EDP has been ordered to pay €72.9 million to electricity customers who have been overcharged since 2012 for payments relating to power plant subsidies.
The credits will appear in 2018 after the Directorate General of Energy and Geology notified EDP’s board to return the money after excessive profits had been made by charging customers the compensation costs for energy supply contracts that had became null when the market was liberalised.
The charges were levied in respect of complex Power Acquisition Contracts and Costs to Maintain Contractual Equilibrium (CMEC) which electricity consumers have been paying for since market deregulation.
These CMEC contracts date back to the last decade when the government somehow agreed that energy customers should compensate EDP for the cancellation of energy purchase contracts with supplier, REN, so that everyone could enter the unregulated energy market from July 1, 2007, without any ongoing supply contracts complicating matters.
Following an independent audit, a recommendation was made by the Competition Authority that at least the amount that had been scammed from customers, around €47 million, must be paid back but the final bill is far higher.
The Competition Authority also is investigating a possible breach in the competition laws.
The Secretary of State for Energy, Jorge Seguro Sanches, said that after the audit a policy of deliberately overcharging electricity customers since 2012 was confirmed and EDP had been notified that it will have to pay compensation.
EDP's new owners, including China Three Gorges which bought the government's 21.3% stake in 2011, will not be best pleased at this revelation. The Chinese had bought into EDP based on its reported returns which, as now has been proved, included money taken from customers to which the company was not entitled.
After the National Anti-Corruption Unit raid on the EDP and REN head offices on June 2nd, investigators have been looking at looking at the privatisation of EDP, the broken contract compensation payments and various dam operation contracts including at the Baixo Sabor dam, approved by the Government of José Sócrates, where the Public Ministry is investigating suspicions of bribery and corruption involved in the design of the work.
Another Anti-Corruption team is focusing on the Sines Thermal Power Plant, operated by EDP, where an anonymous complaint was received specifying that the company was granted an operating license without public tender and without having to compensate the State with any contra payments.
EDP's boss, António Mexia, earned €2.1 million last year, boosted by an extraordinary bonus of €360,000 for "leadership qualities and strategic vision."
The Government, through the Secretary of State for Energy, also has annulled the order issued by former Secretary of State for Energy, Artur Trindade, that allowed EDP to recoup its drop in income from running the Social Tariff scheme for the company's poorest customers, and the Extraordinary Contribution on the Energy Sector (EESC), a tax charged to all energy producers.
Artur Trindade, allowed EDP to charge customers for these costs which should not have been borne by consumers, but by EDP.
On leaving political office, Trinidade was handed the job of director general of the Energy Regulator (ERSE).
Comments