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State aid: Commission opens in-depth inquiries into preferential electricity tariffs granted by Romanian hydroelectricity generator Hidroelectrica to various companies

Commission Européenne - IP/12/397   25/04/2012

Autres langues disponibles: FR DE RO

European Commission - Press release

State aid: Commission opens in-depth inquiries into preferential electricity tariffs granted by Romanian hydroelectricity generator Hidroelectrica to various companies

Brussels, 25 April 2012 – The European Commission has opened five distinct in-depth investigations to assess whether the Romanian state-controlled hydropower producer Hidroelectrica S.A. purchased or sold electricity at preferential tariffs to several electricity traders, industrial clients and electricity producers, in order to favour beneficiaries by lowering their operating costs, increasing their revenues or a combination of the two, in breach of EU state aid rules. The opening of an in-depth investigation allows interested third parties to comment on the proposed measures. It does not prejudge the outcome of the investigation.

Commission Vice-President in charge of competition policy Joaquín Almunia said: "Indirect subsidies that reduce the normal operating costs of companies can be just as distortive of competition as outright grants. We have to check whether the preferential tariffs granted by Hidroelectrica put the clients that benefitted from them on a better footing than their competitors in the Internal Market".

The Commission seeks to determine whether Hidroelectrica has indirectly subsidised clients by selling them electricity at prices below market levels or by buying from them at prices above market levels. Hidroelectrica is controlled by the Romanian state, and there are indications that the State might have influenced its decisions to engage in these contracts on the given terms.

In December 2009 and December 2010, following public auctions on the Romanian wholesale electricity market OPCOM, Hidroelectrica concluded two bilateral contracts with steel producer ArcelorMittal, each for the supply of 1.75 TWh of electricity per year, at prices which seem to be below market levels.

ALRO Slatina has an ongoing long-term contract with Hidroelectrica for the delivery of 3 TWh of electricity per year at a price very close to Hidroelectrica's own production costs and subsequently indexed annually on the basis of the aluminium price quotation on the London Metal Exchange (LME).

Contracts between Hidroelectrica and eight electricity traders, some of which from 2004, and contracts between Hidroelectrica and two industrial manufacturers have been concluded at prices that appear to be lower than those prevailing on the market. Conversely, in contracts with two thermoelectricity producers, Hidroelectri-ca bought electricity at prices which seem to be higher than market prices.

All these contracts therefore seem to have substantially benefited selected companies through the provision of funds which can ultimately be ascribed to the state, whereas their competitors had to pay the market prices.

Background

Some of the contracts were concluded prior to Romania's accession to the EU. However, based on special provisions in Annex V to the Romanian Accession Treaty, the Commission is competent to investigate the electricity prices applied on the basis of these contracts.

The Commission has dealt with several state aid cases regarding indirect subsidies through preferential electricity tariffs in the past (see for example IP/09/1750, IP/07/1727 or IP/11/864).

The non-confidential version of the decisions will be made available under the case numbers SA.33451, SA.33475, SA.33581, SA.33623 and SA.33624 in the State Aid Register on the DG Competition website once any confidentiality issues have been resolved. New publications of state aid decisions on the internet and in the Official Journal are listed in the State Aid Weekly e-News.

Contacts:

Antoine Colombani (+32 2 297 45 13)

Maria Madrid Pina (+32 2 295 45 30)


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