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Gov’t to change electricity market regulations

The aim of planned changes to Hungary’s electricity market regulations as well as a restructuring at the state-owned Hungarian Electricity Works (MVM) is to ensure that electricity prices do not create inflationary pressure in 2008 or the years to follow, Finance Minister János Veres said on Wednesday.

Answering a question, Veres said there were a number of “sophisticated” solutions for the restructuring at MVM, but he declined to offer any details. The plans do not involve the loss of any assets, he said, answering another question. The “first round” of decisions on the issue will be made within 40 days, Veres said, adding that MVM’s board will meet next week to decide on calling a shareholders meeting. At the same time, the government will examine how to change electricity market regulations to reduce MVM’s control of the market and create an environment which helps increase supply. Veres said studies showing MVM continued to enjoy a monopoly on the market even after it was entirely deregulated from the start of 2008 have been posted on the internet.

Government spokesman David Daróczi said Tuesday Prime Minister Ferenc Gyurcsány instructed Veres to take steps to change the structure and staff of MVM, and also make changes to market regulations in the interest of breaking the company’s monopoly on the market. Industry insiders have said the full deregulation of Hungary’s electricity market was ill-prepared as it did not help competition with MVM’s dominant role intact, and prices actually increased because of the lack of appropriately prepared regulations. (MTI-Econews)