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French power

regulator insists

on grid independence

PARIS: The head of France's new electricity regulatory authority said on Thursday it was essential the country's transmission grid operator was truly independent of power giant Electricite de France (EDF).

The grid, soon to be opened to partial competition, is managed by a unit of EDF which is separate from its parent for accounting purposes but is not legally a separate company.

"We have to ensure the transmission system operator, an entity that will be created within EDF, manages transmission problems as if it were an independent company," regulator Jean Syrota told a news conference to inaugurate France's Electricity Regulatory Commission (CRE).

"That means it has to have not only teams which manage the grid and dispatching but also, in my view ... all the functions one finds in a company, including legal, economic, communications and other departments," Syrota said.

Syrota, a former chairman of French nuclear fuels group Cogema, said he also believed a postage stamp system of tarification was better than a distance-based system of charges.

"When you put electricity into one part of a grid with lots of different links and take it out of another you don't know which path the electricity takes. It might follow a direct line, it might not, depending on the other inputs and outputs at the time," he said. "So that means you can't have distance-based tariffs."

He added that the postage stamp solution had been chosed by nearly all countries in the 15-nation European Union.

The CRE was set up to ensure fair competition in the French power market and settle disputes when the market is partially opened to competition.

The basic law allowing industries and power plants consuming over 40 gigawatts hours of electricty a year -- or 25 percent of consumers -- to buy electricity from the producer of their choice was approved in early February.

But the law will not come into force until decrees giving precise interpretations of certain of its elements are approved.

French Industry Secretary Christian Pierret told the news conference the decrees should be approved "within two weeks".

The CRE's opinions on rules governing the management of the grid and on tariffs would be approved "as soon as possible", Syrota said.

The CRE will make proposals or submit opinions to the government but has no decision-making powers.

Dominique Maillard, an industry ministry official representing the government, which appointed three of the CRE's six members including Syrota, will take part in its meetings.

Pierret said the CRE's opinions and proposals would be made public where this was legally required.-Reuters