Announcement of PXE with Regard to Trading Hungarian Products

Print

5/19/2010

The Hungarian Energy Office („MEH“) published on its internet site on 17. May 2010 a statement that it is initiating an investigation into the cooperation between Power Exchange Central Europe, a.s. („PXE“) and EXAA Energy Exchange Austria Abwicklungsstelle für Energieprodukte AG („EXAA“). At the same time, information appeared in several publications that MEH had suspended the validity of the license PXE has for organizing trades in electrical energy. In relation to the above, PXE presents the following statement:

The claim made in regard to the suspension of the validity of the license of PXE, which would influence the ability of PXE to organize trades in electrical energy in Hungary, is in no way based on the truth. This matter does not fall under the jurisdiction of the Hungarian regulator, since PXE organizes its market trades on the basis of a license issued by the Czech Ministry of Trade and Industry and the Czech National Bank.

Thanks to the existence of European legislation, PXE does not require a license from any other country in the EU to conduct business. In spite of this fact, PXE nevertheless requested that MEH provide it with a local license to be an organizer on the spot market, a move which was made in order to demonstrate its good will and preparedness to meet obligations in relation to the further development of the Hungarian market. Unfortunately our intention has not met with a sense of understanding on the Hungarian side and, despite the fact that MEH is given 90 days to make a decision on the issuing of a license, the whole process has been protracted by the Hungarian regulator since last year.

The last step of MEH in regard to the investigation into the cooperation between PXE and EXAA is perceived by PXE as a step conducted against its activities on the Hungarian energy market and as an attempt at unfairly influencing free economic competition and as damaging the good name of the company. It is certainly no coincidence that this investigation was launched on exactly the same day that PXE, in cooperation with EXAA, introduced a new platform for the spot market in Hungary, thus significantly improving its spot trading system, which has been in operation since 6th January 2010.

PXE is striving to create a central & eastern European (CEE) electrical energy market. The individual states of the CEE region in themselves constitute relatively small markets for which it does not pay to create separate exchanges – such national institutions would not be economically self-sufficient and without the financial support of the regulator would not survive economically, while they are also not advantageous from the viewpoint of the trading participants as the signing of special contracts with individual national exchanges is administratively very demanding. Both these effects would ultimately lead to more expensive electrical energy for the end consumer.

PXE is endeavoring to offer an alternative – the creation of a supranational CEE market and the taking advantage of the size offered by such a market to spread the costs connected with trading on the exchange in such a way that the impact on the price of electrical energy for the end consumer is minimal. PXE is therefore seeking cooperation between all the exchange platforms which have an interest in cooperation. This also pertains to Hungary where PXE has offered cooperation several times, both to the company HUPX and also to the Hungarian regulator. HUPX has repeatedly refused our offer citing the reason that it has a cooperation with the Scandinavian Nordpool exchange, and only after the release of data in relation to the launch of the PXE platform did it enter into negotiations with a German-French consortium of energy exchanges.

We perceive the activity of MEH as a step which is contrary to the interests of every national regulator. These interests should entail defending the interests of the domestic market, as opposed to the interests of domestic companies, and particularly defending the interests of the domestic consumer.

Back to the list of all news »