PM wants to reduce effect of solar power on overall prices

Prague, Feb 5 (CTK) - Prime Minister Petr Necas (Civic Democrats, ODS) said that he, together with finance and industry ministers and energy market regulator head, wants to look for ways of reducing the influence of deformed prices of electricity from renewable sources on overall electricity prices.

Necas made the statement in front of journalists Tuesday in reaction to the Energy Regulatory Office's (ERU) suspicion that its former employees might have acted illegally when setting the purchasing prices of electricity from photovoltaic plants.

Necas said he considers the matter very important and serious. He noted that his government was the first cabinet that intervened against the trend of subsidised photovoltaic electricity in 2010.

"It deserves punishment that no steps had been taken in the matter until then," Necas said.

An internal audit at the ERU, whose results were disclosed by ERU chairwoman Alena Vitaskova on Monday, showed that purchasing prices of solar electricity were not set within the bounds of the law in 2005 to 2011.

Vitaskova declined to speculate whether an individual or a group of people are responsible for the practice.

The ERU has turned to the public prosecutor's office to check the matter. It demands that proceedings be initiated against an unknown perpetrator.

Former ERU chairman Josef Firt said in his defence in the media that he and the former management of the regulator made price decisions "on the basis of perfect analyses and valid legislation".

"I think that now even an important part of journalists are beginning to grasp why, according to my deep conviction, some personnel changes, made at the ERU a year and a half ago, were correct," Necas said Tuesday.

He emphasised that the entire situation is at this moment above all a matter to be dealt with by law enforcement bodies.

"Secondly, I want to emphasise that the ERU is independent of the government, but we will discuss this matter with the industry and trade minister, with the ERU's chairwoman and with the finance minister," Necas said.

Photovoltaic power plants started to boom in the Czech Republic in 2010.

Big investors' interest in the construction of new solar sources dropped after January 2011 when the state markedly cut the guaranteed purchasing prices of electricity from newly connected large power plants whose output exceeded 100 kilowatts. The purchasing price decreased from Kc12,150 to Kc5,500 per megawatt hour then.

According to legal experts polled by CTK Tuesday, ERU employees could be criminally liable for setting the purchasing prices of solar electricity illegally, but it is not very likely that the prices could be changed retroactively.

"If ERU employees did breach their duties seriously when setting the purchasing prices of electricity from renewable sources, they can be held criminally liable. Criminal liability can also be constituted with other persons who aided and abetted in the unlawful behaviour of employees, or guided them," Ales Kubac, an expert of law firm Ambruz & Dark/Deloitte Legal, told CTK. This, however, would have to be proved by law enforcement bodies, Kubac added.

"It is probable that law enforcement bodies will reveal concrete persons or a group of persons who acted illegally when setting the purchasing prices of photovoltaic electricity, but it may take several months to untangle the case, Pavel Frana of law firm Hartmann, Jelinek Frana a partneri said.

In addition, there is not legal tool enabling to change retroactively the purchasing prices of electricity set in the past, Frana said.