EDP regulated revenue rises €93 mln as Portuguese WACC holds at 6.33% By Investing.com
Key Takeaways
- ERSE proposed a 1% increase in regulated electricity tariffs for 2026.
- E-Redes' regulated electricity distribution gross profit is projected to rise to €1.22 billion in 2026.
- The WACC for 2026-2029 is maintained with a current pre-tax rate of 6.33%, which is below some expectations.
- ERSE is consulting on new regulations to incentivize digitalization and flexible network solutions (Totex-based incentives).
- The tariff deficit is expected to decrease significantly to €1.08 billion in 2026 from €1.59 billion in 2025.
The Portuguese Electricity Regulator (ERSE) has announced a proposed 1% increase in regulated electricity tariffs for 2026 in the normal low voltage segment, setting the grid assets tariff at €97.1 per megawatt-hour. This adjustment is projected to increase the regulated gross profit for E-Redes' electricity distribution to €1.22 billion, up by €93 million from 2025, reflecting higher returns and a larger regulatory asset base. ERSE will keep the WACC mechanism for 2026-2029, tied to 10-year Portuguese government bond yields with a floor of 5.50%, resulting in a current pre-tax WACC of 6.33%, which is below some industry expectations. The regulator also plans to eliminate an extraordinary tax that previously reduced the base return on new electricity network investments starting in 2026. Additionally, ERSE launched a consultation for new regulations focusing on Totex-based incentives that favor digitalization and flexible solutions over conventional capital expenditures. The final determination on 2026 tariffs and network remuneration for the 2026-2029 period is scheduled for December 15.
