State faces EU legal action over energy

Ireland is among 16 countries facing possible legal action from the European Commission over its failure to open its energy market and implement EU energy rules.

Austria, Belgium, the Czech Republic, Germany, Estonia, Spain, France, Greece, Ireland, Italy, Lithuania, Latvia, Poland, Sweden, Slovakia and Britain were sent final warnings, known as "reasoned opinions", the EU executive said in a statement.

If a member state fails to comply with a reasoned opinion by the required deadline - typically two months - the commission may bring the case before the European Court of Justice, the EU's top court.

"The commission regrets that insufficient progress has been made by member states in implementing in letter and in spirit EU 2003 directives setting up an internal market in gas and electricity," it said in a statement.

The commission wants to make the European Union economy more efficient and the measures approved yesterday were generally aimed at removing barriers to competition.

In several member states, the regulated tariffs for energy are set at a level so low compared to market prices that they fully prevent the market opening, according to the commission. In Ireland's case, the infringement relates more to the fact that the right to supply at a regulated price is granted on a discriminatory basis, the commission said.

While a number of countries face sanction over a lack of compliance with EU energy rules on unbundling of transmission and distribution system operators, the issue in Ireland is more one of proper designation of the system operator, it said.

Ireland has also been named as a state which has not notified the commission about its public service obligation (PSO) and the PSO's impact on competition.

A spokesman for the Department of Communications and Natural Resources said it was aware of the EU move and that it would be considering the reasoned opinion.

He said the department's green paper on energy was addressing many of the issues.