ELCEN: Bucharest, Constanta Might Be Only Partially Supplied With Heat In ’08-’09 Winter

The Bucharest unit of RADET has debts worth 714 million lei (EUR1=RON3.6284) towards ELCEN, while RADET Constanta totals RON148 million debts towards the power producer. In addition, the delay penalties are of RON608 million and RON121 million, respectively.

ELCEN will only partially supply thermal energy to the RADET’s units if it would not recover the debts, the company announced in a press release.

"These debts cannot be erased," ELCEN commercial manager Irina Duica said in the press release.

One of the reasons leading to RADET’s debts towards ELCEN is the lack of invoice cash-ins from the population, the power producer said.

In the past winters, ELCEN managed to borrow money and buy the fuel it needed to produce the thermal power. So far, ELCEN took loans worth around EUR220 million, based on government guarantees.

The fuel acquisition costs represent around 80% of the final price on the thermal power and electricity produced by ELCEN.

ELCEN mentioned that, due to the fact that RADET’s units do not pay the debts, the company does not have the necessary funds to pay for the fuel. The situation could become critical, since ELCEN does not have anymore access to low interest state-guaranteed loans, due to the fact that these kind of loans could be considered as state aid by the European Union authorities, company’s representatives said in the press release.

In addition, "the household thermal power price is constantly under-evaluated by the country’s energy watchdog ANRE," ELCEN appreciated. This is the reason why ELCEN ended last year with a RON70 million loss, compared with a net profit of RON26 million a year before.

For 2008, ELCEN, a unit of state-owned electric power producer Termoelectrica, eyes a RON450 million loss. The company switched to a RON119.8 million loss in the first year-half, from a net profit of RON223.6 million in the similar period a year earlier.

In 2007, ELCEN, which is the largest thermal power producer in Romania, produced 6.759 billion kWh of electricity, representing 13% of the national production, and 6.662 million giga-calories, covering almost 40% of country’s thermal energy total production.

ELCEN owns seven power plants, five units in Bucharest, one in the southeastern city of Constanta and one in the central county of Mures, with a 2,008-MW total installed capacity.