Plans for power companies to spin off distribution grids have been postponed by the Dutch government with companies now granted a one year extension to the beginning of 2008.

Senior figures in the government have suggested that the earlier deadline did not give companies sufficient time to comply with the ruling that goes beyond the requirements for a competitive energy market as stipulated by the EU.

In March the government approved a draft law forcing power utilities to part with transmission and distribution assets. The full bill is expected to be signed into law by the end of the year. The grid network is largely owned by municipalities and other local authorities. State-owned power grid operator TenneT would become the manager of the country’s entire high-voltage network as a result of the move. The group already holds around 40% of the high-voltage network and is reportedly prepared to offer utilities €2.5 billion for the remaining stake, in line with the government which wants to keep the grids in public hands.