Prague will decide on the billion-dollar aid of Pražská plynárenská
Prague councilors will probably have an urgent matter on the table right after Easter in the form of financial assistance to the municipal company Pražské plynárenské. Due to this, the head of the company, Martin Pacovský, had a presentation at the municipality last week, in which he convinced the representatives of the metropolis about the need for a capital injection of two billion crowns. The Council will also decide on the patronage declaration. This is a softer form for banks, although there is no guarantee in the true sense of the word.
While the Prague opposition points to a dysfunctional business, the Prague leadership assures that nothing dramatic is happening and that the wine is opposed from chasing points before the September municipal elections. In this case, this is the first time that the problems of a large energy company belonging to the supplier of last resort have been publicly addressed. Pražská plynárenská supplies gas and electricity with around 425,000 consumption points.
“Pražská plynárenská certainly has money to run. There is no danger of a company falling. In addition, the company has open credit lines with banks. As for the need to strengthen, everyone on the market now deals with capital, only at Pražská plynárenská it can be seen thanks to the fact that it is a municipal company. In addition, it is a grateful topic for the opposition, “said Councilor Jan Chabr (TOP 09).
It is Prague’s opposition politicians who point out that everything is not right in Pražská plynárenská. According to the head of the YES club, Ondřej Prokop, the situation in the company is deeply worrying. At the same time, however, it is behind other representatives that the Prague Gas Opposition Solution is in danger of even insolvency.
“After the change in the board of directors, we have long been assured of the continuation of a well-run company, with the company continuing to contribute to the capital’s budget in the amount of at least 500 million crowns, as has been the custom in recent years. The opposite is true, “said Prokop.
Gas under pressure
According to Chabr, however, information about Pražská plynárenská’s alleged delay last year is a typical noise that is currently spreading around the company. According to preliminary results, the company was supposed to earn around one billion crowns.
The fact is, however, that it was Pražská plynárenská and the management of Prague who turned to the government in March with an urgent warning that other energy suppliers were in danger of falling and that suppliers of last resort were also in a difficult situation. This is partly due to the fact that high principal is also derived from expensive gas, which suppliers deposit with the state energy market operator OTE and on stock exchanges.
Pražská plynárenská certainly has money to run. There is no danger of a company falling. In addition, the company has open credit lines with banks.
These are the costs that Pražská plynárenská had to borrow from banks, according to Chabr. “Perhaps this is the source of rumors that the company does not operate,” the councilor added.
From the negotiations of Pražská plynárenská, the city and the bank, however, the need arose for financial institutions to have black and white from Prague that they were fully behind their business. Therefore, after Easter, the council will, in addition to the two billion loan, also deal with a patronage statement in favor of Pražská plynárenská. This is not, in the true sense of the word, the guarantees that banks could claim in the event of a bank failure. For financial institutions, a patronage statement is a kind of reassurance to a shareholder that he is “putting his hand to the fire” for his daughter.
Filling bins for the winter
Although the approval of the council is enough for the patronage statement, it will still have to lend to the approval of the council. According to the company, there are two needs to fill the storage tank with gas before the next heating season.
“The stated amount of the two mentioned crowns is intended for fulfillment for the winter season 2022/2023, and if it was finally solved in a different way, it would not be drawn,” said Miroslav Vránek, a spokesman for Pražská plynárenská. It is not yet clear whether the state will be involved in financing the purchase of gas for storage facilities, or how much financial burden will remain on suppliers. According to Vránek, in order for gasmen to have the required supply before the next winter, they must start injecting gas into the storage tanks in May at the latest.
Pražská plynárenská is one of the suppliers of last resort, which took over 900,000 customers of this company, especially after the fall of Bohemia Energy. Approximately 45,000 customers accounted for Pražská plynárenská. For them, the company must buy gas on the market at current high prices.
“For customers in the mode of supplier of last resort, we had to buy on the current market for understandable reasons, while the price lists for customers in the DPI mode are under the control of the Energy Regulatory Office,” added a representative of Pražská plynárenská.
The company has also raised prices three times since November for regular customers with a notice from customers with fixed prices. The last time at the beginning of April averaged 15.7 percent.