Public consultation on the draft amendments to the methodology for setting the rate of return on investments

The National Energy Regulatory Council (NERC) is publishing for public consultation drafts related to the amendment of the Methodology for Determining the Rate of Return on Investment (Draft No 1 and Draft No 2). Comments and suggestions should be sent by 30 June 2023.

NERC publishes for public consultation a draft amendment to the Methodology for Determining the Rate of Return on Investments (the Methodology) (the Draft) and a draft amendment to the Methodology for Determining the Rate of Return on Investments (the Draft Amendment to the Resolution). The aim of the draft is to clarify the principles for calculating the return on investment of regulated undertakings. The draft amendment to the Resolution aims to clarify the implementing provision of the Resolution by explaining how the reporting period is determined for undertakings that have submitted draft prices before the date of adoption of the Resolution.

The draft provides for the following substantial changes:

  • • The calculation of the cost of equity capital shall take into account auctions in litas (up to 31 December 2014) and euro (from 1 January 2015) of Government Securities of the Republic of Lithuania (GSs) of 5 years' duration and of close duration (i.e. at least 1 643 days), which have been held in the last twelve months preceding 1 July of the current year, the arithmetic average of the weighted average yields (on the basis of successful bids), in order to ensure that the returns reflect the actual situation of the capital markets in recent years and to allow regulated entities to apply the current market conditions rates.
  • Taking into account the fact that not all economic entities have access to or use loans provided by international financial institutions, the calculation of the average cost of borrowed capital in the natural gas and electricity sectors has been adjusted to exclude loans provided by international financial institutions of which Lithuania is a member and the list of which is published on the website of the Ministry of Finance of the Republic of Lithuania.

It should be noted that NERC, in preparing the Draft, has also taken into account the comments of market participants, which were not taken into account in the previous amendments to the Methodology.

  • The draft is published in the Draft Legal Acts Information System of the Seimas of the Republic of Lithuania (TAIS) and on the NERC website
  • Please submit your comments and suggestions by email to or via the Seimas of the Republic of Lithuania's draft legislation information system, or, if this is not possible, by post to Verkių g. 25C-1, Vilnius, LT-08223 or by fax (+370 5) 213 5270.
  • Comments and suggestions are published under Consultation with the public..

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