EA decision may impact regulatory accounts

Elenia Verkko Oyj

03 June 2025

 

RNS Announcement

Decision from the Energy Authority Potentially Impacting Regulatory Accounts from 2020 onwards

In connection with its routine end-of-regulatory-period review, the Energy Authority (the "EA") has released a decision that claims that Elenia Verkko Oyj ("Elenia") has incorrectly treated two items since the beginning of the previous regulatory period in 2020. These items were created in connection with the sale of the district heating business in 2019 and Elenia group's reorganisation in 2020. On 28 May, Elenia received a decision from the EA (the "Decision"), requiring it to change the accounting treatment of these items. The Decision pertains to the information presented in the differentiated accounts, which is a note to the financial statements, and it does not require the restatement of historical financial statements. Elenia has already implemented the changes in question to the notes of its financial statements for 2024 published on 17 March.

Elenia intends to appeal the Decision to the market court, as Elenia views that the two items in question are not related to the regulated business. The Decision, if it stands, would be expected to negatively impact Elenia's regulatory asset base and reasonable return. The effect of the Decision would be that Elenia's cumulative regulatory position at the end of the previous regulatory period might change from a deficit to a surplus, hence possibly necessitating the offsetting of any regulatory surplus during the current regulatory period ending in 2027. The Decision has a limited impact on Elenia's regulatory accounts beyond 2027.

The impact of the Decision on Elenia is highly dependent on the outcome of the industry-wide ongoing in-court processes with regards to both the 5th regulatory period (2020-2023) and the current 6th and 7th regulatory periods (2024-2031), as well as any mitigative actions that might be implemented.

Unless Elenia succeeds in any of these actions, or in the appeal of the actual Decision, it may need to implement measures to offset its surplus, such as providing temporary rebates to customers for a limited time in the remainder of the current regulatory period (2024-2027). The impact of such temporary measures, if implemented, could have a material adverse effect on Elenia's earnings during the limited time when such temporary measures are applicable, but will not impact Elenia's ability to service its debt. If such temporary measures are implemented, Elenia expects they would be treated as an exceptional and non-recurring item in its financial statements.

For further information, please contact:

Mr Tommi Valento

Chief Financial Officer

Töölönkatu 4

00100 Helsinki

FINLAND

TEL: [phone]

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