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Regulated asset base and its impact on the profit of energy commodity distributors
[Regulovaná báze aktiv a její vliv na zisk distributorů energetických komodit]

Author

Listed:
  • Jakub Mašek
  • Radana Šmídová

Abstract

The article addresses the topic of profit calculation of companies involved in the energy distribution sector. These companies naturally have a monopoly position and therefore the price of their distribution services (including level of profit) is set by the central regulatory authority. Mainly to prevent the existence of market inefficiencies. The article then describes the mechanism of profit calculation using regulatory asset base and application of weight average cost of capital that shall ensure appropriate profit level guaranteeing a return on investments to distribution infrastructure. The last part composes of the financial analysis of selected distribution companies.

Suggested Citation

  • Jakub Mašek & Radana Šmídová, 2021. "Regulated asset base and its impact on the profit of energy commodity distributors [Regulovaná báze aktiv a její vliv na zisk distributorů energetických komodit]," Oceňování, Prague University of Economics and Business, vol. 14(1), pages 47-64.
    • Handle: RePEc:prg:jnloce:v:14:y:2021:i:1:id:2021_1_04:p:47-64
    DOI: 10.18267/j.ocenovani.259
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    More about this item

    Keywords

    Regulated asset base; Distribution; WACC; Regulovaná báze aktiv; Distribuce;
    All these keywords.

    JEL classification:

    • G39 - Financial Economics - - Corporate Finance and Governance - - - Other

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