstitutional in Germany.

The Commission recommended last week that EU states approve the unbundling of ownership of energy production and distribution. The EU executive also offered but did not endorse an alternative proposal to put distribution networks under the control of separate entities.

Germany's biggest utility E.ON EONG.DE, as well as peer RWE (RWEG.DE), have dismissed the idea that separating supply and distribution businesses would improve competition.

Germany assumed the EU's rotating presidency in Jan. 1.