Contents of the report
The Management Board of PGE Polska Grupa Energetyczna S.A. (“PGE”) informs that on March 12, 2012 the Court of Appeal in Warsaw repealed the verdict of the Court of Competition and Consumer Protection (“CCCP”) in the case regarding the settlement of value of annual adjustment of the stranded costs (so-called LTC compensations) for 2008 for ZEDO and remitted the case for re-examination by the CCCP. Decision was taken as a result of examination of the appeal of the President of Energy Regulatory Office (“ERO President”) to the verdict of CCCP of May 26, 2010. The claim value in the ZEDO case for 2008 is PLN 42.4 million.
The above decision does not affect the adjustment of LTC compensation settlements in amount of approximately PLN 1 billion, lowering the consolidated financial results of PGE Capital Group for 2011, about which PGE informed in the current report no 9/2012 dated March 8, 2012.
Description of the case:
On July 31, 2009, the ERO President issued six decisions in relation to some generators from the PGE Capital Group, i.e. PGE Elektrownia Opole S.A., PGE Elektrownia Turów S.A., PGE Zespół Elektrowni Dolna Odra S.A., PGE Elektrociepłownia Rzeszów S.A., PGE Elektrociepłownia Lublin – Wrotków Sp. z o.o., PGE Elektrociepłownia Gorzów S.A., concerning the annual adjustment of stranded costs due under the Act of June 29, 2007 on the principles of compensating for generators’ costs arising in connection with the early termination of long-term contracts for the sale of capacity and electricity (Dz. U. of 2007 No. 130, Item 905, as amended). Pursuant to the decisions mentioned, the above companies were obliged to return amounts indicated in the decisions to Zarządca Rozliczeń S.A. or were given lower adjustments than expected. The companies from the PGE Capital Group appealed against the decisions of the ERO President to the CCCP. On May 26, 2010 the CCCP changed decisions of the ERO President in accordance with the appeals filed by the generators from the PGE Capital Group. The ERO President appealed against those judgements.
Until the date of this report, the Court of Appeal issued following verdicts in cases regarding the settlement of value of annual adjustment of the stranded costs for 2008:
- dismissal of the appeal by the ERO President in case of Elektrociepłownia Rzeszów on February 2, 2012 (current report no 3/2012 dated February 2, 2012);
- allowance of the appeal by the ERO President in case of Elektrociepłownia Lublin-Wrotków on March 7, 2012 (current report no 9/2012 dated March 8, 2012).
Generators from the PGE Capital Group are in similar disputes with the ERO President regarding stranded cost compensations for 2009 and 2010. These cases have not been settled yet.
Legal ground: Art. 56 section 1 point 1 of the Act on public offering, conditions governing the introduction of financial instruments to organised trading, and public companies (Dziennik Ustaw 2009 no 185, item 1439, as amended).