UK 'faces higher
gas bills after Spanish takeover'
Oct 18, 2005 - Evening Standard; London
Author(s): Robert Lea
THE creation of an overarching national energy champion in Spain via
Gas Natural's Pounds 15 billion takeover of its largest electricity
generator, Endesa, will have dire consequences for competition in the EU
power market, leading to higher UK household bills.
That is the warning from the UK's biggest residential energy group
British Gas, whose parent Centrica is this week demanding the European
Commission block the deal.
Centrica is telling Brussels competition officials that, unless it
rules the deal out of bounds, it will set the European Union on a course
of consolidation within national boundaries which in turn will continue
to keep prices artificially high, forcing up bills for an ever more gas
importreliant UK.
Heading a lobby of UK energy interests, Centrica finance director
Phil Bentley told Brussels officials: "It is critical for the economic
competitiveness of Europe that full competition in energy markets is
implemented swiftly and energy costs for industry and consumers are
lowered."
Citing Gas Natural's hostile approach to Endesa, which follows E.On's
takeover of Ruhrgas in Germany, Bentley continued: "We simply can't
afford to allow large national champions to be further strengthened in
the markets where they are already dominant, before competition has even
been properly established, where we have yet to see material new entry
or competition in energy supply.
"It is time for change, for the era of monopoly suppliers to end. We
need to see the German and French governments set an example by
following the UK and taking real steps to liberalise their markets."
Centrica argues rising UK energy prices are largely the result of
high prices on the Continent because there is no competition there at
the residential supply level, meaning suppliers can carry on indexing
their gas charges to the high oil price. With North Sea output winding
down, higher continental gas prices are pushing up purchasing costs for
the UK's household suppliers.
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