CEZ offer for the next year is by more than 100 CZK cheaper than the price levels abroad

The CEZ Power Company prepared a new offer of high-voltage electricity supply for the wholesale market for the next year. This offer reflects the development of electricity prices on European markets and also the increasing costs of the inputs into electricity production over the preceding years, meaning that for example the prices of coal increased approx. by 25% over the past ten years, but it did not boost electricity prices, which in fact went down. The offered prices are the ceiling prices and CEZ estimates that it will be possible to reduce these in response to summary customer requirements, once CEZ is able to optimise the coverage of customer needs by means of its own production sources.

After two years, over which the prices of high-voltage electricity have fallen by approximately 13 per cent, the EU markets now reflect an upward trend in terms of electricity prices. The price of all-year-round continuous supply of diversified electricity will increase by approx. 12 per cent in comparison with the previous year, while the price of 4 off-peak electricity products will decrease by approx. 15 per cent.

The offer is very cost-effective for the customers in the Czech Republic, because it is considerably cheaper than the electricity offered by our competitors. The price reflects the growth of prices in Europe only in part (in one half, to be precise). The prices in Europe increased by approximately 25 per cent in comparison with the previous year. This means that the price of individual CEZ products is far below the prices in Germany, by 100 CZK per 1 MWh and more. The prices of electricity supplied to domestic customers are therefore lower than the prices for the foreign consumers of our electricity.

CEZ products have been increasing at half the speed typical for foreign power utilities, which further substantiates the fact that CEZ is one of the most cost-efficient electricity procurers in the European context and is perfectly capable of succeeding on foreign markets.

This wholesale offer of electricity products is not aimed at retail end customers. The price of electricity supplied to the retail end consumers is made up of a number of items, apart from the high-voltage electricity, which is why the rise in primary product costs will only increase the price of the final product by approx. 1 - 3 per cent. That is, unless the regional power utilities find and utilise their potential for savings.

CEZ believes in transparency and therefore publicises its complete price offer of individual products on its web page (www.duhovaenergie.cz, only Czech version). CEZ has so far been the only procurer in the Czech Republic to do so.

Ladislav Kriz, CEZ Press Officer

17. 9. 2003