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2012-2015: new regulatory period for electricitydistribution and metering
January 16, 2012
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Index
The new regulatory framework
Key metrics
Closing remarks
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The new regulatory framework
verv ew
ncrease at . vs. .
RAB defined according to company-specific values, in line
199/11with previous regulatory period
Higher remuneration for new investments
Profit sharing balanced by other regulatory items
A rewarding regulatory framework to foster servicequality and customer satisfaction
21. Old regulatory framework 2008-2011
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The new regulatory frameworka n ea ures
Impact on regulated
revenues
Slight increase (2012 vs 2011)
Final figure, still to be defined1
Profit sharing
ec s a ance y o er regu a ory ems
o WACC increase
o Price cap on depreciation removal
o Deflator effect on RAB & depreciation
X-factor In line with mechanism already established in the
previous regulatory framework
31. By April the 30th, 2012
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The new regulatory frameworkar e n on or s r u on ac v es
--OldNew
Defined according to
&depreciation
company-spec c va ues
o Parametric RAB ante 2007(1)
o RAB post 2007 based on specificcompanys investments2
Defined according tosector-wide values
Opex
sector-wide values
sector-wide values
Higher transparency and predictabilityof com an s revenues
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1. Based on previous period companies revenues; parametrical depreciation path published by AEEG2. Including MV/LV substations RAB ante 20073. Including equalization mechanism effects
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Key metricsverv ew
2008-2011Old
2012-2015New
Starting RAB ~ 20.6 bn1,2~ 21.5 bn1
Base WACC3,4 7.03%7.60%
X-factor4 2.2%2.9%
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1. RAB for distribution and metering, excluding commercial activities (~0.4 bn)2. Pro-forma net of HV grid RAB3. Real pre-tax4. Weighted average of distribution and metering
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Key metricsase componen s
2012-2015New
2008-2011Old
D/E
Risk-free rate
80%
4.45%
80%
5.24%
Equity risk premium 4.00%
levered 0.60 0.67 (1)
4.00%
0.61
Debt spread
Tax shield
0.45%
33.0%
0.45%
27.5%
Tax rate
Inflation
40.0%
1.7%
35.7%
1.8%
WACC
7.60% 7.03%(2)
71. Beta levered 0.60 for distribution and 0.67 for metering2. Weighted average of distribution (7%) and metering (7.2%)3. Risk-free rate will be updated according to the usual methodology (previous 12 months 10yrs. BTP average gross yields)
- erm rev s on n ovem er
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Key metricsew nves men s
--
OldNew
Regulatory lagcompensation
+1% WACC for newinvestments No compensation
investments
depreciation
depreciation1
81. RAB of year n calculated gross of the allowed depreciation of year n
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Key metricsncen va e
BaseWACC
WACC(regulatory lag)
WACC(specific investments)
Total WACCnew
Tota l W ACC
o ld
Smart grid pilot projects 7.6% +1.0%+2.0%
For 12 years10.6% 9 %
Replacement of MV/LV transformers
Energy storage systems pilot projects
7.6%
7.6%
+1.0%
+1.0%
+1.5%
+2.0%For 12 years
10.1%
10.6%
9 %
-
w ow osses ones
Reinforcement of MV grids in cities
historical centres7.6% +1.0%
+1.5%For 12 years
10.1% 7 %
Reinforcement of transformation
stations in critical areas1
7.6% +1.0%+1.5%
For 12 years
-
10.1% 7 %
. . .
Distribution network confirmed as a strategic
91. Critical areas: areas with high concentration of generation connected at MV/LV level (14 provinces and over 600 municipalities in other provinces in Italy)
p ar or e sys em
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Key metrics- ac or an pro s ar ng
Distribution Cumulated X - factorDistribution
New OldConfirmed old X-factor:
1.9% lasting 4 yrsNew X-factor:
0.9% lasting 8 yrs2.8%
(2)
1.9%
Meterin Meterin Cumulated X - factor
Confirmed old X-factor: New X-factor:7.1%
New
5.0%
Old
. .
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Weighted average X-factor of 2.9% for the period 2012-151. Breakdown of new cumulated X-factor calculated on a pro-forma basis2. Applied to distribution-opex net of distribution commercial activities-opex
E l S A
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The new regulatory framework
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Fostering regulated cash flow as a protection vis a vis
market volatility and sovereign risks
Enhancing the strategic role of investments in
infrastructures and networks activities
Long-term visibility on RAB evolution
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This presentation may contain certain statements that are neither reportedfinancial results nor other historical information (forward-lookingstatements). These forward-looking statements are based on Enel S.p.A.s
forward-looking statements are subject to risks and uncertainties, actual futureresults may differ materially from those expressed in or implied by thesestatements due to any number of different factors, many of which are beyond
. . . ,
the regulatory environment, future market developments, fluctuations in theprice and availability of fuel and other risks. You are cautioned not to placeundue reliance on the forward-looking statements contained herein, which arema e on y as o e a e o s presen a on. ne .p. . oes no un er a eany obligation to publicly release any revisions to any forward-looking
statements to reflect events or circumstances after the date of this presentation.ursuan o ar . - , par. , o e n e nanc a c o e ruary ,
1998, the executive in charge of preparing the corporate accounting documentsat Enel, Luigi Ferraris, declares that the accounting information contained hereincorrespond to document results, books and accounting records.
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Investor Relations Team ([email protected])
Luca Torchia (Head of IR)
Pedro Caamero (Equity IR)
+39 06 83053437
+39 06 83055292
+39 06 83053437
+39 06 83055292
Elisabetta Ghezzi (Fixed income IR) +39 06 83052708+39 06 83052708
Visit our website at:
www.enel.com (Investor Relations)
Visit our website at:
www.enel.com (Investor Relations)
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