The violation took the form of arbitrary application of the installed capacity utilization factor in the calculation of the tariff for electricity produced by wind power plants. The independent regulator also refused to approve a separate tariff, which would differ from the previously approved one, for new wind turbines. These actions generally resulted in a restriction of competition in the relevant market.
An investigation into the anticompetitive actions was initiated back in 2020. It was found that in 2017, ANRE approved an increased tariff for one of the companies, applying a more favorable installed capacity utilization factor compared to other companies generating electricity from wind sources (20% versus 17%). The regulator did the same when approving tariffs in 2018 (17% vs. 25%).
Such actions led to the restriction of competition, negatively affecting at least one of its essential parameters – the selling price of electricity from renewable sources. The existence of a regulated market and regulated prices does not exclude free competition in this market, the agency believes.
“Even in conditions when the legislation provides for the obligation to purchase the entire volume of renewable electricity at regulated tariffs, competition can manifest itself through operational efficiency, the ability to attract and use investments, profitability of economic activity, as well as other non-price factors,” the Competition Council documents say.
The competition authority also clarifies that it does not encroach on the regulator’s independence and does not interfere with its decisions, but orders that the breach be corrected within three months and the status quo be restored.
“Independent decision-making does not imply unfettered freedom. Decisions of the state regulator should be based on the principles of transparency, predictability, uniform and fair application of rules to all market participants. Arbitrary decisions towards market participants, leading to a violation of competition, are unacceptable,” the agency states and reserves the right for NRATI to challenge this decision, adopted by the Competition Council at the end of May.
