EU decision

 

The EU Commission performed an in depth investigation to the 2 supposedly ilegal measures, they are the following:

  • CMEC: a “contract for difference” scheme created after formal approval by the EU Commission by the government before I took office
  • Right given to EDP to use its hydropower plants during more 20 years, on average, against a payment to the state

It published the following decision in May 2017 that you may consult here

https://eur-lex.europa.eu/legal-content/PT/TXT/?uri=CELEX%3A32017D1592

 

CMEC

The EU Commission saw no reason to revisit the CMEC issue. In 2014, Vice President Almunia had made a written statement to the EU Parliament expressing that the EU Commission was following closely the implantation of the contracts for differences and there was no evidence of wrong doing.

 

Hydropower plants

The EU Commission first looked to why the government did a bilateral negotiation with EDP instead of launching an auction and concluded that

  • Just before I took office, EDP and the system operator had signed a contract to permit the replacement of PPA´s by the new contracts for differences
  • That contract had a special provision that has given the right to EDP not to accept the contracts for difference in case the company was not given the right to use its hydropower plants.

It then looked to the amount paid by EDP to the state and concluded the following

  • That amount had been estimated independently by 2 investment banks
  • Investment banks had used an approach accepted by markets
  • In addition, the EU Commission looked to a higher estimate produced by the system operator and concluded, first that it had not been done by an independent entity and secondly that it was technically wrong. As a matter of fact, this is the estimate prosecutors take into account!

In Confined, this matter is explained in detail.

 

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