Czech govt plans new pricing rules for CEZ -paper

PRAGUE, Dec 6 (Reuters) - Outgoing Czech Industry and Trade Minister Martin Riman wants to force state-owned power utility CEZ <CEZPsp.PR> to sell production via a commodities exchange, the newspaper Hospodarske Noviny reported on Wednesday.

The minister, in a caretaker capacity since the minority government lost a parliamentary confidence vote in October, was quoted by the business newspaper as saying that he would like CEZ to switch to the new price-setting mechanism in 2008.

"We are working out the details," the newspaper quoted Riman as saying, adding a plan might be ready by the end of the week.

Riman blamed CEZ's existing auction-based pricing system for spurring what he said had been an excessive rise in electricity prices.

"I cannot guarantee that the new system will bring about a fall in electricity prices. But the price creation will be more transparent," he was quoted as saying.

"No one will then be able to say that CEZ is artificially raising prices and creating unjustified profits," he added.

CEZ is the Czech Republic's most profitable company, with 27.3 billion crown ($1.30 billion) profit last year.

But analysts said any change in CEZ's pricing rules was unlikely to prevent power prices in the European Union member state from creeping up towards higher levels in neighbouring countries in West Europe.

"There will be a lack of generation capacity in central European region, therefore electricity prices would converge to German price levels anyway," said Jakub Zidon, analyst at Ceska Sporitelna, in a morning research note. ((Reporting by Marek Petrus; Editing by William Hardy; Reuters Messaging: rm://marek.petrus.reuters.com@reuters.net; e-mail: prague.newsroom@reuters.com or marek.petrus@reuters.com; Tel: +420 224 190 477)) ($1=21.03 Czech Crown)

Keywords: CEZ PRICES/