Gas distribution companies in the Netherlands currently have legal monopolies to supply households and small commercial establishments. These monopolies are scheduled to expire in 2004, when all customers will become eligible under the third phase of Dutch gas market liberalisation. We have been asked to evaluate the potential development of effective competition in the gas whole sale market and its impact on supply to customers made eligible under Phase III. Our work will enable DTe to anticipate potential problems, and to facilitate successful Phase III liberalisation.

We endorse many of the changes that have taken place in recent years in the Dutch gas industry. The first two phases of liberalisation have been relatively successful. Consumers have switched suppliers with greater frequency in the Netherlands than in other countries. Reforms of the Dutch gas market are proceeding faster than in many Member States, and the planned unbundling of ownership in gas supply and transport constitutes international best practise. Nevertheless, we have identified several characteristics of Phase III customers that may impede the development of effective competition in the wholesale market in the final phase of liberalisation.

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