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significant step forward in Poland. mcs
---------------------- Forwarded by Mark Schroeder/LON/ECT on 27/10/2000 12:50 --------------------------- Philip Davies 27/10/2000 11:50 To: Poland cc: Subject: Poland sets plan to end long-term power contracts. ---------------------- Forwarded by Philip Davies/LON/ECT on 27/10/2000 11:43 --------------------------- Enron Capital & Trade Resources Corp. From: djcustomclips@djinteractive.com 27/10/2000 11:07 Please respond to nobody@mail1.djnr.com To: 140569@mailman.enron.com cc: Subject: Poland: POLAND: Poland sets plan to end long-term power contracts. POLAND: Poland sets plan to end long-term power contracts. 10/27/2000 Reuters English News Service (C) Reuters Limited 2000. WARSAW, Oct 27 (Reuters) - A Polish government cabinet committee has approved a scheme that will cancel long-term power contracts with compensation and boost free trade in electricity, the government said on Friday. Around 70 percent of Polish electricity, some 105-110 terawatt hours yearly, is now sold under long-term contracts at fixed prices above market rates. Their existence has effectively blocked market competition. Under the programme, which still needs to be approved by the entire cabinet, some 30 percent of the contracts are to be replaced by a compensation scheme by the end of the year, while the entire wholesale market is to be free for trade as of 2002. The long-term energy contracts were signed with the Polish Power Grid (PSE) in the early 1990s and were used by the biggest of Poland's 36 power generators as collateral for modernisation loans received from commercial banks. An inability to end long-term supply deals has delayed the creation of a wholesale electricity market in which generators could compete for contracts wih distributors and end consumers. The government compensation scheme, which will allow for over-the-counter trade in previously contracted power, should allow the market regulator URE to free electricity prices. The compensation, estimated at some 10-15 zlotys ($2.1-$3.2) per megawatt hour, is to be paid by end users on the top of electricity bills. But the price of electricity itself is expected to decrease as generators will have to structure their prices on real supply costs. The average end-user compensation fee is forecast to remain around 10-15 zlotys in real terms until the end of 2005, and then decrease to below five zlotys or $1 per MWh by 2010. The PSE will act as the system's administrator, breaking down the revenues received from end users into supply costs and compensation to cover the difference between previously contracted electricity prices and new lower prices. Folder Name: Poland Relevance Score on Scale of 100: 97 ______________________________________________________________________ To review or revise your folder, visit http://www.djinteractive.com or contact Dow Jones Customer Service by e-mail at custom.news@bis.dowjones.com or by phone at 800-369-7466. (Outside the U.S. and Canada, call 609-452-1511 or contact your local sales representative.) ______________________________________________________________________ Copyright © 2000 Dow Jones & Company, Inc. All Rights Reserved
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