Nuon prepared for unbundling

Jul 01, 2008 | Amsterdam Nuon organisation prepared for unbundling

From today Nuon is prepared for the unbundling of its operations into a network business with a ‘broad’ grid operator on the one hand and a production and distribution business on the other. Nuon has set up these two companies, which will operate independently within the group, in anticipation of the Unbundling Act. Until the activities are actually separated, the two companies will operate under a financial holding company, which will be responsible for issues such as consolidation and reporting.

The Unbundling Act requires all integrated Dutch power companies to separate their activities before 1 January 2011. The legislation also requires the grid operator to be a broad operator from 1 July 2008. The operator will operate and be the economic owner of the gas and electricity grids, and perform all management tasks required by these grids.

The broad grid operator within Nuon’s network business will operate for the time being under the name of Continuon, but a new name will be introduced later this year. Before the broad grid operator was established, Continuon contracted out some of its activities to other parts of Nuon. Now, however, these activities will be performed by the grid operator itself. The network business will also perform other grid-related activities, including the designing, building and managing of public lighting (Dynamicom) and complex infrastructure facilities (Tecno). Peter Molengraaf has been appointed to succeed Paul Corton as director of Continuon Netbeheer from today.

The production and distribution business will concentrate on producing, trading and distributing power and heat to large and small users and also provide additional services and technical innovation. This part of the business will operate under the Nuon brand name. From today, the two businesses will in principle no longer share any management support positions. Until the activities are actually split, results will be consolidated at the level of the n.v. Nuon financial holding, which will represent the joint interests of both businesses. The n.v. Nuon Management Board comprises Øystein Løseth and Doede Vierstra, who are also responsible for managing the production and distribution activities.

Nuon has agreed with its shareholders and supervisory board members to seek a partnership with an international production and distribution group in order to reinforce its strategic position in the European energy market. This process is expected to take at least six months to complete. Today’s organisational change means Nuon is now properly and effectively equipped to unbundle its activities and take the next step required in the development of its production and distribution business.