Power suppliers have registered losses as a result of Hidroelectrica’s behavior of selling more energy on the balancing market where the price is higher, instead of the Day Ahead Market (DAM), but consumers would have suffered as well if the situation would have continued, said the president of the Competition Council, Bogdan Chiriţoiu.
Comments came after the Council announced on Monday that it had launched an investigation into a possible abuse dominant position from Hidroelectrica on the Romanian electricity generation and trading market. “Consumers have not felt the impact of this Hidroelectrica’s behavior so far, and the suppliers are those who registered losses. However, suppliers could not have taken over all the losses, some of them even had serious problems, and they would have started trying to cover these losses to consumers’ behalf”, said Chiriţoiu, quoted by Agerpres.
He added that the investigation will determine whether Hidroelectrica had, over certain periods of time, a dominant position on the market and whether it abused it. “Obviously, the goal of a company is to maximize its profit, but not to a point when it becomes illegal”, the president of the Competition Council said.
The investigation refers to the behavior of Hidroelectrica during the period 2017-2018 and may lead to recommendations for completing the regulatory framework in the market, Chiriţoiu said. In a separate intervention, Chirițoiu also spoke about the possibility that Hidroelectrica would be sanctioned with a fee worth up to 10% of the revenues of the company.
The Competition Council started the investigation suspecting that Hidroelectrica, through its market behavior, limited the amount of energy sold in some market segments (mainly on the Day Ahead Market) in order to get higher prices on the Balancing Market (PE), the press release said.
The Day Ahead Market is a component of the wholesale electricity market, the main spot electricity market in Romania, and represents the centralized platform where transactions with electricity take place for the next day (the delivery day). The DAM closing price is commonly used as the reference price for electricity.
The Balancing Market (PE) is also one of the components of the wholesale electricity market, organized by the Transmission System Operator (TSO), which has the role of balancing the real-time production-consumption balance for the purpose of maintaining safe and secure functioning of the national energy system.
The balancing market is meant to mainly meet the need for market participants to adjust their energy to the demand, and has a strong technical component. On the balancing market, the TSO buys and/or sells electricity from/to market participants with dispatchable units and/or consumption.
The price on the balancing market is generally higher than the closing price on DAM, explains the representatives of the Competition Council. “The analysis of the behavior of the Hidroelectrica is being carried out in close cooperation with ANRE and has as its starting point significant price variations”, during the period under scrutiny, writes the press release.
During the investigation, unannounced inspections were carried out at the premises of Hidroelectrica and Transelectrica, and the documents collected are analyzed by the competition authority within the specific procedures.
Transelectrica is not a part of the investigation; the inspection at the company’s headquarters was carried out because the competition authority considered that data and information relevant to the analysis could be found there, given the company responsibilities as administrator of the balancing services markets.
The unannounced inspections were authorized by the Bucharest Court of Appeal and justified by the need to obtain all the information and documents necessary to clarify the possible anticompetitive practices analyzed.