According to Bloomberg, CEZ said that baseload power prices for small and medium sized companies and households will rise by 14.4% y/y from January 2008. The baseload power price represent around 50% of the total amount for end customers the other half include state-regulated fees, taxes, and CZK 40 flat monthly fee. The prices increase is based on trading on the Prague Energy Exchange where the priced for 2008 was fixed at EUR 50.4. Energy Regulatory Office (ERU) will announce distribution tariffs in November.
Our view:
It is expected that the final price for customers will rise by 9-10% depends on the ERU tariffs. We see the announcement as neutral for today’s trading as it is in line with our expectation.