Another part of rainbow electricity was sold through public tender

Monday November 5 saw the conclusion of the second public tender in which interested parties could choose from three other products from the CEZ rainbow electricity package offered for the next year. The following three products were sold through the tender - so called green electricity - a broadband supply of electricity over the whole year on weekdays, so called red electricity monthly broadband electricity volume supplied on all days of the particular month, and so called blue electricity monthly broadband electricity volume supplied on all weekdays of the particular month.

The participants in this tender were identical with the previous one. The interested parties included the representatives of distribution companies, licensed dealers and authorised customers, and more than half of the total offer of 1.2 TWh was sold through this tender. The as yet unsold volume of electricity will be sold through other CEZ offers or within the framework of short term contracts throughout the next year, which will account for a much larger share of total electricity sales than they did this year. 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 the commodity exchange.

The combined volume of electricity that CEZ has undertaken to supply to its Czech clients and which is guaranteed by contracts, amounts to almost 25 TWh.

At the end of the last week CEZ sent its new offer to the distribution companies. This offer consists of two new products so called orange energy" a daily constant supply of electricity provided on weekdays from 8.00 to 20.00 and so called light blue" electricity a daily supply of electricity provided on weekdays from 8.00 to 20.00 in particular months. The last new product (no.7), which will be offered before the end of the November, will be called rainbow electricity", because this product will not be provided in a block, as was the case with the previous products, but will respond flexibly to fluctuating electricity consumption.

CEZ guarantees that the average price of the combined supply of all types of offered electricity for the Czech market will be lower next year than it was this year. CEZ is cutting the prices of its products for the next year.

Next year the electricity market is going to open entirely to all producers, which is why we have prepared a new commercial strategy with brand new products. The demand for the first product offered in the first public tenderthe yellow electricity was three times as large as the offered supply, and the demand for the green electricity included in the second package was also much higher than the offered volume. The remaining two products were not so much in demand, which was, however, quite in line with our estimates. We have acquired valuable information concerning the preferences of our customers, so that we can adapt our next offer and make it more customer-tailored," said Miroslav Vrba, the Director of the CEZ Marketing Section, by way of summarising the results of the public tender.

At the beginning of October CEZ made a prior offer of these three products to the distribution companies. All of the addressed distributors accepted 100% of the offer and the combined volume of sold electricity totalled 7.6 TWh. The green electricity - broadband electricity supplied throughout the entire year on weekdays - was sold at the price of 88 hellers (approx. 21 cents) per kWh, so called red electricity" broadband electricity supplied on a monthly basis was sold at an average price of 82 hellers per kWh and so called blue electricity" - broadband electricity supplied on weekdays on a monthly basis was sold at an average price of less than 90 hellers per kWh.

A total of 16 companies entered the public tender for the first new CEZ product, so called yellow electricity", and their combined demand exceeded the offered supply three times. The put-up price was set at 73.4 hellers per kWh, which equalled the price of the previous priority offer made to the distribution companies. The demand from 5 companies was fully satisfied, the minimum price of the satisfied demand amounting to 75 hellers per kWh. The average price of the sold product was 76.1 hellers per kWh, which translates into an increase by 3.7 % compared to the put-up price. The first public tender was held with the purpose of selling the remaining electricity volume, which had not been sold in the course of the first stage of the offer. All the distribution companies responded positively to the priority offer and accepted their respective parts of the electricity volume, with the sole exception of Severomoravska energetika, whose Supervisory Board had not approved the contract.

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.

Ladislav Kriz, CEZ Press Officer

7. 11. 2001