"Alro" claims it is not reselling the energy of "Hidroelectrica"

The management of "Alro" SA claims that the energy it is buying directly from "Hidroelectrica" only covers 75% of its needs and that it does not resell this energy to other suppliers. The officials of "Alro" stated the following in a press release: "In April 2010, Alro and Hidroelectrica signed an addendum, to extend until 2018 the contract by which "Hidroelectrica" would supply 3TWh of electricity to "Alro". The contract provides 75% of the energy that Alro needs, whereas the rest has been bought from the OPCOM (ed. note: the operator of the Romanian energy market). The entire quantity of energy supplied by Hidroelectrica to Alro, as part of this agreement, is used exclusively by Alro and its subsidiaries for the production and day-to-day operations of the group in Romania, namely the production of aluminum oxide, primary aluminum and high added value products of processed aluminum. Alro does not resell any of the energy acquired from Hidroelectrica to third parties".

The heads of "Alro" also said that "Hidroelectrica" will supply the company with the same volume of energy as the one stipulated in the contract which was in effect in April, when the appendix was signed. The contract in question was bought by "Alro" from "Energy Holding", in 2005, following a trade negotiation. The acquisition of the contract from "Energy Holding" was necessary at the time, because all the previous attempts to conclude a contract with Hidroelectrica directly had failed.

For the additional contract extension, "Alro" and "Hidroelectrica" agreed on a formula for determining the price of the electricity which took into account several factors, including the price of aluminum on the Metals London Exchange, which is a common practice in the global aluminum industry. As a result, the price that Alro pays for hydroelectric energy has increased by 25%.

"Alro" Slatina is the largest consumer of electricity in Romania, with up to 7% of the national electricity consumption. Electricity accounts for 35% of the total production costs, and 60% of the total cost, if aluminum oxide is not taken into account. The company consumes electricity around the clock, which leads to cost reductions for energy makers.