Romania: Hidroelectrica won court cases against electricity traders for force majeure clause

25. February 2015. / SEE Energy News

Bucharest Court rejected the appeal filed by Elsid Titu SA which called on force majeure clause in electricity supply contract concluded with Hidroelectrica. Elsid court ordered to pay costs in the amount of about 29,500 lei.

Elsid, energy trader and manufacturer of electrodes filed a case against Euro INSOL manager of Hidroelectrica for force majeure clause for the period August 1, 2012 – December 1, 2012, the clause which had the effect of reducing the amount of energy that Hidroelectrica delivered by a Elsid the period.

Representatives of Hidroelectrica stated that in 2012, the company has experienced the worst drought in its history, the lowest recorded Danube flows in the last 150 years. However, 2012 has recorded the lowest ever recorded Hidroelectrica production (11.8 TWh). Since the company had contracted obligations 20 TWh in that year and the market price was around 250 lei / MWh, Hidroelectrica was forced to resort to this measure to reduce losses.

At the opening of insolvency proceedings, Elsid have a fixed contract price of 103 lei / MWh, which did not even cover the cost price of 171 lei / MWh, which was much lower than the market price. The contract between Hidroelectrica and Titu Elsid generated a loss of 97 million lei between 2006-31, 2012.

11 traders have concluded that Hidroelectrica electricity supply contracts, Elsid, Alro and Electrocarbon accepted the conditions for increase the price. If Elsid price increased from 103 lei / MWh to 180 lei / MWh, energy trader has to pay retroactively the difference between the contract price and the new price negotiated.

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