Full of Energy - Energie AG Oberösterreich

ANNUAL REPORT2007/2008THE GROUPGROUP MANAGEMENT REPORTTHE ENERGY SEGMENTTHE WASTE MANAGEMENT SEGMENTTHE WATER SEGMENTCONSOLIDATED FINANCIAL STATEMENTS48NATURAL-GAS TRANSPORTS* ) IN MILL. m 32,5002,0001,5001,0005002005/20062,2311,9412006/20072007/20082,256* ) Quantities for the full year delivered to end consumers andregional network operators in Upper Austria by OÖ. FerngasAG which was consolidated as of 01/07/2008All gas-technology plants are checked and serviced onan ongoing basis according to the respective stand -ards and regulations, and any necessary additionalsafety checks are performed in order to ensure thehigh level of security and quality of supplies.With the 2008 Ordinance on Tariffs for the Use of GasSystems, incentive-based regulation was introducedfor gas network operators as of 01 February 2008. Theregulatory period amounts to two times five years.Negotiations were conducted with the Energy ControlCommission about Network Level 1, and the ex -pansion of long-distance pipelines was then decidedand authorized in keeping with the proposals in thelong-term plan of 2007. With regard to the investmentfactor for the expansion projects of NetworkLevels 2 and 3, intensive talks are being held with theregulating authority. With the entry into force of thenew tariff ordinance, the remuneration for using thenetwork will be slightly increased for customers inNetwork Level 2 of the Upper Austrian network section.They will be lowered for Network Level 3.The Energy Control Commission approved the longtermplan for 2008 with its decree of 02 September2008. The Regulation Zone leader proposed a numberof expansion projects in order to be able to securethe supply of natural gas also for the future. In connectionwith the proposals for the expansion of thehigh-pressure natural-gas pipelines, which were preparedin the course of the feasibility study for 2007,the necessary agreements for the expansion of thepipeline network were signed by the market participantsinvolved.Erdgas Oberösterreich GmbH & CO KG (erdgas oö.)is a 100% subsidiary of OÖ Ferngas AG. It specializesin offering natural gas to customers among households,commerce, municipalities and public institutions.At the end of the business year, erdgas oö. suppliednatural gas to 62,400 customers. In this context, itwas possible to slightly expand the increase over theprevious year. The market share among new constructionsamounts to about 30%.The company was able to use the opportunities offeredby the liberalization of the natural-gas market. It nowalso supplies customers outside the original supplyarea. At the same time, it succeeded in keeping about99% of its own customers. This underlines how wellthe offered products and services are accepted. It waspossible to achieve a positive balance of transfers ofabout 1.4 million m³.During the 2007/2008 business year, the quantitiessold amounted to 202 million m³, which correspondsto a standard year, with average winter temperatures.As compared to the year before, the quantities soldwent up by 28%, which is due to the mild winter ofthe year before (2006/2007), but also to an increasein the number of connected customers.In reaction to the massive rise in procurement prices,higher prices became effective as of 1 November 2008.erdgas oö. has developed a product with a fixedprice for natural gas in order to offer customers pricesecurity for the imminent heating period.OÖ. Ferngas AG owns additional companies such asOÖ. Ferngas Service GmbH, the 100% subsidiary, andBBI Breitbandinfrastruktur GmbH (15% share) in thefield of telecommunications and telecommunicationscarrier services on the basis of the fiber optic network.ENSERV Energieservice & Co KG, which is a 100%subsidiary, offers its customers heating services, planning,and project management services for heat-supplyfacilities, as well as engineering services for bio-gasfacilities.At the end of 2007, Energie AG acquired a 15%share in Tauerngasstudien- und Planungsgesellschaftm.b.H. This company is conducting a feasibility studywith EU support concerning a natural-gas pipelinefrom the German/Austrian border through Salzburgand Carinthia to the neighboring countries to thesouth, i.e. Italy and Slovenia. The decision on feasibilitywill probably be taken in mid-2009. If the Tauerngas pipeline were to be realized, this would entail ahigher level of reliable supplies for the Austrian energymarket, as additional transport capacities for naturalgas would become available and/or it would be possibleto access new natural-gas sources.The decisive factor to accept a greater commitmentconcerning natural gas are strategic considerationsin the Energie AG Group, which take account of agreater use of the primary energy source, naturalgas, in the future. Similarly, the construction of the400 MW combined-cycle gas turbine power stationat Timelkam has been developed into the locationwith the power station that has the largest naturalgasconsumption in Upper Austria.Moreover, additional transport capacities will be neededif more natural gas is to be used by the Group and/orefforts will have to be made to diversify the portfolioof natural-gas suppliers.STABLE GROWTH INTHE HEATING BUSINESS AREAThe goals of the heating business area are to providestable contributions to the result and value-basedgrowth in Upper Austria and defined CEE countries.In order to create the structural requirements for asuccessful appearance on the Czech and Slovak heat -ing markets, Energie AG Teplo Slovakia was foundedin Slovakia after Energie AG Teplo Bohemia had beenset up in the Czech Republic. These companies serveto coordinate the ongoing business and as a basis forfurther acquisitions.Compared to the extremely mild heating period2006/2007, it was possible to considerably increasethe heat sold during the period under review. Withan increase in heating degree days by an average of20%, the heat sold in the five Austrian supply networksamounted to 318.7 GWh, which is an increaseover the previous year of 60.2 GWh or 23.3%. TheHEAT SOLD1,2001,0008006004002004432005/2006IN GWhAustrian networks were supplied primarily with sufficientlygenerated heat from combined heat andpower units.Sales in the supply area of MTH Kolín in the CzechRepublic developed similarly. With a 23% increase inheating degree days it was possible to sell 88.3 GWhof heat. This is 8.4 GWh or 10.5% more than in theyear before.Against the background of a massive rise in primaryenergy prices, it was possible to obtain the approvalof the price authority in Upper Austria for an increasein the sales price in the range of 3.5% to 4.0% as of01 February 2008. In spite of this increase, districtheating continues to be in a favorable competitivesituation. On 01 November 2008 prices were raisedby another 1.4% to 2.9%.In the Austrian supply networks, a bonus campaignfor district heat was conducted during the expiredbusiness year. The objective was to make the conversionto district heating even more attractive, giventhe impact of steep increases in primary energy prices.As the number of customers subsequently went upby 2.5%, the campaign proved to be successful.In the course of our growth efforts in this businessarea, we continuously look into interesting projects3382006/2007998* )2007/2008* ) The value for 2007/2008 includes the full year sales ofthe heating companies that were fully consolidated asof 01 July 2008.49