BRUSSELS, Feb. 20 (UPI) — A European Union commissioner threatened energy suppliers with penalties for abusing market power and obstructing competitors.

EU Competition Commissioner Neelie Kroes said harsh penalties would be faced by companies that misuse the market system, the German news agency DDP reported. According to media reports, the move could lead to suppliers being forced to sell their distribution networks.

“Under ownership law, the separation of production and network systems is possible not only through legal action,” Kroes said. “The Commission can also penalize individual enterprises if they have violated the cartel law.”

Last week, some EU states voiced concern over EC plans to create for more competition in the energy markets by breaking up large suppliers. Kroes has been the strongest advocate of the supplier break-up.

A deconcentration law is not expected to pass due to opposition from many EU state governments. The electricity and gas corporations in Germany, France, Italy, Austria and Belgium have been under investigation and Kroes is pushing for a competition law.

In Germany, E.ON, RWE, EnBW and Vattenfall, all had their offices searched for documents revealing secret agreements on the allocation of markets and access barriers for competitors trying to enter wholesale markets and the networks, Kroes said. The EC wants to decide on penalties and splitting up the networks by early 2008.

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