Regarding Networks segment income level of electricity distribution for 2024
AB “Ignitis grupė” (hereinafter – the Group) informs that, pursuant to the Methodology for determining the price caps for electricity transmission, distribution and public supply services ( in Lithuanian), on 17 October 2023 National Energy Regulatory Council (hereinafter – NERC) adopted the resolution on the price caps for electricity distribution services of AB “Energijos skirstymo operatorius” (hereinafter – ESO) for 2024 (hereinafter – the Resolution) ( in Lithuanian).
NERC established ESO income level of electricity distribution services for 2024, comprising EUR 318,04 million, which is 19,58 % lower compared to the income level set for year 2023 (EUR 395,47 million).
Income level change was mainly caused by:
- lower electricity technological expenses, which have decreased due to lower electricity purchase prices (the purchase price has decreased 3 times, comparing to the purchase prices of 2023);
- the income level for year 2024 has also decreased due to the growth of operating costs, which reflects tendencies in the market also considering inflation and growth of wages, taking into account the additional repair costs and additional employee positions needed to carry out the repairs for year 2024;
- higher return on investment (weigthed average cost of capital, WACC), which increases as a result of consistently implemented investments into the development and renewal of the electricity distribution network in recent years and the higher weighted cost of capital.
Compared to the income level set for year 2023, the lower level of income for 2024 will not effect adjusted EBITDA, because adjusted EBITDA is determined by investments in the network and the return on investments rate set by the regulator (NERC), which has increased significantly due to the updated WACC methodology ( in Lithuanian). .
For more information please contact:
Head of Corporate Communications at Ignitis Group
Artūras Ketlerius
AB “Ignitis grupė” (hereinafter – the Group) informs that, pursuant to the Methodology for determining the price caps for electricity transmission, distribution and public supply services ( in Lithuanian), on 17 October 2023 National Energy Regulatory Council (hereinafter – NERC) adopted the resolution on the price caps for electricity distribution services of AB “Energijos skirstymo operatorius” (hereinafter – ESO) for 2024 (hereinafter – the Resolution) ( in Lithuanian).
NERC established ESO income level of electricity distribution services for 2024, comprising EUR 318,04 million, which is 19,58 % lower compared to the income level set for year 2023 (EUR 395,47 million).
Income level chage was mainly caused by:
- lower natural electricity technological expenses, which have decreased due to lower electricity purchase prices (the purchase price has decreased 3 times, comparing to the purchase prices of 2023);
- the income level for year 2024 has also decreased due to the growth of operating costs, which reflects tendencies in the market also considering inflation and growth of wages, taking into account the additional repair costs and additional employee positions needed to carry out the repairs for year 2024;
- higher return on investment (weigthed average cost of capital, WACC), which increases as a result of consistently implemented investments into the development and renewal of the electricity distribution network in recent years and the higher weighted cost of capital.
Compared to the income level set for year 2023, the lower level of income for 2024 will not effect adjusted EBITDA, because adjusted EBITDA is determined by investments in the network and the return on investments rate set by the regulator (NERC), which has increased significantly due to the updated WACC methodology ( in Lithuanian).
For more information please contact:
Head of Corporate Communications at Ignitis Group
Artūras Ketlerius
