Valuation established for transmission network installations


25.10.2016 - In connection with the transfer of the transmission network from the former owners to Swissgrid, ElCom has ruled on the method for establishing the value of the transmission network installations. Applying this method, Axpo will receive additional compensation of CHF 160 million for the transfer of its transmission network to Swissgrid. The financial transaction will take place in financial year 2016/17.

Swissgrid has been the owner of the Swiss transmission network and installations since 2013. The complex transfer was planned and realised together with the former transmission network owners. ElCom ruled on a valuation method for the transferred infrastructure for the first time in September 2012. This method was based on the underlying regulatory criteria applicable to pricing (= regulatory value). The previous transmission network owners lodged appeals against the ruling. In November 2013, the Federal Administrative Court ruled that the network transfer was an act of formal expropriation, and that valuation based on pricing did not comply with the constitutional entitlement for full compensation according to legal expropriation principles. The Federal Administrative Court referred the matter back to EICom in order to establish a definitively applicable valuation method.

In view of implementing the Federal Administrative Court’s ruling, some of the former transmission network owners worked out a definitive valuation method in consultation with EICom. The method has been defined in a contract between all the former transmission network owners and Swissgrid; this contract is the basis for the EICom ruling dated 20 October 2016.

Implications on Axpo’s annual financial statements

The ruling is effective for financial year 2016/17 and will be entered in the financial statements accordingly – provided that the ruling goes into legal force. Axpo (including the subsidiary CKW) expects the financial transaction amounting to approximately CHF 160 million to take place in the 1st quarter of 2016. Based on the new valuation method, Swissgrid expects to make additional compensation payments on the order of some CHF 415 million.

Swissgrid reports that the new valuation method of the transmission network will not result in tariff increases for electricity consumers owing to previously collected, unused auction proceeds. 

Axpo Holding AG

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