NERC raises transmission tariffs for three Oblenergos affected by floods

The National Electricity Regulatory Commission of Ukraine voted yesterday to increase transmission tariffs for Prykarpatoblenergo (PREN: BUY), Zakarpatoblenergo (ZOEN: BUY) and Chernivtsioblenergo (CHEN: BUY) to compensate for damage they sustained from flooding. Transmission tariffs for Prykarpatoblenergo are increased by 10% for high-voltage customers and by 38.4% for low-voltage consumers; for Zakarpatoblenergo by 86.7% and 84.7%, respectively; and for Chernivtsioblenergo by 6.7% and 16.7%, respectively. New tariffs will be effective from September to December 2008. Alexander Paraschiy: As we expected, regulators allowed for Oblenergos to compensate for losses related to flood damage. Based on revised investment program data, we expect tariffs will allow the generation of additional cash flow amounting to USD 3.0 mln for Prykarpatoblenergo, USD 6.4 mln for Zakarpatoblenergo and USD 0.8 mln for Chernivtsioblenergo. We forecast these amounts will be enough to offset the companies’ losses related to the floods, thus we do not change our FY08 forecasts for these three companies. We expect that by next Thursday, the NERC will adjust tariffs for the other three affected Oblenergos: Lviv (LVON: BUY), Vinnitsya (VIEN: BUY) and Ternopil (TOEN: BUY).