Intention of CEZ Distribution Bulgaria for submitting a price application to the KEVR

Pursuant to Article 36a, Para.1 of the Energy Act and Article 46 of the Ordinance № 1 from 14th of March 2017 on the regulation of the electricity energy prices, CEZ Razpredelenie Bulgaria AD announces its intention to submit not later than 31st of March 2018 to the Energy and Water Regulatory Commission a Price Application for the amendment of the prices for “Electrical power distribution” for the first price year of the fifth regulatory period, as of 01.07.2018.

The Price Application for approval of the prices for access to the distribution system and transmission through the distribution system shall be prepared in compliance with the Energy Act, Ordinance № 1 from 14th of March 2017 on the regulation of the electricity energy prices and the Electricity Trading Rules.

The Company’s Price Application aims to ensure security of supply and quality service to its customers, to reduce technological losses and provide the necessary funds for development and extension of the grid. For the first price year the Company plans to transmit to the end customers 9 385 737 MWh electricity through its distribution grid. In compliance with the regulation methods approved for the distribution companies in the Ordinance №1 and Article 31, Para. 2 of the Energy Act, at the beginning of the regulatory period CEZ Razpredelenie Bulgaria AD will apply for approval of the inherent operative expenses related to the licensed activity performance for the price period July 2018-June 2019, as well as a reasonable market based return. In its application CEZ Razpredelenie Bulgaria AD will reflect the actual level of the technological losses achived in 2017 at 10.35%, the actual balancing costs, as well as the planned gross investments for the whole fifth regulatory period in the amount exceeding BGN 278 mln.

In case there are amendments in the regulatory framework or in the requirements of the EWRC, they will be reflected by the Company by the expiration of the deadline for submition the application.

February 2018