Brussels, 27/04/2010 (Agence Europe) - On Tuesday 27 April, the European Commission authorised an aid scheme to compensate power generators for certain costs resulting from the termination of long-term power purchase agreements in Hungary. It concluded that the compensation will not exceed what is necessary to recoup the shortfall in investment costs repayment over the assets' lifetime, including a reasonable profit margin.
The Hungarian scheme seeks to compensate three power generators for the costs incurred as a result of the termination of their power purchase agreements (PPAs) which they cannot recoup (so-called “stranded costs”). The three beneficiaries are Budapesti, a subsidiary of EDF, Dunamenti, a subsidiary of GDF Suez, and Pannon, a subsidiary of Dalkia. The compensation authorised today will be deducted from the amounts of aid to be recovered from them in application of the Commission Decision of 4 June 2008, which found that the PPAs involved illegal state aid incompatible with the EU internal market (see EUROPE 9675).
The Commission concluded that the compensation scheme was in line with its Communication relating to the methodology for analysing state aid linked to stranded costs. It found that the costs taken into account for the calculation of the compensation were eligible for aid, in particular because they concern investments in assets that have become non-economical as a result of the liberalisation of the Hungarian electricity sector. Moreover, all revenues generated by the investments and aid previously received have been deducted from the cost amount taken into account for the calculation of the compensation. This ensures that there is no over-compensation, the Commission says in a press release. (O.L./transl.rt)