E.On to reduce gas stores to avoid EU fines
German utility E.On has promised to free up its long-term gas storage capacity to resolve European Union antitrust concerns, the European Commission said Thursday.
EU regulators said E.On AG will make a binding commitment to "a significant, structural reduction of its long-term gas capacity" to allow rivals access to key infrastructure that would help them supply natural gas to customers.
The EU's executive said it must check the deal with E.On's competitors and customers before it could become final, which would allow the EU drop its monopoly abuse investigation into the company.
E.On could be fined up to 10 percent of its yearly global revenues if it breaks the commitment — regulators are increasingly using such deals to settle antitrust cases, striking one with Microsoft Corp. on Wednesday and another with France's GDF Suez SA on Dec. 3.
The European Commission said E.On had booked almost the entire gas storage capacity at key entry points to the German gas network on a long-term basis — which it suspected was an abuse of the company's dominant position as a gas supplier to the company.
New rivals need access to storage to help them acquire customers and E.On's actions could hinder the development of competition in energy markets, regulators said.
E.On's pledge could "therefore constitute a major step towards facilitating competition in the German gas sector to the benefit of domestic and industrial gas customers," they said.
Last year, E.On also settled an EU antitrust investigation into monopoly abuse in Germany's electricity sector by promising to sell a fifth of its power generation capacity along with its extra-high voltage distribution network.