Hidroelectrica SA, Romania’s state- owned hydropower generator, will cut electricity supplies to about 50 percent from Aug. 1 as a drought lowered river water levels.
Hidrolectrica, declared insolvent last month, will activate a force-majeure clause for its bilateral contracts with companies such as Alro SA (ALR), the company said in an e-mailed statement today.
The utility took similar steps last year following a prolonged drought. Its court administrator is in talks with companies buying electricity in bilateral contracts to increase the sale price and bring it closer to the market, Hidroelectrica said in the statement.
The International Monetary Fund and the European Union have asked Romania to negotiate Hidroelectrica’s contracts after the EU competition regulator started an investigation into possible state aid on selling power at below-market prices. The European Commission said on July 6 a contract between Hidroelectrica and a local unit of ArcelorMittal (MT) may have included undue state aid for the steel producer.
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