By Laurence Norman
BRUSSELS--European Union authorities are opening a probe into
the 2007 concession to Portuguese utility EDP Energias de Portugal
S.A. (EDP.LB) of public water resources, saying the price paid may
not have been "adequate."
The European Commission said that in 2007, Portugal extended
concessions to EDP for using public water for electricity
generation in return for a 759 million euro ($1 billion) payment.
Portugal didn't notify the concessions to the EU as a state aid
measure at the time.
In a statement Wednesday, the EU said its anti-trust authorities
have "doubts that EDP paid an adequate price for the
concessions."
"At this stage, the (European) Commission doubts that such aid
would be compatible with the EU internal market," the EU said.
Authorities also said they believe "the long duration" of the water
resource contracts may also restrict competition in Portugal's
electricity market.
The EU's executive arm said it is also requesting preliminary
information about the granting or extension of concessions for use
of water for hydro-power generation in other member countries.
Write to Laurence Norman at Laurence.norman@wsj.com
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