Slovak PM raises the pressure on energy sector

Slovak PM raises the pressure on energy sector
Robert Fico forced the energy regulator to back down on energy supply price hikes.
By bne IntelliNews January 25, 2017

Slovak Prime Minister Robert Fico said on January 25 that he wants to raise the state’s influence in the management of the country’s power distribution companies.

The comments extend the pressure on energy distribution seen since the start of the year. The call comes just a day after Bratislava succeeded in forcing the country’s energy regulator URSO to back down on a move to allow distributors to raise energy supply prices for households at the start of the year, and hints that Fico may have fallen out with Czech/Slovak energy holding EPH.

Fico wants to re-examine the privatisation of distribution companies ZSE Stredoslovenska Energy and Vychodoslovenska energetika, reports The premier complains that even though the government owns a majority, it handed control over to the minority shareholders that bought into the companies 15 or so years ago.

"If someone has 51% and cannot control the company then it is a legitimate to ask the Constitutional Court if that is okay," the populist prime minister insisted. Should the government fail to secure a favourable opinion from the Slovak court it is willing to talk to international institutions, Fico added.

Germany’s RWE holds a 49% stake in Vychodoslovenska energetika, which serves the Kosice and Presov region’s in the east of the country. Stredoslovenska Energy, which serves the central Zilina and Banska Bystrica regions, is 49% held by EPH.

The Czech/Slovak energy holding also controls the country’s main gas pipeline operator SPP and is buying into Slovakia’s largest power produced Slovenska Elektrarne in a deal closely calibrated by the state. However, it now appears that Fico is ready to break his cooperation with EPH. The less friendly approach in Bratislava comes not long after the main Slovak partner in the holding - Patrick Tkac of financial group J&T – announced he is selling up to Czech partner Daniel Kretinsky.

Both of EPH’s Slovak companies have been forced to reject accusations from Fico since the start of the year that they lobbied URSO to raise regulated prices in order to boost the bottom line. URSO chairman Jozef Holjencik was forced on January 25 to sign off on government decisions to reverse the hikes that came into force for electricity in central Slovakia and for the gas system nationwide at the start of the year. The PM strongly suggested Holjencik may not survive in the post.