The Regulatory Office for Network Industries decided to curb the profits of companies in the power sector in the next two years by reducing WACC.
The power company Stredoslovenska Distribucna (SSD) disapproves of the steps taken by the Regulatory Office for Network Industries (URSO) that will curb company’s profits by reducing the weighted average cost of capital WACC. Stredoslovenska Distribucna understands that the regulator is authorized to set this value, however, it warns that this parameter should express the return on invested capital recognized by the regulator. “This parameter should be sufficient motivation for companies to carry out long-term investments in the restoration and development of the power grid,“ a spokesman for SSD Miroslav Gejdos told the portal vEnergetike.sk. The company says that the lower WACC discourages companies from investing in the power grid. “This may have a negative impact on consumers who want to connect to the grid or are exposed to planned downtimes. There are different initiatives and requests for the development of the grid (electromobility, smart grid, connection of decentralized sources) which require additional investments in technical measures. Reducing WACC is not a good signal,“ Gejdos said.
Full story in Slovak: Energetici zo Stredoslovenskej distribučnej nie sú nadšení z krokov regulátora
