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A blueprint for liberalising Germany's energy sector, presented to the upper house of parliament in December by economy minister Günter Rexrodt, has been rejected. The upper house also demanded a series of improvements to the proposed legislation. Rexrodt's timing was criticised as being completely out of step with developments at European level aimed at forming an Internal Energy Market. "It is already clear that the draft law will have to be altered to comply with EU rules in further legislative procedures," said the house. The threat posed by liberalisation to public income at community level and to the lignite mining industry in east Germany were also important grounds for the decision to throw out the bill by the upper house, which represents the länder governments. One of the main criticisms came from Lower Saxony's economy minister Peter Fischer. He says the bill did not allow for the unbundling of the electricity business into generation, distribution and grid operation, and thus left intact one of the last bastions of monopoly activity in Germany. The upper house wants guaranteed protection of non-discriminatory access to the grid and of the rights of regional governments to secure their own energy supply. It also said grid construction should be preceded by a planning procedure and that power prices must be monitored by more efficient price and cartel supervisors.

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