Thousands of angry Bulgarians demonstrated in 15 Bulgarian cities yesterday against high electricity prices and called for the nationalization of the assets of ČEZ and EVN of Austria. They also wanted the contracts with ČEZ and EVN to be released. The local energy minister said the higher Jan. power bills resulted from an increase in the number of days that were billed for from 28 to 38-40, due to the holidays. / CEZ Group has 67% stake in two distribution companies with combining 40% market share. CEZ also owns 100% in power generator Varna producing of about 12% electricity in Bulgaria; slightly NEGATIVE /
CEZ’s head of strategy, Pavel Cyrani, indicated that CEZ will not sign a contract for enlarging Temelin unless the state guarantees the electricity price. It is essentially impossible to build a nuclear plant when only the market price can be relied upon, he said. Negotiations with the state are only getting started, he said.
CEZ and Czech Coal (CC) are reportedly close to signing a contract that calls for CEZ to pay Kč 39 per GJ (up 20%) for coal from the Vrsany mine. After 2020 and until the Vršany mine is exhausted in 2060, the price would be linked to the ARA black-coal price. CEZ would invest 2 bln. CZK by 2016 so that the Pocerady plant met the strict emissions restrictions through about 2024, at which time CEZ would either extend its contract with CC or sell the plant to CC. (CC would have an option to buy it.) Pocerady would then be completely upgraded, or a new plant would be built. / Unveild details of the contract are in-line with previous speculation. Should be NEUTRAL for CEZ shares as it is a kind of compromise. Pocerady will likely disappear from the list of possible assets to sell.