“Red” from CERA to ADMIE for charges to consumers

CERA rejected the request of ADMIE, the implementing physique of the Greece-Cyprus electrical interconnection, to impose prices on shoppers in Cyprus through the building stage of the cable. The Greek regulatory authority has taken a distinct regulatory resolution.

“On the idea of the info earlier than CERA, it’s not discovered essential to amend Choice No. 22/2023 of CERA concerning the Methodology for the Readjustment of Allowed Revenues and Valuations of Regulated Interconnection Line Possession and Administration Actions”, CERA determined.

Particularly, CERA's resolution states:

“The Members of CERA Senior Administration examined all of the paperwork and proof earlier than them and, after completely learning the content material of the Implementing Physique's letter and its particular person suggestions for amending CERA Choice No. 22/2023, they assessed that:

Concerning the proposal of the Implementing Company to alter the tactic of calculating the Weighted Common Price of Capital (WACC) on the Regulated Asset Base of the venture, it’s judged that, given the dearth of historic information on the industrial operation of the interconnection line that may justify any differentiation from Income and Pricing Adjustment Methodologies of all actions regulated by CERA, as relevant within the nationwide system, that is submitted prematurely and can’t be adopted, Contemplating the excessive extra efficiency (WACC premium) already granted, inside the framework of the TEN-E Regulation , as an incentive for the mentioned venture in addition to the big enhance in capital value depth, as given by the final modification of the Cross-Border Price Sharing Settlement of the Frequent Curiosity Undertaking No.3.10.2 Interconnection Between Kofinou (CY) and Korakia, Crete (EL )(CBCA), which allow the Implementation Company to proceed with the implementation of the venture, the proposal of the Implementation Company to supply the regulatory incentive concerning the popularity of cheap efficiency and earnings and restoration through the building interval just isn’t thought-about cheap, and any prices associated to this era is not going to be acknowledged and/or recovered in any manner earlier than the beginning of the industrial operation of the venture, Concerning the proposal of the Implementing Company so as to add a provision for recognition procedures for the funding and working prices of the Proprietor and Operator of the Interconnection Line , along with the FSA and harmonization of CERA Choice No. 22/2023 with the corresponding provisions of the FSA methodology, taking into consideration the non-provision of the regulatory incentive concerning the popularity of cheap efficiency and earnings and restoration through the building interval, the suggestion to take a joint resolution between CERA and ERAEF for the forecasting of the prices through the building interval of the venture can’t be accepted, however it’s deemed cheap to take such a choice from the beginning of the industrial operation of the interconnection line onwards, References with the advice of the Implementing Company for the alignment of the regulatory management intervals, it’s thought-about acceptable and cheap to align the period of the regulatory management interval to 4 years as an alternative of 5 utilized within the nationwide system, ranging from the beginning of the industrial operation of the venture, Concerning the suggestions of the Implementing Company for extra ensures in case of non-completion or vital delay of the venture within the occasion that components come up which make it not possible to finish the event and building of the interconnection line, and that are exterior and past the management of the Proprietor of the Interconnection Line, the problem in query shall be examined individually on a case-by-case foundation and CERA's discretionary energy can’t be determined upfront and in a common manner for the circumstances that can come up sooner or later, Concerning the proposal of the Implementation Physique for figuring out the helpful lifetime of fastened property in 25 years, taking into consideration the elevated value of the full capital value of the venture, as given by the final modification of the Cross-Border Price Sharing Settlement of the Frequent Curiosity Undertaking No.3.10.2 Interconnection Between Kofinou (CY) and Korakia, Crete (EL)(CBCA) , in addition to the non-differentiation of the factual and authorized framework on which CERA Choice No. 365/2023 was taken, it’s not thought-about cheap to restrict the period of the financial lifetime of the venture from 35 to 25 years and any differentiation from Choice No. 365/2023, Concerning the proposal to make clear sure factors of the Methodology for the Adjustment of the Permitted Revenues and Valuations of the Regulated Actions of Possession and Administration of the Interconnection Line, reminiscent of the tactic of software of the extra efficiency (WACC Premium), it’s thought-about that these are clearly specified within the Methodology and don’t want any additional clarification, close to the suggestions of the Implementation Physique to amend the Methodology for the Readjustment of the Permitted Revenues and Valuations of the Regulated Actions of Possession and Administration of the Interconnection Line, to the extent that these concern adjustments within the wording or the construction of particular provisions, for the needs of harmonizing the CERA and ERAEF methodologies, it’s thought-about that the proposed variations from the nationwide Income Adjustment and Pricing Methodologies of all actions regulated by CERA, is not going to considerably have an effect on the scope of the Methodology, however, quite the opposite, could trigger confusion as in direction of the uniform software of nationwide methodologies, and due to this fact can’t be adopted by CERA.