News

Watchdog fines Hidroelectrica’s group EUR 37 million

Published

January 11, 2016

Comments

0

Share

Published:

January 11, 2016

Comments:

0

Share

The Competition Council has sanctioned Hidroelectrica SA and its ten contractual partners, mainly electricity traders, with fines of RON 165.84 million (EUR 36.57 million) for concluding irregular agreements. The ruling will help Hidroelectrica in its law suits as it shows contracts were illegal, said Remus Borza, the company’s insolvency administrator. The opponents in the cases are small firms which bought cheap power from Hidroelectrica from 2003 to 2012, and asked for damages when contracts were terminated, Borza said.

Earlier, president of the Bucharest Stock Exchange Lucian Anghel said listing of state-controlled companies improves their corporate governance, and that Hidroelectrica is awaited at the market by investors. Hidroelectrica, under insolvency, reported net profit of EUR 198.5 million for last year, from a turnover of EUR 710 million and power generation of 15.9 TWh. Earlier in the year, the company’s administrator Remus Borza said expected production is at least 18 TWh, with profit of over EUR 300 million. Net income in the previous year was EUR 220 million, from a turnover of EUR 750 million and output of 18.4 TWh. As of last June, Hidroelectrica has no accumulated debts to banks or suppliers, only current ones, Romania Journal reported. The management expects it to become officially solvent in the summer.

Within the investigation, the Competition Council had analysed the long-term contracts with electricity suppliers and eligible consumers on the wholesale market. The contracts preferentially concluded without an objective selection process and in the absence of transparent procedures provided for trading of a higher quantity of electricity than Hidroelectrica was able to produce (between 95% and 175%). Prices were lower than those on the trading platforms such as CMBC (Centralized Market of Bilateral Contracts) and DAM (Day-Ahead Market). “Substantially, the entire quantity of electricity produced by Hidroelectrica was delivered based on these long-term contracts while other market participants had no access to this source of cheap electricity. Moreover, the contracts were concluded under the conditions in which all parties involved knew information on the hydrologically increased risk, respectively on insufficient amount of electricity available. Thus, to honour its contracts, Hidroelectrica had purchased substantial quantities of electricity from competitive market at a higher price than that charged to its partners” said Bogdan Chiriţoiu, president of the council.

Hidroelectrica received about 450 requests for electricity supply from 2003 through 2012 which it was unable to meet. At the same time, the agreements also affected the company’s competitors in electricity production and trading market, the decision adds. The commission concluded Energy Holding Srl, Alpiq RomIndustries Srl, and Alpiq RomEnergie Srl had coordination to determine trading conditions. The same behavior was proved in case of Elsid SA and Electrocarbon SA.

Energy Financing Team AG, Alpiq RomIndustries Srl, Hidroelectrica SA, Alro SA, Energy Holding Srl, and Electromagnetica SA are listed with sums from EUR 2 million to EUR 16 million, while other participants had smaller turnover. Swiss trader Energy Financing Team’s penalty is EUR 16 million and Hidroelectrica’s is EUR 4.6 million.

Hidroelectrica SA, Elsid SA and Electrocarbon SA admitted their anticompetitive actions, the press release said. During the investigation, several companies and electricity traders sued the Competition Council, challenging the use of documents gathered during the unannounced inspection carried out at their premises. These actions have delayed the investigation procedure for more than one year.

Following an in-depth investigation, the European Commission has concluded in June that electricity supply contracts signed by the state-owned Romanian electricity generator Hidroelectrica SA with certain electricity traders and industrial customers did not involve state aid within the meaning of the EU rules. In particular, the analysis revealed that Hidroelectrica charged prices that were fully in line with the benchmark market price to nine customers (ArcelorMittal, Alro, Alpiq RomEnergie, Alpiq RomIndustries, EFT, Electrica, Electromagnetica, Energy Holding, Euro-PEC).

On April 21, the European Commission concluded that in the contracts between Hidroelectrica and Electrocentrale Deva SA, on the one hand, and Hidroelectrica and Termoelectrica SA, on the other, the two companies were offered an unjustified economic advantage, thus breaching EU norms.

 

Related Articles

miroslav tomasevic eps

Tomašević: I have fulfilled my task in EPS

30 March 2023 - Power company Elektroprivreda Srbije (EPS) has earned EUR 49 million from electricity exports since the beginning of the year

Romanian journalists uncover giant hybrid power plant project Serbian border

Romanian journalists uncover giant hybrid power plant project on Serbian border

30 March 2023 - A dormant wind, solar and pumped hydropower project valued at EUR 1.9 billion has been unearthed in a Romanian media report

us renewables texas coal nuclear eia

Renewables outpace coal for first time in US power production

30 March 2023 - The US power sector produced 4,090 TWh last year, and the share of renewables was 21%, the Energy Information Administration said.

Djedovic Dedovic Serbia promote energy storage renewables law

Đedović: Serbia to promote energy storage with changes to renewables law

30 March 2023 - To avoid a delay in connecting their renewable power plant, investors will need to add batteries, according to the renewables bill