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State Aid

PR(09)52: No state aid in power contract entered into by the Municipality of Notodden

8.7.2009

The Authority has today concluded that no state aid was involved in the sale of electric power by the Municipality of Notodden to the aluminum foil producer Becromal Norway AS. The conclusion is based on examination of price statistics relating to the contracts in question.

In December 2007, the Authority opened a formal investigation procedure concerning the price level of the municipality's power sales to Becromal between 2001 to 2007, suspecting that the power might have been sold below market price and thus constitute state aid.

Parts of the power volumes sold to Becromal were bought by the municipality under special contractual arrangements as well as under certain provisions of Norwegian law allowing municipalities where power plants are located to buy power at cost (so-called concession power). In the majority of cases, the prices of concession power which the municipalities are entitled to buy are significantly lower than the market price. Thus, normally, municipalities cannot re-sell concession power at cost without granting illegal state aid to the receiver.

However, following an examination of the price statistics from the period in question, the Authority has today concluded that the price in this particular contract does not seem to differ sufficiently from the likely market price for state aid to be present.

 For further information, please contact:

Per Andreas Bjørgan
Director
Competition and State Aid Directorate
tel. (+32)(0)2 286 18 36, or

Hanne Zimmer
Senior officer
Competition and State Aid Directorate
tel. (+32)(0)2 286 18 87

 

Brussels, 8 July 2009




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