ČEZ approves deal with EC to sell one of its coal power plants

Prague, Feb 28 (CTK) - Czech power utility CEZ yesterday approved an amended version of a settlement agreement with the European Commission (EC) according to which it should sell one of its coal-fired power plants, CEZ said on its website yesterday.

CEZ is in favour of selling the Chvaletice plant. The amended agreement no longer proposes to sell the Detmarovice plant.

The agreement will take effect after it is approved by the EC. It should put an end to to the proceedings conducted against CEZ by the European Commission since 2009 over suspicion that CEZ abuses its dominant position on the Czech market.

In June last year, CEZ proposed to the EC that it would commit itself to sell one of its coal-fired plants, namely Pocerady, Chvaletice, Detmarovice or Tisova together with Melnik 3.

"All of these are power plants for which CEZ does not plan any major upgrades but rather foresees their gradual shut down as the facilities reach the end of their technical service life," the company said on its website.

Interest in Pocerady and Chvaletice has been shown by Energeticky a prumyslovy holding (EPH) and Czech Coal. The latter did not, however, extend the validity of its bid last autumn.

Bids for Detmarovice have been submitted by companies BXR, Gascontrol and EPH.

CEZ transformed all the three power plants into independent companies last year in order to make their potential sale possible.

"In view of the quality of the offers received to buy the power plants and considering the fact that CEZ is in an advanced phase of negotiations with Czech Coal on long-term coal supply to the Pocerady power plant, CEZ considers it most likely that it will fulfill the requirements of the Settlement Agreement with the European Commission by divesting the Chvaletice power plant," the company said.

CEZ does not rule out that it might also sell Detmarovice.

"As for the Detmarovice power plant, CEZ has been considering selling this asset based on the offers received even though such a transaction has no longer anything to do with the conclusion of the European Commission’s investigation," CEZ said.

According to CEZ, the settlement conditions are satisfactory for both parties. The sale of some power plants is in harmony with CEZ’ strategy to operate only fully upgraded coal-fired power plants in the future. The European Commission views it as a desirable step toward increasing competition in the market, CEZ said.