EU Probes Romanian Power Company Tarrifs

The European Commission has opened in-depth investigations to assess whether the national-run hydropower producer Hidroelectrica bought or sold electricity at preferential tariffs to several electricity traders, industrial clients and electricity producers.

The county could be fined or face other penalties if it is judged that Romania breached EU rules on national aid.

The Commission wants to determine whether the country’s biggest energy producer has thus indirectly subsidised clients, either by selling them electricity at prices below market levels or by buying from them at prices above market levels.

"Indirect subsidies that reduce the normal operating costs of companies can be just as distortive of competition as outright grants," EU Competition Commissioner Joaquin Almunia said.

"We have to check whether the preferential tariffs granted by Hidroelectrica put the clients that benefited from them on a better footing than their competitors in the internal market."

Part the cases cited were supply contracts between Hidroelectrica and the steel producer ArcelorMittal, which the Commission said invoved "prices which seem to be below market levels".

Bucharest may pay for any proven wrongdoing, experts note. “If Romania has influenced any final decision [on prices] it risks an infringement procedure or even payment of a substantial fine,” economic analyst Constantin Rudnitchi said.