Brussels, 18/09/2013 (Agence Europe) - On Wednesday 18 September, the European Commission opened an in-depth investigation to see whether the price paid by Portugal's electricity company, EDP, in 2007 to extend its right to use public water resources to generate electricity amounts to state aid under EU state aid rules.
In 2007, Portugal extended concessions granted to EDP for using public water resources for the generation of electricity against the payment of €759 million (of which €56 million for related taxes). This measure, which was never notified to the Commission for state aid approval, has the effect of maintaining 27 power plants accounting for 27% of Portugal's generation capacity under the control of EDP for a very long period, ending in some cases only in 2052.
Based on the information available at this stage, the Commission has doubts that EDP paid an adequate price for the concessions. This may have given EDP a selective advantage that its competitors did not have and therefore involve state aid. At this stage, the Commission doubts that such aid would be compatible with the EU internal market. Moreover, the Commission says that the long duration of the concession may have had in itself an anticompetitive effect of preventing the entry of interested competitors in the Portuguese electricity market.
On Wednesday, the Commission also requested preliminary information from other member states about the rules and practice governing the granting or extension of concessions for use of water for hydro-power generation. (OL/transl.fl)