Gov't to push through electricity market changes


Hungarian Finance Minister János Veres said the government wants to change laws governing the electricity market before Parliament's summer recess.

Veres said the government expects to spend four weeks drawing up amendments and holding consultations to establish unity on the changes.

The government announced a week earlier that it would restructure Hungary's electricity market as well as the state-owned Hungarian electricity works (MVM) to encourage competition and reduce inflationary pressure.

Industry insiders have said the full deregulation of Hungary's electricity market from the start of 2008 was ill-prepared as nothing was done to reduce MVM's dominant position and prices actually increased because of the lack of appropriate regulations.

Economy Minister Csaba Kákosy said after the talks on Wednesday that the government thinks it necessary to change legislation on significant market power and amend the rules for electricity auctions.

Veres said the restructuring of MVM would be carried out in such a way as not to upset a stock exchange offering of MVM or the state-owned companies into which MVM would be split.

Central bank (MNB) governor András Simor said the changes could have an effect on prices in the mid-term. Though he warned that prices could also be affected by oil and gas price changes.

Competition office (GVH) spokesman Zoltán Nagy said it will be necessary to separate transmission system operator Mavir from MVM group, re-negotiate long-term electricity contracts without upsetting the market and free up capacity.

Hungarian energy office (MEH) head Ferenc J Horváth said the office's experts support the planned restructuring of Hungary's electricity market.

Government spokesman Dávid Daróczi said after the talks that retail electricity prices too are set to reach “no-higher- than-justified” levels in the mid-term. (MTI-Econews)

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