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Large electricity distribution company PNEM has announced it will no longer be collecting the Dutch utility sector's long standing environmental levy from customers. The proceeds of the Milieu Actie Plan (MAP) levy, until now collected by all distributors, are used to pay for energy efficiency and sustainable energy development, with wind a prime candidate.

Both the Dutch government and other distribution companies, particularly REMI in Utrecht, EDON in the north and Delta in Zeeland, have reacted strongly against PNEM's renegade action. They fear PNEM will now attract some of their customers with lower energy prices. The size of the levy differs for each distribution company. In the PNEM area it came to NLG 0.61 per cubic meter of gas and NLG 0.26/kWh.

Environmental affairs minister Hans Wijers is none too pleased at the turn of events either. In a first reaction he said he expects the distribution companies to continue with their environmental action plans. According to his energy White Paper, energy efficiency must be improved by 33% between now and 2020. This goal would not seem to be within reach without fiscal instruments such as MAP.

According to PNEM's Ruud Kool, the utility chose to dispense with the levy because it can achieve its MAP targets without further income. Between 1991 and 1995 the company collected NLG 111 million for environment measures, of which NLG 85 million has been spent. "We are on schedule with our reduction of carbon dioxide," says Kool. "Combined heat and power output pays for itself. We don't need MAP for that anymore." Kool points out that the proceeds of a separate ecotax on energy is used to stimulate domestic energy savings and that sales of "green electricity" at a premium price are also bringing in extra income. So far PNEM has 3500 household customers and one company signed up for its clean power.

Meantime distribution companies like REMI and Delta say that to reach their environment targets they need to continue with the levy. Other distributors like Eneco, serving the Rotterdam and The Hague region, are discussing following PNEM's lead and abolishing the levy. NUON, too, has said the levy could be withdrawn in two years.

EnergieNed, the umbrella organisation for the electricity distribution companies, is floundering in the market confusion caused by PNEM's decision. Currently it declines to comment on the situation.