According to Milan Urban, Minister for Trade and Industry, state’s dividends from CEZ, the state owns 68% in CEZ, should be used for compensating low-income people for rising electricity prices as the Government cannot influence electricity price.
Our view:
The statement confirms that the state does not have a direct influence over electricity prices and should confirm the expectation that the wholesale electricity prices for 2007 should growth in the range of 16-18% y/y based on the virtual power plant (VPP) auction result showing a growth of 17.1% y/y against 2006 price and 18.5% against the VPP result in 2005. The wholesale electricity price auction result may be known by August 15.