Ab Ignitis. S Regulatory News (IGN)

18 Oct 2021 07:00

Regarding Networks segment income level of electricity distribution for 2022

AB “Ignitis grupė” (hereinafter – the Group) informs that, pursuant to the new wording of the Methodology for determining the price caps for electricity transmission, distribution and public supply services (hereinafter – the Methodology) (link in Lithuanian), on 15 October 2021 National Energy Regulatory Council (hereinafter – NERC) adopted the resolution on the price caps for electricity distribution services of AB “Energijos skirstymo operatorius” (hereinafter – ESO) for the following regulatory period (hereinafter – the Resolution) (link in Lithuanian).

NERC established ESO income level of electricity distribution services for 2022, comprising EUR 239.7 million, which is 8.1% lower compared to the income level set for year 2021 (EUR 260.7 million).

Income level decrease was caused by lower return on investments, resulting from application of updated weighted average cost of capital (WACC) (link) and new long-run average incremental cost (LRAIC) model application, depreciation, as well as typical correction of temporary regulatory differences. The decrease is significantly offset by a newly introduced additional tariff component, which is applied in order to maintain ESO financial capacity to perform investments set out in the 10-year investment plan (pursuant to Paragraph 14 of the Methodology).

The Group informs, that in order to evaluate the ultimate impact to the financial results and the sustainability of the activities of ESO and the Group, the Group submitted questions to NERC to specify certain aspects of the Resolution and its leading documents.

The Group will present the changes and their impact in depth during a public presentation, preliminary on 20 October 2021 at 4:30 pm Vilnius / 14:30 pm London time (date and time may vary depending on the timing of NERC response). The Group will inform about this in a separate notice through the platforms of stock exchanges.

Draft Methodology, public consultation regarding it and its potential impact to the activities of ESO was disclosed by the Group in the material event notification of 17 September 2021 (link) and potential impact of the amended Methodology was disclosed by the Group in the material event notification of 1 October 2021 (link).

For more information please contact:

Communications Artūras Ketlerius+370 620 76076arturas.ketlerius@ignitis.lt