Czech utility CEZ AS (BAACEZ.PR) expects electricity prices to rise on a likely European-wide reduction of greenhouse gas emissions credits and as Europe 's economy stabilizes, and so is pre-selling future production only in limited quantities, the utility's head of sales said Tuesday.

"We think that power prices may go up. We're slowing forward selling and not rushing to the market. We see a positive upside to CO2 prices" that should lift power prices at a later date, Alan Svoboda said.

In the fourth quarter of last year, CEZ sold 6% of planned 2013 production for the average price of EUR53.5 per megawatt hour, and sold 5% of 2014 production on average for EUR54 per megawatt hour, Svoboda said.

In total the company has pre-sold 47% of 2013 production and 18% of 2014 generation.

The average price CEZ secured for power produced this year is EUR52.5 per megawatt hour, Svoboda said.

The European Union is debating a reduction of carbon dioxide permits due to oversupply and it is likely to be approved by the end of June when the six-month Danish presidency of the European Council ends, he said. The Danes said enacting the reduction is a priority of their presidency.

A reduction in credits on the market would push their prices higher and lift electricity prices. CEZ operates six zero-emission nuclear reactors and would profit from higher prices for carbon emissions while many competitors generating power mainly via fossil fuels would see profitability wane.

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