December 11, 2012 / 11:46 AM / 5 years ago

UPDATE 2-EU investigates Romanian power market

* Investigate requirements for access to electricity market

* Ban on brokered deals forced traders to other markets (Adds Romanian comment)

BRUSSELS/BUCHAREST, Dec 11 (Reuters) - European Union antitrust regulators are investigating whether Romanian power exchange operator OPCOM and parent group Transelectrica have been blocking foreign traders from the local wholesale electricity market.

By requiring traders in the spot market to hold a Romanian value-added tax registration and to be set up in Romania, OPCOM may be discriminating against foreign firms, the European Commission - the EU’s executive arm - said on Tuesday.

“This business practice may increase the cost for foreign traders to do business on the power exchange and deter foreign traders from entering the Romanian electricity wholesale market, thereby reducing market liquidity and efficiency,” it said.

Romania’s government, which won a parliamentary election on Sunday, had said it wanted to promote transparency in wholesale trading after cancelling a number of contracts that state-owned producer Hidroelectrica awarded at below-market prices in recent years.

Regulator ANRE’s decision to enforce the law in September, which mandated that producers sell output through the OPCOM exchange, has ended all bilateral and brokered power contracts in the EU nation of 19 million people.

The ban on brokered deals has forced traders to look to other markets as they wait for regulators and lawmakers to figure a way to address the problems in the wholesale market stemming from the new law.

OPCOM said it was aware of the investigation and was seeking solutions “that would maintain the efficiency of trading mechanisms”. Transelectrica, a state-owned power grid operator, would not comment.

The EU competition authority can fine companies up to 10 percent of global revenue for breaching antitrust rules or force them to change their business practices. (Reporting by Foo Yun Chee and Ioana Patran; Editing by Dan Lalor)

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