SEWRC cuts CEZ Distribution regulated revenues by 33.8% (NEGATIVE)

The State Energy and Water Regulatory Commission announced its decision for the prices in the electricity sector starting 1 July this year. The regulated revenues of CEZ Distribution are reduced by 33.8%, while the volume of the forecasted electricity sales is lowered by 1.4%, which translates into BGN 98.4m lower distribution revenues compared to the previous regulatory decision from 1 January this year. The revenue cut was mainly motivated by the additional revenue, which the company has booked in the period 2008-2013 (stated in an audit report of the companies in the sector). SEWRC decided to defer the payment of this additional revenue (total of BGN 142.9m) for a period of 3 years. On the cost side, the electricity price which the company will pay for technological losses will be reduced by 64.6% compared to the January decision. The net effect from the revenue and cost cuts is negative BGN 12m. This is the 4th time within the last 15 months when the regulator reduces the revenue of the distribution companies. The cumulative effect from the last 4 decisions is BGN 158.1m lower regulated revenues.