Serbia: The power trading scandal ?

30. April 2014. / News Serbia Energy

Serbia Power Utility Company EPS denied the allegations of the Anti-Corruption Council that EPS had a loss of 30 MEUR due to the difference in the electricity price.  EPS also denies it enabled the licensed traders to earn almost 49.5 MEUR. Serbia Energy reveals the full story.

“Data which the Anti-Corruption Council got from EPS are absolutely correct, what we claim also after subsequently checking of that information “, said from EPS.

In EPS argue that the differences in data on the electricity amount are caused by the incorrect data interpretation provided by EPS, Elektromreze Srbije and Customs Administration, because the data does not refer to the same concepts, that is why data on imports and exports are quite different.

“It is not possible to make an accurate analysis by direct comparison of these figures and because the report of the Anti-corruption Council is not true”, writes in EPS statement.

The Anti-Corruption Council announced earlier today that it has found large differences in the electricity amount that EPS imported and exported since 2010th until 2012th, and also that EPS achieved less income for 30 MEUR in this period due to the great difference in the price of imported and exported electricity.

In addition to these findings, the Council noted that the difference in the electricity price, at which EPS traded in the same period, allowed the revenue of 49,436,019.80 EUR to the licensed traders in the Serbia market.

In EPS explain that this public company since 2010th until 2012th had an obligation to supply all customers in Serbia by electricity and to deliver electricity under long-term contracts (with EP Montenegro).

“Energy consummation in Serbia is significantly higher during the heating season and exceeds production capacity of EPS power plants. Then EPS has to buy energy”, add in EPS.

In the statement also writes that production capacities have surpluses compared to consumption before the heating season begins, so that the electricity must be sold on the market or water in hydropower plants would overflow. The electricity price on the market is based on supply and demand during the heating season, the price is much higher out the heating season, and because of these circumstances, as it was indicated, EPS is in the position to have to buy electricity when energy is more expensive on the market and to sell it when it is less expensive.

“EPS was buying electricity on the market in accordance with the Law on Public Procurement, which was confirmed during the inspection of the State Audit Institution in 2011th and 2012th. Applying the Law on Public Procurement, the only criteria for bidders’ selection is the minimum electricity price when EPS purchased electricity “, said in the EPS statement.

“The notion that the EPS generated less revenue of around 30 MEUR due to the difference in price is not relevant or accurate, because the difference in price is not achieved when buying and selling in the same market periods”, claim in EPS.

In the statement also wrote that the position of the Council, that the difference in price at which EPS traded, allowed licensed retailers revenue of 49,436,019.80 EUR – “is not accurate, because did not EPS enable the difference in price, but the electricity market”.

“The fact is that traders were selling to EPS when it had shortages and when the price was higher, and then were buying from EPS when it had surpluses and when the market price was less”, it was specified in the statement.

The financial loss for the period since 2010th until 2012th , according the EPS, occurred due to the fact that the EPS manufacturing sector cannot meet the needs for electricity in Serbia during the heating season, and not because of business decisions to buy and sell energy, repeated in this public company.

In EPS argue that the differences in data on the electricity amount are caused by the incorrect data interpretation provided by EPS, Elektromreze Srbije and Customs Directorate, because the data does not refer to the same concepts, that is why data on imports and exports are quite different.

EPS indicates that the Council statement that EPS and EMS data differ as a result that EMS data contain, in addition to data on cross-border imports and exports, also data on the amounts which PE EPS imported and exported under long-term contracts for business technical cooperation with the Power Utility Companies of Montenegro and Republika Srpska which do not have commercial, but a technical character.

The Anti-Corruption Council states that the data discrepancy was revealed with the electricity trade analysis, and after receiving citizens’ complaint in which it was pointed to irregularities in electricity supply in Serbia.

In the report of the electricity sale, which was sent to Government of Serbia, according to data analysis obtained from the Serbia Power Utility Company (EPS), Elektromreze Srbije and Customs Administration, large differences in the electricity amount that EPS imported and exported in the period from 2010th until 2012th were observed, although these data should be identical according to the instruction of the Ministry of Finance on 6th August 2009th.

In addition to the multiple differences in quantities, the Council noted the wide gap between the prices of imported and exported electricity, why EPS since 2010th until 2012th had less income for 30MEUR, while others licensed retailers in electricity generated revenues of 49.4MEUR.

The Council received information from the Tax Administration that the licensed traders in electricity in this period returned VAT in the amount of 107, 7 MEUR, in the legal deadline, regardless of whether these traders settled their tax obligations to the budget or not.

“Tax administration is not able to check the electricity amount on the invoices of licensed retailers, as well as their values ​​based on the quantity, so remain doubts that no one does control, what creates the potential for abuse, given that relevant institutions have completely different data on the expressed amount of electricity that runs on the Serbian market”, according to a statement of the Anti –Corruption Council.

Source; Serbia Energy

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