Regarding non-routine inspection of AB Energijos Skirstymo Operatorius to be carried out by the National Energy Regulatory Council

AB Energijos Skirstymo Operatorius (hereinafter - the Company, ESO), code 304151376, registered office address Aguonų g. 24, Vilnius. The total number of ordinary registered shares issued by AB Energijos Skirstymo Operatorius is 894 630 333; ISIN code - LT0000130023.

On 19 September 2019, the National Energy Regulatory Council (hereinafter - the Council) made a decision on non-routine inspection of the Company’s regulated activities whereby it approved the report on non-routine inspection of regulated activities of AB Energijos Skirstymo Operatorius of 23 August 2019 drawn up by the Inspection Commission brought together by the Council, and the conclusions laid down therein.

The inspection report states that ESO failed to comply with legislative requirements in registering transmission reliability indicators, and that the ESO’s procedure governing the qualification of power outages needs to be revised.

In its decision the Council also noted that the amount received by the Company in the period of 2012-2015 as the incentive amount for the distribution reliability level will be deducted from the planned regulated income for the year 2020. The Company preliminary estimates this amount should not exceed EUR 2 million.

As a result of the inspection the Council also provides for improvement the legal provisions, regulating the reliability ratios of electricity distribution services in order to establish a control and monitoring system for these ratios.

ESO disagrees with the conclusions of the inspection report, which were drawn due to a different application of legal acts, and will consider appealing the inspection report to court in accordance with the procedure established by laws. The Company notes that it pursues clarity, legal certainty and uniform application of legislation, and calls on the Council to review together with other responsible authorities the regulatory framework related to the requirements for electricity distribution reliability and service quality, and to improve it in essence.

The Company notes that even though agreeing with the conclusions of the inspection of the Company, the Council did not impose a financial sanction on ESO, however, it may decide to do so within 6 months from the date of approval of the report. The Company cannot assess whether a potential financial sanction will have a material effect on the Company’s financial position. The Company will publish all other actions and decisions taken in accordance with the procedure prescribed by law.

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Spokesman: Tomas Kavaliauskas, ,