Manufacturing the EU energy markets

Manufacturing the EU Energy Markets: The Current Dynamics of Regulatory Practice. Since the coming into force of Regulation 1/2003 the Commission has made vigorous use of its power to conduct sector inquiries. In its sector inquiries the Commission has targeted liberalised network industries in particular and utilised the information gathered strategically to inject more competition to those industries either through sector specific regulation or through proactive enforcement of the EU competition rules. In a recent TILEC Discussion Paper, TILEC Member Leigh Hancher and Adrien de Hauteclocque (EUI, Florence) analyse the aftermath of the Commission's sector inquiry in the energy sector and the resulting 'Third Legislative Package' from an institutional and substantive perspective. From the institutional perspective, the creation of the 'Agency for the Cooperation of Energy Regulators' does not appear to change the regulatory structure substantially due to the limited decision-making powers of the new Agency. From the substantive perspective, the limited legislative powers of the EU in the energy sector and the unwillingness of Member States to design strong regulatory policies to inject more competition into these markets result in the enhanced use of competition policy by the Commission for regulatory purposes. The paper emphasises several risks arising from this strategy, including diminished judicial control and accountability and the lack of a consistent regulatory approach to market design.