MyElectric - Salzburg AG sells 50 % to VERBUND subsidiary APC

11/22/2001Wien

With its 50-%-participation in MyElectric Stromvertrieb GmbH, the Verbundgesellschaft is creating new conditions in the Austrian energy market via its distributor subsidiary APC and Salzburg AG.

 With MyElectric, the two eco-friendly energy producers are now jointly offering clean energy generated from hydropower at competitive rates. MyElectric is based in Salzburg, in Vienna there is a distribution office.

VERBUND and Salzburg AG will each hold 50 percent of the shares and appoint one managing director. "Thus a sound basis has been established for the further positive development of MyElectric", said the chairmen of the managing boards of the two companies, Hans Haider (VERBUND) and Dr. Arno Gasteiger (Salzburg AG) at a press conference in Vienna today, Thursday.

Through its decision to site the joint producer subsidiary EHP (European Hydro Power GmbH) planned with E.ON in Salzburg, the Verbundgesellschaft is the obvious partner of Salzburg AG not only from a national but also from a regional standpoint, according to Dr. Gasteiger.

"Salzburg AG and VERBUND are able to draw on decades of good cooperation. This step is the start for a further deepening of the relationships, which will doubtlessly strengthen our companies’ competitiveness in the domestic power market ", Mr. Haider, too, locates positive aspects for either partner company.

In addition to the participation of the VERBUND subsidiary APC in MyElectric with 50 % of the shares, the cooperation of the two parent companies entails other corporate linkage effects: Thus Salzburg AG receives 15 % of APC.

The future corporate structure of APC will be the following: VERBUND 60 %, Estag 25 %, and Salzburg AG 15 %. Also, the partners will extend the corporate linkages between Salzburg AG and VERBUND to the sales joint venture Raiffeisen Ware Wasserkraft. The existing ownership structure of Salzburg AG will remain unchanged.

The cooperation agreements also include a longer-term power purchase agreement, by which MyElectric and Salzburg AG will buy 80 percent of their annual electricity requirements from VERBUND.

The strategic cooperation between VERBUND and Salzburg AG leads to new responsibilities in the sales sector. Dr. Johann Sereinig, Member of the VERBUND Board of Management and responsible for power trading: "For VERBUND this is another step towards becoming a global supplier. In addition to the successful trading and big industrial user business in Austria and abroad, we are now also strongly represented in the market of mass customers. Key accounts with power requirements of more than 100,000 kWh per year and location will be managed by APC in the future. Industrial clients and household customers with lower requirements will be serviced by MyElectric or Raiffeisen Ware Wasserkraft." RWW will follow a clear focus group strategy in agriculture and the sectors associated with Raiffeisen; MyElectric as dynamic brand will be positioned predominantly in agglomeration areas ", said Mr. Sereinig.

"Through this task sharing the role of the central company in the new cooperation will fall to MyElectric ", says the Salzburg AG Director Wolfgang Anzengruber. He continued by saying: "Existing customers of Salzburg AG, including supraregional ones, will remain customers of Salzburg AG – regardless of their size. Through this restructuring of the sales functions we are able to respond to the changed conditions in the liberalized Austrian electricity market in a reasonable fashion and to strengthen our excellent position in the market even further", Mr. Anzengruber is positive.

In June, MyElectric presented itself to the public as supplier of private and industrial customers. The company had already been offering cost-effective power rates to big industrial users in all of Austria since the beginning of this year. To private customers and industrial customers, MyElectric offers a fair energy price: the net price of one kilowatt hour of electricity is only 46.8 groschen (3.4 cent), including sales tax this makes 56.2 groschen per kWh (4,08 cent). MyElectric’s service fee is only just 21 ATS (1.51 Euro) per month in gross terms.

All private customers who buy more than 3,500 kWh per year will not be charged the service fee by MyElectric. To industrial users and small and medium-sized enterprises, MyElectric offers a quantity bonus staggered according to annual consumption: For an annual consumption of 10,000 kWh and more, MyElectric offers a quantity bonus of 500 kWh, which will increase to 2,000 kWh of free power if the annual consumption rises to more than 80,000 kWh. The lifetime of contracts for industrial users and small and medium-sized enterprises is 12 months.