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Tauron PE SATauron sees need for long-term approach to distribution of remuneration
Listed power utility Tauron's management board reckons a discussion on a long-term remuneration model for the electricity distribution segment is necessary, stressing that EBITDA generated in distribution upholds the group's debt capacity and its ability to carry out investments, the company's representatives told a conference.
"We are in the tariff-setting process. We expect its outcome in mid-December. In parallel, certain political proposals have emerged. A team at the Ministry of Energy is working on this, with conclusions expected in the first quarter of next year," deputy CEO Michal Orlowski told a videoconference.
"It is too early to comment on the team’s results, but we welcome the fact that distribution companies will be represented," he added.
CEO noted that this is a good opportunity to discuss the tariff mechanism.
He added that the debate should address the long-term WACC-based remuneration model for the sector, noting examples from Western Europe, such as Spain, which set longer-term targets.
"Greater transparency reduces financing risk for institutions and for us, which in turn can lower expected financing costs. A discussion on a long-term distribution remuneration model is needed and could benefit the entire market," said Orlowski.
The deputy CEO emphasized that Tauron Dystrybucja will take part in the regulatory dialogue, adding that distribution investment is essential for the energy transition.
Orlowski recalled that distribution EBITDA is crucial for the group's investment process.
"Our debt capacity is built on EBITDA from distribution. The higher it is, the more investments and transformation we can deliver," he said.
pel/ nl/ han/
