Considerable demand for CEZ-generated electricity in a public tender

A public tender was terminated yesterday, during which the interested parties had had an opportunity to choose from a total volume of 2.7 TWh of so called "yellow" electricity ( the cheapest type of electricity) which is included in the CEZ offer for the next year. This entails a broadband supply of electricity over the whole of next year (a continuous supply of unvarying electricity volume 24 hours a day, 365 days a year). A total of 16 companies applied for the public tender and their combined demand exceeded the offered volume three times. The starting price of 73.4 hellers (approx. 20 cents) per kWh was identical with the previous priority offer for distribution companies. The offer satisfied the demand of 5 participating companies, with the minimum price of sold electricity amounting to 75 hellers per kWh. Average price of the sold electricity was 76.1 hellers per kWh, which means an increase by 3.7 % in comparison with the starting price. The tender was organised in a smooth and transparent manner by the company Fin-servis, a.s, which has substantial experience gained during their activities on a commodity exchange.

The public tender was aimed at selling as yet unconsumed electricity which had been offered to the distribution companies in the first stage, and which had been purchased by all these companies with the sole exception of Severomoravska energetika. The successful entrants of the subsequently held public tender were mainly licensed dealers, but also distribution companies and authorised dealers. The successful entrants will now conclude contracts for an electricity supply. If they decide, for any (speculative) reason, to withdraw from the purchase, they lose the security they gave. According to the conditions for a public tender, each interested party was obliged to give a security of 1 million CZK for every demanded 17 520 000 kWh, with a minimum amount of 2 million CZK.

At the beginning of September CEZ offered the so called yellow electricity" (cheapest electricity) to the distribution companies. Last week CEZ launched another three new products, which were again first offered to the distribution companies. The offer includes three products: so called green electricity" - broadband electricity supplied throughout the entire year on weekdays at the price of 88 hellers (approx. 21 cents) per kWh, so called "red electricity" broadband electricity supplied on a monthly basis at an average price of 82 hellers per kWh and so called "blue electricity" - broadband electricity supplied on weekdays on a monthly basis at an average price of less than 82 hellers per kWh. The prices of all the products are considerably bellow the average cost of electricity this year, when the regulating body set the average price at 97 hellers per kWh.

The CEZ offer is preferentially targeted at distribution companies, because they are bound to supply their protected customers who cannot choose their supplier freely. These account for 70 % of the market, whose demand is to be satisfied by the cheapest supplies from the distributors. Each of the products CEZ offers has a small electricity volume as a reserve, so that the public tender could be carried out even if all the distributors exercise their right to priority choice. The main priority of CEZ is to provide a wide range of products, so that each potential client can choose.

CEZ aims to outdo its competitors in the following four areas: competitive price, reliable services (which are now taken for granted, but this will change with the first bankruptcy in this field, as was the case with banks, travel agencies or cooperative savings banks), environmentally-friendly production (all power plants operated by CEZ comply with similar ecological requirements to their western competitors) and the fact that the electricity is generated exclusively in the Czech territory and relies on Czech suppliers (coal providers, engineering companies, etc.)

CEZ sees the newly opened market as an opportunity for valorizing the relatively cheap electricity generated by its power plants. However, this will only be possible if the Czech producers have the same conditions, both on the domestic market and abroad, as the foreign producers.

CEZ will aim at making the market accessible to all potential customers, including households, as soon as possible. It will also aim to help create favorable conditions for establishing a long-term efficient and competitive power system in the Czech Republic, which would be used by domestic customers.

Ladislav Krizpress, spokesman of CEZ

4. 10. 2001