The amendments and clarifications are generally positive for German electricity transmission network operators, in particular TenneT TSO GmbH, owned by TenneT Holding B.V. (A3 stable) and 50Hertz Transmission GmbH, owned by Eurogrid GmbH (Baa1 stable).
The main change concerns the treatment of liabilities for damages payable by transmission network operators ("TSOs") to wind farm operators if their network connection is delayed and/or disrupted.
The updated draft introduces a distinction between negligence and gross negligence in setting a liability cap for financial losses incurred by wind farm operators due to connection delays/disruption. If a TSO has simply been negligent, it's liability is capped at EUR17.5 million per incident. Only in the case of gross negligence would the maximum liability cap apply, which has been increased to EUR110 million (previously EUR100 million) per TSO per year. However, the draft law continues to imply that if an offshore wind farm operator suffers losses due to delay and/or disruption of the network connection, the responsible TSO may have been grossly negligent.
As previously stated, Moody's believes that the introduction of a liability cap is positive for German TSOs, as it reduces their overall exposure to potential delay damages. The distinction for gross negligence is also positive, although the burden of proof that it has not been grossly negligent remains with the TSO. Overall, the draft law specifically sets out that there should be ongoing dialogue and communication between the TSO and wind farm operator with regular updates on the scheduled network connection build-out. If there are delays the German energy regulator, the Federal Network Agency (Bundesnetzagentur, BNetzA) has to be informed and a remedial plan agreed with it.
Whilst the reduction in the limit for delay damages is positive, the pass-through of remaining liabilities due to delays continues to be subject to an annual cap, which restricts the affected TSOs' ability to recover related costs in any given year. However, the updated draft law clarifies that from 1 January 2013, the TSOs will already be able to collect an additional charge on top of the usual network fees to build up a liquidity buffer for future damages. Moody's considers this clarification a clear positive as an initial liquidity buffer will limit liquidity requirements.
The second key amendment refers to the prohibition on decommissioning power plants that are considered system-critical. The draft law stipulates that plants with a capacity of 50MW or more cannot be shut down and decommissioned, if that would in all likelihood endanger the security of electricity supply. Whether a plant is regarded as system-critical is considered by the TSO, in whose area the plant is located, and needs to be approved by the BNetzA. A system-critical classification will be applied for a period of 24 months. During that time, the plant operator has to continue to maintain the plant to allow ongoing safe operation. It will be remunerated by the TSO, in whose area it is operating, to cover for such maintenance expenditure.
In addition, the draft law specifies that for gas-fired power plants that are considered system-critical, the generator is obliged to (i) provide for an alternative fuel source if this is technically feasible, or (ii) otherwise secure sufficient gas supply. Again, the costs for the fuel change will be reimbursed by the TSO.
Moody's considers it likely that additional operational and/or maintenance costs for generators to be covered by the relevant TSOs will be passed through to the end consumers. This, together with the additional levies related to renewable energy and potential offshore delay liabilities increase the risk of overburdening private consumers. The affordability question may therefore become more prominent in determining utilities' credit risk. Moody's notes, however, that the ongoing operation of power plants that would otherwise be shut-down may also reduce the potential overall increase in power prices; hence the impact of continuing to run system-critical power plants on consumer prices may be difficult to assess at this stage.
Following parliamentary approval, the Bundesrat (the representation of the German federal states) will need to pass the law, and the related debate is expected in mid-December. Given the importance of the aspects addressed in the law for the future viability of the German electricity networks to ensure ongoing investments as well as security of supply, we believe the law is likely to reach the statute books by the end of the year.
NOTE TO JOURNALISTS ONLY: For more information, please call one of our global press information hotlines: New York+1-212-553-0376, London+44-20-7772-5456, Tokyo+813-5408-4110, Hong Kong+852-3758-1350, Sydney+61-2-9270-8141, Mexico City001-888-779-5833, São Paulo 0800-891-2518, or Buenos Aires0800-666-3506. You can also email us at firstname.lastname@example.org or visit our web site at www.moodys.com.
Stefanie VoelzAsst Vice President - Analyst Infrastructure Finance Group Moody'sInvestors Service Ltd. One Canada SquareCanary WharfLondon E14 5FA United Kingdom JOURNALISTS: 44 20 7772 5456 SUBSCRIBERS: 44 20 7772 5454 Andrew Blease Senior Vice President Infrastructure Finance Group JOURNALISTS: 44 20 7772 5456 SUBSCRIBERS: 44 20 7772 5454 Releasing Office: Moody's Investors Service Ltd. One Canada SquareCanary WharfLondon E14 5FA United Kingdom JOURNALISTS: 44 20 7772 5456 SUBSCRIBERS: 44 20 7772 5454 (C) 2012 Moody's Investors Service, Inc. and/or its licensors and affiliates (collectively, "MOODY'S"). All rights reserved.
CREDIT RATINGS ISSUED BY MOODY'S INVESTORS SERVICE, INC. ("MIS") AND ITS AFFILIATES ARE MOODY'S CURRENT OPINIONS OF THE RELATIVE FUTURE CREDIT RISK OF ENTITIES, CREDIT COMMITMENTS, OR DEBT OR DEBT-LIKE SECURITIES, AND CREDIT RATINGS AND RESEARCH PUBLICATIONS PUBLISHED BY MOODY'S ("MOODY'S PUBLICATIONS") MAY INCLUDE MOODY'S CURRENT OPINIONS OF THE RELATIVE FUTURE CREDIT RISK OF ENTITIES, CREDIT COMMITMENTS, OR DEBT OR DEBT-LIKE SECURITIES. MOODY'S DEFINES CREDIT RISK AS THE RISK THAT AN ENTITY MAY NOT MEET ITS CONTRACTUAL, FINANCIAL OBLIGATIONS AS THEY COME DUE AND ANY ESTIMATED FINANCIAL LOSS IN THE EVENT OF DEFAULT. CREDIT RATINGS DO NOT ADDRESS ANY OTHER RISK, INCLUDING BUT NOT LIMITED TO: LIQUIDITY RISK, MARKET VALUE RISK, OR PRICE VOLATILITY. CREDIT RATINGS AND MOODY'S OPINIONS INCLUDED IN MOODY'S PUBLICATIONS ARE NOT STATEMENTS OF CURRENT OR HISTORICAL FACT. CREDIT RATINGS AND MOODY'S PUBLICATIONS DO NOT CONSTITUTE OR PROVIDE INVESTMENT OR FINANCIAL ADVICE, AND CREDIT RATINGS AND MOODY'S PUBLICATIONS ARE NOT AND DO NOT PROVIDE RECOMMENDATIONS TO PURCHASE, SELL, OR HOLD PARTICULAR SECURITIES. NEITHER CREDIT RATINGS NOR MOODY'S PUBLICATIONS COMMENT ON THE SUITABILITY OF AN INVESTMENT FOR ANY PARTICULAR INVESTOR. MOODY'S ISSUES ITS CREDIT RATINGS AND PUBLISHES MOODY'S PUBLICATIONS WITH THE EXPECTATION AND UNDERSTANDING THAT EACH INVESTOR WILL MAKE ITS OWN STUDY AND EVALUATION OF EACH SECURITY THAT IS UNDER CONSIDERATION FOR PURCHASE, HOLDING, OR SALE.
ALL INFORMATION CONTAINED HEREIN IS PROTECTED BY LAW, INCLUDING BUT NOT LIMITED TO, COPYRIGHT LAW, AND NONE OF SUCH INFORMATION MAY BE COPIED OR OTHERWISE REPRODUCED, REPACKAGED, FURTHER TRANSMITTED, TRANSFERRED,DISSEMINATED, REDISTRIBUTED OR RESOLD, OR STORED FOR SUBSEQUENT USE FOR ANY SUCH PURPOSE, IN WHOLE OR IN PART, IN ANY FORM OR MANNER OR BY ANY MEANS WHATSOEVER, BY ANY PERSON WITHOUT MOODY'S PRIOR WRITTEN CONSENT.
All information contained herein is obtained by MOODY'S from sources believed by it to be accurate and reliable. Because of the possibility of human or mechanical error as well as other factors, however, all information contained herein is provided "AS IS" without warranty of any kind. MOODY'S adopts all necessary measures so that the information it uses in assigning a credit rating is of sufficient quality and from sources MOODY'S considers to be reliable including, when appropriate, independent third-party sources. However, MOODY'S is not an auditor and cannot in every instance independently verify or validate information received in the rating process. Under no circumstances shall MOODY'S have any liability to any person or entity for (a) any loss or damage in whole or in part caused by, resulting from, or relating to, any error negligent or otherwise or other circumstance or contingency within or outside the control of MOODY'S or any of its directors, officers, employees or agents in connection with the procurement, collection, compilation, analysis, interpretation, communication, publication or delivery of any such information, or (b) any direct, indirect, special, consequential, compensatory or incidental damages whatsoever (including without limitation, lost profits), even if MOODY'S is advised in advance of the possibility of such damages, resulting from the use of or inability to use, any such information. The ratings, financial reporting analysis, projections, and other observations, if any, constituting part of the information contained herein are, and must be construed solely as, statements of opinion and not statements of fact or recommendations to purchase, sell or hold any securities. Each user of the information contained herein must make its own study and evaluation of each security it may consider purchasing, holding or selling.
NO WARRANTY, EXPRESS OR IMPLIED, AS TO THE ACCURACY, TIMELINESS, COMPLETENESS, MERCHANTABILITY OR FITNESS FOR ANY PARTICULAR PURPOSE OF ANY SUCH RATING OR OTHER OPINION OR INFORMATION IS GIVEN OR MADE BY MOODY'S IN ANY FORM OR MANNER WHATSOEVER.
MIS, a wholly-owned credit rating agency subsidiary of Moody's Corporation ("MCO"), hereby discloses that most issuers of debt securities (including corporate and municipal bonds, debentures, notes and commercial paper) and preferred stock rated by MIS have, prior to assignment of any rating, agreed to pay to MIS for appraisal and rating services rendered by it fees ranging from $1,500 to approximately $2,500,000. MCO and MIS also maintain policies and procedures to address the independence of MIS's ratings and rating processes. Information regarding certain affiliations that may exist between directors of MCO and rated entities, and between entities who hold ratings from MIS and have also publicly reported to the SEC an ownership interest in MCO of more than 5%, is posted annually at www.moodys.com under the heading "Shareholder Relations -- Corporate Governance -- Director and Shareholder Affiliation Policy."
Any publication into Australia of this document is by MOODY'S affiliate, Moody's Investors Service Pty Limited ABN 61 003 399 657, which holds Australian Financial Services License no. 336969. This document is intended to be provided only to "wholesale clients" within the meaning of section 761G of the Corporations Act 2001. By continuing to access this document from within Australia, you represent to MOODY'S that you are, or are accessing the document as a representative of, a "wholesale client" and that neither you nor the entity you represent will directly or indirectly disseminate this document or its contents to "retail clients" within the meaning of section 761G of the Corporations Act 2001.
Notwithstanding the foregoing, credit ratings assigned on and after October 1, 2010 by Moody's Japan K.K. ("MJKK") are MJKK's current opinions of the relative future credit risk of entities, credit commitments, or debt or debt-like securities. In such a case, "MIS" in the foregoing statements shall be deemed to be replaced with "MJKK". MJKK is a wholly-owned credit rating agency subsidiary of Moody's Group Japan G.K., which is wholly owned by Moody's Overseas Holdings Inc., a wholly-owned subsidiary of MCO.
This credit rating is an opinion as to the creditworthiness or a debt obligation of the issuer, not on the equity securities of the issuer or any form of security that is available to retail investors. It would be dangerous for retail investors to make any investment decision based on this credit rating. If in doubt you should contact your financial or other professional adviser.
Heute im Fokus
Gerücht über Investoren-Interesse an HPE lässt Aktie steigen. Rettungsplan für Krisenbank Monte dei Paschi rückt näher. VW hadert weiter mit US-Klagen - Hunderte neue Mitarbeiter nötig. Sinkflug der Ölpreise durch schwache US-Daten etwas ausgebremst. AB InBev nimmt letzte Wettbewerbshürde vor SABMiller-Fusion. US-Notenbanker Williams: Zwei Zinsanhebungen in diesem Jahr möglich. US-Wirtschaft wächst nur halb so stark wie erhofft.
Diesen Berufsgruppen trauen die Deutschen
Diese Firmen sind innovativ
Welche deutsche Stadt hat die meiste Kohle?