William Catacosinos has resigned as chairman of MarketSpan Corp., the utility formed to replace the troubled Long Island Lighting Co. Catacosinos is under investigation by...
utility, are managed independently, with sufficient "Chinese walls" in place to ensure full transparency and fair access. The only country that still has not accomplished this is Latvia.
Most countries in Europe have one transmission system operator (TSO) responsible for operating the entire nation's grid. However, there are a few exceptions, including Germany, Austria, and Denmark, where transmission operators are only responsible for certain regions and must coordinate with one another for cross-regional flows. The ownership of TSOs varies. In some cases, the state owns the TSO, such as in the Czech Republic and Norway. In other cases, the TSO is separated officially from the incumbent utility but continues to be owned by it, such as in France, Germany, and Austria. The TSO also can be owned by a separate private company, such as in the UK.
Most countries have several distribution system operators, depending on the size of the country and the original structure of the market. Many European countries had a heritage of small municipal distributors, resulting in hundreds of local distribution companies. With liberalization, many of these distributors are being acquired by the larger actors in the market, as is clearly evidenced in Germany, where E.On and RWE directly and indirectly control 70 percent of the country's distribution networks through their myriad holdings in local Stadtwerke.
Other countries, such as Poland, are restructuring these small distributors into bigger companies by grouping together as many as 30 local distributors under one umbrella organization. Distributors are often ripe for privatization, especially in Eastern Europe, where privatizing distribution has been a way to improve cash collection and thereby improve the financial viability of the entire electricity sector. In other regions, such as in Austria, Germany, the Netherlands, Scandinavia, and Switzerland, significant municipal ownership is likely to continue in the distribution sector.
Most countries have adopted clearly published tariffs for transmission and distribution grid use. Germany, with its original approach of negotiated tariffs, was the major exception, but it has been obliged by the EU to develop a regulated tariff regime. Tariff-setting regimes vary widely in Europe, with some countries, such as France, using a standard cost-of-service regime, while others, such as Austria, Denmark, Finland, Ireland, Italy, Netherlands, Norway, Portugal, Spain, Sweden, and the UK use a more ambitious performance-based rate-making (PBR) approach that requires the grid operator to regularly improve its efficiency. Accession countries, such as Hungary, Latvia, Lithuania, Slovakia, and Slovenia, also have started to widely implement PBR regimes. Romania and Bulgaria both intend to launch PBR regimes in the near future.
While most countries in the region have sufficient transmission capacity internally, some interconnections are still insufficient between countries. There are three distinct grid regions in Europe-the UK grid region, the Scandinavian region (Nordel), and the continental European region, usually referred to by the acronym of the group that coordinates this region, UCTE (Union of Coordination of the Transmission of Electricity). UCTE incorporates all of Western Europe and is starting to link up with the countries of Eastern Europe.
Italy, the Iberian Peninsula, Greece, and the Netherlands do not have