Elsam, the country's largest utility, overprices electricity in Jutland and Funen, the Danish Competition Authority said on Thursday. The authority is reporting the case to the Competition Council
National radio news channel DR reported that Elsam had broken an agreement to hold down electricity prices in the western parts of Denmark, and the Competition Authority had cancelled the agreement.
'The fact that we have called the agreement off is an expression of our opinion that consumers and companies in the sector have paid too much,' said the authority's spokesman Jacob Schaumburg-Müller.
Daily newspaper Jyllands-Posten reported that Elsam stands to earn more than DKK 1 billion extra this year, since competition on the market in Jutland and the island of Funen had effectively been eliminated since May because of defective cable connections to cheap hydro power sources in Norway and Sweden.
The lack of competition has raised market prices in Jutland and Funen to double the rate in eastern Denmark.
The Competition Authority said Elsam had abused its dominant position and neglected to use the possibilities of importing cheaper electricity from abroad to keep prices down.
'We will present a complaint to the Competition Council shortly, and expect it to confirm that Elsam broke the Competition Law,' Schaumburg-Müller said.
Elsam's commercial director Leif Winum said the criticism was centred around the ten percent of electricity prices that the company was in a position to regulate.
'The entire controversy has almost no effect on the average consumer,' Winum said. 'We will continue our operations as we have.'
The Consumer Council, an independent consumer organisation, was furious at the company's reaction.
'Not reacting to competition authorities is an expression of arrogance,' Consumer Council spokesman Anders Hjorth Jensen said. 'It's a sign that the sector is still not used to delivering goods for the best and lowest prices.'