Report on the electricity reform


Report no. 1/2004

In spring 1999, an overwhelming majority of the parties in the Danish Folketing (Danish Parliament) agreed on a legal reform of the Danish electricity sector. This agreement resulted in the passing of the Electricity Supply Act no. 375 of 2 June. Among other things, the Act aims at implementing basic amendments to the corporate structure of the electricity sector and providing consumers with influence in the electricity sector. Similarly, the Act introduces a new form of regulating the prices of monopoly businesses.

Since adoption of the Act in 1999, the authorities have had problems fulfilling several of the intentions of the Act. Therefore, in its report, the National Audit Office of Denmark (NAOD) elucidates and evaluates whether the authorities handled the implementation of the Electricity Supply Act appropriately. As such, it was examined whether the responsible authorities ensured implementation of the new corporate structure, and whether consumers were indeed provided the influence in the electricity sector intended by the Act. Furthermore, it was examined whether the responsible authorities ensured that central elements of the basis for price regulation of the electricity sector were facilitated. In addition, it was examined whether the responsible ministers informed the Energy Policy Committee of the Danish Folketing about the problems on time.

In March 2004, a new energy compromise agreement was concluded, aimed at solving some of the previous problems in implementing the electricity reform. In conclusion, the report thus refers to the new compromise, and makes a number of recommendations, which the authorities should pay particular attention to in their further efforts to implement the electricity reform.