VISION 2050 - Fluvius path to climate neutrality
Fluvius's activities
E&G Distribution - Regulated Tarification 2021-2024
13 August 2020: VREG published the 2021-2024 DSO tariff methodology E&G
basic tarification principles for tariff period 2021-2024:
Exogenous costs: budget-based annual allowed income with 'regulatory balances' budget/reality to be compensated for in subsequent tariff
periods
Endogenous costs (depreciations, opex, invested capital remuneration): incentive regulation on revenues ('revenue cap' or 'allowed income'),
based on historic sector trend:
n
Al₁ = AI
*
n-1
[1 + CPI-xx' - x'"+q] in which
=
CPI = consumer price index
q = quality factor (not yet implemented)
☐
Al allowed income
x = annual efficiency factor
x' = Fluvius merger efficiency factor – 2022: 14,4 million EUR for E and 7,1 million EUR for G (2021-2024: 73 million EUR for E; 36
million EUR for G)
☐
x" frontier shift factor (only for gas)
=
includes a RAB X WACC-based margin for shareholders with gearing [= debt/(debt+equity)] set at 60%
О
cost of equity: pre-tax at 5,44% / post-tax at 4,08%, based on CAPM with
О
risk-free rate = 0,09%
О
market risk premium at 4,81% (E & G) and equity ẞ at 0,83
fluvius.
->
cost of debt at 2,14%
RAB-based WACC at 3,50% (pre-tax)
Revaluation surpluses in RAB: remuneration to be fully phased out over 8-year period (2021-2028)
Regulatory balances for a.o. (1) exogenous costs, (2) distributed volumes, (3) inflation, (4) corporate taxes, (5) tariff changes within the year
June 2022.
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