Dutch Utility Unbundling Rules May Be Lawful, EU Top Court Says

Dutch curbs on utilities’ control over energy grids may be justified, the EU’s top court said in a possible defeat for companies forced to split up under the law.

“Maintaining undistorted competition in order to protect consumers and ensuring security of energy supply constitute overriding reasons in the public interest,” the EU Court of Justice in Luxembourg ruled today, according to a statement. Restrictions should be “appropriate to the objectives pursued” and must not “go beyond what is necessary,” the ruling said.

Dutch utilities began separating commercial operations such as production, trading and sales from grid units in 2008 after parliament approved the unbundling law and had until Jan. 1, 2011, to complete the process. Shareholders of the two biggest utility companies, Essent NV and Nuon NV, have since sold their commercial operations to RWE AG (RWE) of Germany and Sweden’s Vattenfall AB, respectively.

Essent, Delta NV and Eneco Holding NV, which were active in energy production and distribution, were forced to split up or have their network operations taken by a different company to comply with the new law.

Arendo Schreurs, a spokesman for Middelburg, Netherlands-based Delta and Cor de Ruijter, a spokesman for Rotterdam-based Eneco, weren’t immediately available to comment.

The Dutch Supreme Court in February 2012 asked the EU court whether the rules are in line with the 28-nation bloc’s law. Eneco has said that a forced unbundling would pose a threat to the company’s sustainability strategy.

The cases are: C-105/12, Essent and Others, C-106/12, Eneco Holding, C-107/12, Delta.

To contact the reporter on this story: Stephanie Bodoni in Luxembourg at sbodoni@bloomberg.net

To contact the editor responsible for this story: Anthony Aarons at aaarons@bloomberg.net

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