Ministry of Industry and Trade, Martin Riman plans all electricity production of CEZ should be sold via commodity exchange instead of auction in 2008. Final draft of his plans should be announced in the course of this week as Riman sees current system not sufficiently transparent which leads to steep increase in electricity prices.
Currently CEZ sells almost half of its production in auction to wholesalers, while the rest is sold directly to its distribution companies for prices set in the auction process. Given the increased demand for electricity in the region and closures of generating facilities we see 16.9% y/y increase of average electricity price for 2007 as obvious and doubt that new mechanism will lead to milder increases in following years. However transparency of price setting mechanism could be somewhat improved.