The president of the Romanian competition body Comsiliul Concurentei explains in an interview with Profit.ro that the abnormally high profits expected by the state-controlled power companies Hidroelectrica and Nuclearelectrica are not the results of management's performances, but the high electricity prices prompted, in his view, by the high price of the coal.

As long as Romania and other countries will still use coal to produce electricity, the price of the electricity will remain high because of the CO2 cost paid by the coal-fired power plants.

The market price will be set in line with the highest of the prices of electricity produced under different technologies - while the other companies will therefore sell at the same (maximum) price thus deriving abnormally high prices, he explained.

Among others, the competition body's president came up with the idea of using the profits derived by Hidroelectrica and Nuclearelectrica to finance end-user subsidies.

"Let's collect this extra profit and use it to support consumers who are impacted by the rise in prices," he said. Hopefully, this is possible with most of the net profit of the two companies, where the state owns some 80% stakes.

(Photo: Ed Metz/ Dreamstime)

andrei@romania-insider.com