Informations

HEO statement on the requests for price increases made by the electricity universal service providers

2009.06.18



According to Act LXXXVI/2007 on Electricity, universal service providers have to inform the Hungarian Energy Office (HEO) of their intention to change universal service prices and submit the proposed prices to the HEO for its approval 45 days before they go into effect. The HEO has 30 days to decide whether or not to approve the proposed prices. The HEO has to make its decision in such a way that it provides cover for the benchmark price and (annual) average HUF 1.9/kWh margin specified in Ministry of Transport, Telecommunications and Energy Decree 44/2008 (31/12). The benchmark price includes two components:
– the market-based purchase price, which the decree sets at HUF 15.6/kWh
   (this can be altered by a change in the gas prices for booked capacities greater than 500 m3/h);
– feed-in purchases, which change monthly as a function of the prices and energy mix share of
   cogenerated electricity (CHP) and electricity generated with renewable energy.

The requests of the four universal service providers submitted in May 2009 included universal service price (“energy fee,” i.e., the price of electricity as a product without grid access, taxes and tax items) increases that vary according to the consumer structure (between 5.95% and 15.47%). Price increases are justified by quantitative changes and price changes in feed-in purchases. (Changes in feed-in purchases are caused by the protracted effect of the 2008 gas price hikes, the 2009 expansion of the feed-in group, and the increase in the share of feed-in purchases following the fall in energy consumption caused by the economic crisis.) The expected October reduction in gas prices was taken into consideration to various degrees in the universal service providers’ proposals.

The HEO has estimated that the amount of the October price reduction will be greater than what the USPs used in their calculations. Recalculating the proposed prices in accordance with this, the amount by which the energy fee is being increased, which the HEO had considered justified, was reduced to between 1.6% and 10.9%. This will increase the full end-user net (excluding VAT) prices (which include the “energy fee,” grid access, and tax items) by 0.9–6.4%, while the gross prices will go up 5.1–10.8% (in accordance with the increase in the VAT rate). The following table contains more detailed figures.

	“Energy fee” increases requested by the universal service providers		“Energy fee” increases justified on the basis of the HEO’s calculations		Effect of the fee increase considered justified by the HEO on the full end-user price
	Date	Amount	%	HUF/kWh	Without VAT rate change	With a 5% VAT increase
DÉMÁSZ	July 1	9.78%	4.6%	0.90	2.7%	6.9%
E.ON	July 1	11.85%	7.4%	1.44	4.3%	8.6%
ELMŰ	August 1	5.95%	1.6%	0.31	0.9%	5.1%
ÉMÁSZ	August 1	15.47%	10.9%	2.13	6.4%	10.8%

Budapest, June 18, 2009