Dominant Position Abuse by Energy Transmission Systems

Opinion: Abuse of Dominant Position by Energy Transmission Systems Operators

(Article published in the newspaper “Kathimerini” on February 11, 2012)

Major developments and many structural changes take place for energy companies and
mainly for the transmission systems owners and operators (TSOs). The networks
constitute the basic requirement for the existence of competition, since their users, i.e.
electricity and gas production and supply companies, depend on their existence and
expansion, in order to exercise their activities effectively, under competition conditions
in the local Greek and other European markets. Companies owning or operating such
networks do not face directly competition in the market of their own network, where
they operate as natural monopolies, but more than this, they have been imposed with the
responsibility to protect competition in production and supply markets. Basically the
TSOs, who belong to vertically integrated companies, have the capability and the
motive to abuse their dominant position in favor of the affiliated production and supply
companies and to the detriment of their competitors and the consumers.

In the last few years, cases of dominant position abuse by TSOs have been increasingly
and firmly handled by the Commission of the European Union, which gathered
evidence on the anti-competitive behavior of major energy companies resulting to
structural remedies offered by the latter to the Commission. Such an abuse was based,
among others, on the denial by the TSOs of network access to third parties, competitors
of the vertically integrated company, on the imposition of unduly high access fees and
network usage fees, on omitting of taking proper congestion management measures or
the lack of investments in the networks in order to cover future user needs.

Following intervention by the Commission, major energy companies, such as the
German ones RWE and E.ON, have been obliged to sell their networks, the former its
high-pressure gas transmission system and the latter its electricity transmission system,
to independent investors, so as to appease the Commission’s competition concerns
regarding the discretionary treatment of competitors in the production and supply chain.
The sale procedures has been completed, while RWE received a price of 500 million
euro and E.ON over 1 billion euro, according to the German press. In view of these
developments, other large companies have also sold their networks, such as Vattenfall,
while RWE has additionally sold its electricity transmission network.


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