Go back

The Court of Appeal in Warsaw dismissed the appeal of the ERO President regarding the settlement of value of annual adjustment of the stranded costs (so-called LTC compensations) for 2009 for PGE GiEK S.A. Branch Elektrociepłownia Gorzów

  • No. of the report: 32/2013
  • Report date: 25.04.2013
  • Report legal ground: Art. 56 section 1 p. 1 of Act on Public Offering – confidential information

Contents of the report

The Management Board of PGE Polska Grupa Energetyczna S.A. discloses that on April 25, 2013 the Court of Appeal in Warsaw dismissed the appeal of the President of the Energy Regulatory Office (the “ERO President”) against a judgement of the Regional Court in Warsaw – the Court of Competition and Consumer Protection (the “CCCP”) of June 19, 2012 regarding the settlement of value of annual adjustment of the stranded costs for 2009 for PGE GiEK S.A. Branch Elektrociepłownia Gorzów due as a result of the termination of long-term contracts of sale of capacity and electricity (so-called “LTC compensations”). The judgement is final and binding. However the ERO President is entitled to file a cassation appeal with the Supreme Court.

The claim value in the PGE GiEK S.A. Branch Elektrociepłownia Gorzów case, calculated as a difference between the amount of annual adjustment calculated by the company and the amount settled by the ERO President in decision, was PLN -7.7 million. The total claim value of disputes concerning LTC compensations for 2009 due to generators from the PGE Capital Group amounts to PLN 672.9 million.

Description of the case:

On July 30, 2010, the ERO President issued decisions in relation to following generators from the PGE Capital Group: 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 and annual adjustment of the cost generated in gas-fired units 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.

Until the date of this report CCCP issued 4 verdicts regarding annual adjustments of stranded costs for 2009:

- on June 4, 2012 CCCP allowed the appeal of PGE GiEK S.A. Branch ZEDO and changed President of the Energy Regulatory Office decision regarding settlement of value of annual adjustment of the stranded costs for 2009 for ZEDO

- on June 19, 2012 allowed the appeal of PGE GiEK S.A. Branch Elektrociepłownia Gorzów and changed President of the Energy Regulatory Office decision regarding settlement of value of annual adjustment of the stranded costs for 2009 for Elektrociepłownia Gorzów.

- on March 18, 2013 allowed the appeal of PGE GiEK S.A. Branch Elektrociepłownia Rzeszów and changed President of the Energy Regulatory Office decision regarding settlement of value of annual adjustment of the stranded costs for 2009 for Elektrociepłownia Rzeszów.

- on April 11, 2013 allowed the appeal of PGE GiEK S.A. Branch Elektrownia Opole and changed President of the Energy Regulatory Office decision regarding settlement of value of annual adjustment of the stranded costs for 2009 for Elektrownia Opole.

Today’s verdict is a second verdict of the Court of Appeal in cases regarding the adjustment of the stranded costs for 2009. On January 17, 2013 the Court of Appeal dismissed the appeal of the ERO President in case of settlement of value of annual adjustment of the stranded costs for 2009 for PGE GiEK S.A. Branch ZEDO.

Generators from the PGE Capital Group are in similar disputes with the ERO President regarding stranded cost compensations for 2008 and 2010. The disputes regarding LTC compensations for 2008 are at various stages of legal proceedings, while cases regarding LTC compensations for 2010 have not been subject of the court judgement 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).
gkpge_relacjeInwestorskie_site