Anti-Monopoly Committee To Fine Nine Energy Companies for Collusion

The Anti-Monopoly Committee of Ukraine finished its investigation spurred by claims from generation company Vostokenergo against the Council of the Energy Market of Ukraine. The Anti-Monopoly Committee recognized the decision of the Council members in summer 2005 as collusive and is going to fine those companies that were members of the Council in June 2005 (including Dniproenergo (DNEN: HOLD), Zakhidenergo (ZAEN: HOLD), Centrenergo (CEEN: HOLD), Dniprooblenergo (DNON: HOLD), Volynoblenergo (VOEN: SELL)). The size of the fine for each company could be from USD 10-20 ths (for those who will confess to collusion, and up to 10% of annual sales for those that deny the charge). Alexander Paraschiy: A council decision limited the work of power units fueled by light coal during June-October 2005. As we showed in our June 2006 GenCos report, this decision effectively limited work only for Vostokenergo-related units. However, fining all the ex-members of the Council looks strange: of the nine members, the key beneficiaries of this decision are only the three thermal generation companies; others just supported this decision because they were subordinated to the state National Energy Company (NC ECU) holding. We believe the size of fines will be minimal for all the companies.