Romania’s nuclear power producer Nuclearelectrica will see its profits shrinking six times in 2019 compared to 2018 as an effect of the Government's decision to reinstate regulated prices on the electricity market for household consumers, local Hotnews.ro reported.

The energy market regulator ANRE has decided that Nuclearelectrica and hydropower producer Hidroelectrica should sell their output on the regulated market at prices 5% above the “justified costs.”

Hidroelectrica claims that such regulations “breach the Constitution, are illegal and are against several European Directives.” The company's representatives also claim that the state stands to lose between RON 700 million and RON 1.2 billion (EUR 150-250 mln) worth of dividends from this company alone, as profits will go down, Hotnews.ro informed.

At the same time, electricity prices on the competitive market will grow, and industrial consumers will have higher costs, resulting in higher prices for their products, Hidroelectrica representatives explained, according to Economica.net.

Earlier this week, ANRE published the methodology under which the power producers are compelled to deliver electricity to residential users at prices equal to their production cost plus a reasonable 5% profit margin. The methodology was issued in line with the emergency ordinance 114/2018 and is valid for a given period of three years.

The two power companies Nuclearelectrica and Hidroelectrica are no longer compelled to deliver 65% of their output to the residential market, but given their combined 50% share in the total national production and their moderate production cost, they are expected to make a significant contribution.

editor@romania-insider.com

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