Published: 2018-10-29 08:58:00 CET
Lietuvos energijos gamyba, AB
Notification on material event

Regarding the Adopted Resolution on the Public Service Obligation Funds and the Setting of the Price for 2019

Lietuvos Energijos Gamyba, AB identification code 302648707, registered office placed at Elektrinės str. 21, LT-26108 Elektrėnai, Republic of Lithuania. The total number of registered ordinary shares issued by company is 648 002 629; ISIN code LT0000128571. 

The Company hereby informs that on a meeting held on 26 October 2018, the National Commission for Energy Control and Prices (hereinafter – the Commission) adopted the Resolution “Regarding the Public Service Obligation Funds and the Setting of the Price for 2019” (hereinafter – the Resolution). 

The statement of the Commission’s Electricity Department, which the Commission considered in the adoption of the Resolution, refers to the information presented in the letter of the Ministry of Energy that the public service obligation specified in clause 4 of Article 74(2) of the Law on Electricity of the Republic of Lithuania (assurance of electricity system reserves in the designated power plants, the activities of which are necessary to ensure national energy security) (hereinafter – the Service) will not be provided in 2019. 

This means that not a single electricity production facility of the Company will provide this Service (also known as the Strategic Reserve) in 2019. As established by the Resolution, the Company will return to the PSO budget the sum of return on investment earned in 2017 in excess of the permitted amount set by the Commission, which totals EUR 2 765 million. The amount to be returned corresponds to the audited reports of the regulated activity of the Company.

The Company reminds that in 2018, it has been providing the Service in the combined cycle unit; tertiary active power reserve was provided in Unit 8, while Unit 7 has been preserved.

According to the preliminary results of the auction for electric power reserve for 2019 published by the transmission system operator LITGRID AB on 8 October 2018, in 2019, the Company will use the combined cycle unit to provide the reserve service for the control of voltages in the 330 kV network and for restoring the secondary power reserve.

LITGRID AB has also informed the Commission that, in order to carry out planned Baltic power system isolated operation test in 2019, it will be necessary to further ensure the availability of Unit 7 and Unit 8 during the test and parameter check. The Commission will assess the costs of these blocks in 2020 system service budget of 2020.  

The Company is assessing the potential impact of the adopted legal act on the activities of its units and the Company’s results as well as possible solutions.


  

Valentas Neviera, Head of Communication Division, tel. +370 670 25997, e-mail. valentas.neviera@le.lt