Treas. Ministry faces predicament on how to restructure the energy sector

Analysts in the energy sector assert the Treasury Ministry will be faced with a dilemma on whether to implement the recommendations of the Energy Regulation Office (URE). The URE emphasizes in general the status quo can still help producers that have signed long-term contracts with the energy distributor Polskie Sieci Elektroenergetyczny (PSE) to make a profit, effectively finance their debts and have extra funds for much needed modernization to their plants. The reality however, in the case of a power plant such as Belchatow is that PSE buys energy from it at a price that makes it impossible for the plant to have profits despite its having the lowest cost of production in the country. The Treasury, which is in charge of restructuring the sector, is troubled on how to possibly sell off stakes in the plants like Belchatow which are loss-making despite potentially being the most economically viable. The Treasury will have to either revoke some of the long-term contracts that PSE has with the power plants or sell the stakes to potential investors at lower prices which might consequently earn the government less than they had predicted. (Prawo i Gospodarka, page 3) S.M.