Endesa S.a. · BME:ELE
Endesa — Investor Day (June 2006)
13 slides from Endesa's investor day presentation, Jun 9, 2006
Slide 1: Regulatory framework for non-mainland generation - Investor Relations Days Palma de Mallorca, June 2006
Regulatory framework for non-mainland generation - Investor Relations Days Palma de Mallorca, June 2006
Slide 2: The regulatory framework for non-mainland generation has been completed with the enacting of the Ministerial Orders
The regulatory framework for non-mainland generation has been completed with the enacting of the Ministerial Orders Contents Electricity Sector Law 1997 Establishes the specific character of the electricity systems in the islands and non-mainland territories Commitment to enact specific regulation R
Slide 3: The Ministerial Orders for SEIE generation have created a stable regulatory framework (1/2)
The Ministerial Orders for SEIE generation have created a stable regulatory framework (1/2) Description Investment Guaranteed coverage of: Depreciation (25 years for fossil fuel, 65 years for hydro) Financial remuneration: 10Y govt. bonds + 3% applied on net values Investment value: real value + 50%
Slide 4: The Ministerial Orders for SEIE generation have created a stable regulatory framework (2/2)
The Ministerial Orders for SEIE generation have created a stable regulatory framework (2/2) Description Fuel, logistics, emission rights Fuel: Standard heat rates for normal operation, reserve, regulation and start-up CIF price in the international market Additional cost for having to operate at hig
Slide 5: The new framework recognises the deficit accumulated since 2001
The new framework recognises the deficit accumulated since 2001 SEIE generation costs according to Ministerial Orders €, mn Investment and O&M Fuel 830 836 920 1.084 1.510 478 352 468 368 522 398 626 458 955 555 235 126 82 203 241 887* Total Deficit * Accumulated deficit, including financial costs.
Slide 6: The total amount of the SEIE deficit pending payment is €887mn
The total amount of the SEIE deficit pending payment is € 887mn SEIE deficit* €, mn 133 M€ deficit 2001-02 334 M€ deficit 2001-04 177 M€ deficit 2005 199 M€ deficit 2001-04 * Accumulated deficit, including financial costs. Provisional estimate as of Q1 2006, pending completion of audits, according t
Slide 7: This new system recognises the specific characteristics in non-mainland generation
This new system recognises the specific characteristics in non-mainland generation Description Dispatch The system operator (REE) dispatched the generation units based on economic merit order and network and environmental constraints REE determines the hourly energy cost group by group as a function
Slide 8: Settlement procedure
Settlement procedure Generation cost calculated according to the Ministerial orders and the dispatching of the System Operator CNE SPECIAL REGIME ORDINARY REGIME OMEL Σ Average price in the mainland for each category of buyer (distributors, suppliers, elligible clients) kWh b.c. x PMPD kWh b.c. x PM
Slide 9: This new regulatory framework makes value creation possible
This new regulatory framework makes value creation possible Value creation drivers Investments Efficiency on new investments relative to the standards Extension of the useful life of investments made Operating and maintenance costs O&M cost efficiencies Fuel and logistics Fuel purchasing efficiencie
Slide 10: The new regulatory framework provides an adequate profitability to a high growth activity
The new regulatory framework provides an adequate profitability to a high growth activity EBITDA non-mainland generation M€ In accordance to Tariff Royal Decrees* Under new regulation 2001 107 2002 163 2003 201 2004 103 2005 129 2005 OOMM 342 Regulated activity with annual demand growth around 7-8%
Slide 11: In summary …
In summary … The new regulations resolve the generation issues of recent years: Recognition of the deficits accumulated since 2001 Definition of a stable regulatory environment The new regulatory framework includes… coverage of all costs sufficient returns on investment providing scope for value cre
Slide 12: Disclaimer
Disclaimer This presentation contains certain “forward-looking statements” regarding anticipated financial and operating results and statistics and other future events. These statements are not guarantees of future performance and are subject to material risks, uncertainties, changes and other facto
Slide 13: Signatures
Regulatory framework for non-mainland generation - Investor Relations Days - Palma de Mallorca, June 2006 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorize