NMa: Nuon Does Not Have to Auction Electricity

The Netherlands Competition Authority (NMa) has decided that Nuon's obligation to hold a number of auctions periodically for 900 MW electricity generation capacity will no longer apply as of 1 January 2006. A condition for this is that Nuon definitively transfers the 800 MW capacity of the Intergen power station in its entirety to Eneco in 2005. The total quantity of available electricity generationi capacity in the Netherlands amounts to approximately 20,000 MW.

In 2003 NMa compelled Nuon to organise a periodic auction of the 900 MW capacity, as a condition for granting a licence for the takeover of Reliant Energy Europe B.V. by Nuon. Without this condition, electricity prices in the Netherlands could increase considerably due to the takeover, according to NMa's analysis. Due to the proposed transfer of 800 MW of capacity to Eneco, NMa agreed in 2004 to limit the auction for the supply of capacity in 2005 to 200 MW.

After extensive research, NMa has concluded that the obligation to organise auctions may cease to apply entirely from 2006 onwards. NMa's analysis has shown that the transfer to Eneco offers an adequate solution to the competition concerns which could arise due to the takeover of Reliant. In this regard, NMa also gave consideration to other developments in the market, such as the increase in production capacity of small players and an increase in import capacity. An auction of capacity, in addition to the proposed transfer, is therefore no longer necessary to remove the reported competition concerns. The strengthening of the relatively limited position which Eneco has in the area of electricity generation will not result in new competition concerns.

Nuon is active, for instance, in the area of the transmission, trade and the supply of energy (electricity, gas and heating) and in the area of electricity generation.