Sparks fly in campaign on electricity law

The campaigning for and against liberalising the electricity market has started

Supporters and opponents of a plan to open up the Swiss electricity market have outlined their arguments ahead of a nationwide vote in September.

This content was published on June 16, 2002 minutes

If the electorate approves the proposals, industrial consumers and private households will be able to choose their power supplier once the electricity market is fully liberalised within six years.

The new law also foresees the establishment of a national network company in order to ensure third party access to all parts of the grid.

Switzerland has more than 1,200 electricity utilities. More than 55 per cent of electricity comes from hydroelectric plants, while nuclear power stations generate about 40 per cent of electricity.

More than three months before the nationwide vote, two committees this week presented their main arguments for what promises to be a highly emotive campaign.

Benefits for all

Supporters of a liberalised electricity market argued that all consumers could benefit from the new law. A group representing members of parliament from three of the four main political parties said the price of electricity would drop by about 15 per cent.

They pointed out that small and medium size businesses, which form the backbone of Switzerland's economy, as well as private households would equally benefit.

Prices would have to be brought in line with those in other European countries, which have opted for deregulation, the group added.

"The law will make the price policy transparent," says Erika Forster a senator from St Gallen. She adds that deregulation is an inevitable process and the legislation will pave the way for it to happen in a measured way.

Supporters say many European countries have fully or partially liberalised their electricity markets and that the European Union agreed on a minimum standard of deregulation by 2004.

California blackout

However, politicians from the centre-left Social Democratic Party, the Green Party as well as the trade unions have warned of the risks of liberalising the Swiss electricity market.

Pierre Vanek, a member of Geneva's cantonal parliament and campaigner against the law points to the crash of the power company, Enron, and the blackouts in California.

"We are concerned that we will have something similar in Switzerland, if the law comes into effect."

He rejects suggestions that deregulation is a natural phenomenon which cannot be opposed. Vanek says it serves financial interest groups, who are keen on full privatisation and hope to be able to operate without the supervision of democratic institutions.

Opponents also argue that unlike industrial consumers private households and small and medium size businesses would not be able to benefit from a deregulated electricity market.

Prices will even rise in the long term, and there is no way the state can interfere, opponents say. They are concerned the law will lead to a rise in the consumption of electricity instead of promoting energy saving.

Divided left

Both the government and parliament have come out in favour of a gradual opening up of the electricity market. But trade unions and a coalition of environmental and consumer groups, particularly in western Switzerland, collected enough signatures to challenge the law in nationwide referendum.

The main political parties still have to issue their recommendations for the vote on September 22. It is widely expected that the three centre-right and right wing parties will come out in favour of the law.

However, the centre-left Social Democrats appear to be divided. A strong minority of their parliamentary group is campaigning against the opening up of the electricity market and other attempts to deregulate the public service sector, including the Post Office.

by Jonathan Summerton and Urs Geiser

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