IPTO, HEDNO’s WACC set at 7% for 2018, SGCC to react

The WACC (Weighted Average Cost of Capital) for IPTO, the power grid operator, and HEDNO/DEDDIE, the Hellenic Electricity Distribution Network Operator, has been set at 7 percent for 2018, according to a decision made by RAE, the Regulatory Authority for Energy.

Electricity transmission and distribution costs for 2018 are expected to be calculated next week, based on consumption data to be presented by IPTO and HEDNO.

According to energpress sources, HEDNO tariffs are not expected to change but, on the contrary, IPTO tariffs for high and medium voltage will fall by nearly 10 percent. Household tariffs are not expected to change while mild hikes are expected for low-voltage electricity used by professionals.

IPTO had sought an 8.8 percent yield for 2018. IPTO’s turnover reached 249 million euros in 2016 and 265 million euros in 2015. Based on RAE’s latest WACC decision, the power operator’s revenues in 2018 will reach 233.959 million euros.

As for the four-year regulatory period’s three other years, RAE has decided on WACC figures of 6.9 percent in 2019, 6.5 percent in 2020 and 6.3 percent in 2021 for IPTO. The operator’s revenue figures will be greater despite these yield drops as IPTO’s asset base is expected to exceed 2 billion euros by the end of the four-year period from 1.4 billion euros at present.

As a result, IPTO’s revenue is expected to reach 252.4 million euros in 2019, 281.01 million euros in 2020 and 285.89 million euros in 2021.

IPTO’s strategic partner State Grid Corporation of China (SGCC) is expected to react against the RAE decision concerning the operator’s yield rates over the next four years. The Chinese investor had loftier expectations when it acquired a 24 percent stake in IPTO last year.