Severoceska energetika (SCE) will remain in the CEZ Group

Today´s decision of the Office of Fair Trading changes the decision of March 18 2003, which ordered CEZ, apart from other things, to sell a majority share in one of five distribution companies from the CEZ Group. CEZ had already decided that the possibly sold company would be Severoceska energetika (SCE), where CEZ owns 56.93%. "We are glad, that the Office answered our arguments and changed its previous decision, so that Severoceska energetika will remain in the CEZ Group," commented on the statement Martin Roman, CEO and the Chairman of the Board of Directors. "The precedent decision was issued in the time, when the Czech electro-power industry was in the first phase of its deregulation and market liberalization. It was not clear then, if the liberal competition mechanisms would become a sufficient substitution for the full regulation of the industry,? added Martin Roman.

The Office conditioned this decision by an obligation of CEZ to allow access to its electricity production capacity of total 400 MW for independent subjects in 2006 to 2007. The total amount of "virtual power plant", which is being offered, is assessed at 400 MW, respectively 240 MW in summer months (June, July and August). The virtual power plant will be offered in an auction with tickets in the amount of 50 MW, res. 30 MW in summer months. The price for the offered production capacity will result from the auction, whereas CEZ is in authority to fix a minimal cost put-up. A price for produced energy will be a part of the auction conditions and will be assessed upon real costs, especially for basic and peak energy.

As of January 31, 2006 and January 31 2007 CEZ will submit a report about performance of this obligation to the UOHS.

CEZ has asked for a change of the decision of the chairman of the Office ref. no. R 77/2002 from 18 March, 2003, pursuant to Article III paragraph 5 of the first part of the Act no. 340/2004 Sb. By this resolution the office conceded a joint of CEZ and REAS (regional electricity distributors), and stipulated requirements, which should ensure maintenance of an effective economic competition. It ordered to sell a share in CEPS, sell all minority shares in REAS, i.e. in JCE, JME and PRE, and also sell one of five REAS where CEZ has majority equity stakes.

CEZ has already fully satisfied the requirements that consist in the sale of a share in CEPS and a sale of minority shares in JCE, JME and PRE: the share in CEPS has been sold to the Czech Republic, which ensures that the decision making process of the market operator is absolutely independent not only of CEZ, but of any other power subject. The shares in JME and JCE have been sold to their majority owner E.on. The share in PRE has been successfully sold to the financial investor J&T.

Eva Novakova, Press Officer, CEZ, a.s.

14. 3. 2005