The Czech Cabinet yesterday approved a broad energy policy document, which outlines the government’s objectives in the power sector for the next 30 years. The document did not contain any major surprises or departures from previously declared policies, and its approval yesterday should have little immediate effect on CEZ’s stock.
As regards the Cabinet position paper, the policy objectives most relevant for CEZ were (i) confirmation of the existing electricity price rebalancing schedule, (ii) an endorsement of nuclear-power generation (CEZ has one nuclear plant in operation and another under construction), (iii) a commitment to decide on CEZ privatization in 2002, (iv) a proposal for the privatization of regional distributors is to be submitted to Cabinet by February 29, 2000 (the prospect of CEZ potentially acquiring distribution assets helped CEZ’s stock make large gains late in 1999), and (v) the introduction of competition in the electricity market during the 2003–2005 period (specifically, the regulated Third Party Access model, which provides access to transmission and distribution networks). As to the details of the future competitive and regulatory framework (which is important for CEZ’s long-term outlook), these will be addressed in a new energy law, which is to be approved by the end of 2001.
(Ondřej Daťka)