How many people and in what total value do you have to return overpayments on deposits?
Out of the total number of 1,200,000 clients of the Bohemia Energy group, we have already sent overpayments to 75% of them.
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It is essential that the ERO establishes clear rules for regulating the regime and DPI suppliers, which we completely lack.
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By when will you return all the money to people’s accounts? After all, you announced the end of the business on October 13th. More than two months have passed since then.
The remaining quarter of customers will receive their overpayments on account early next year. We are working hard to make it happen as soon as possible. Unfortunately, we have to deal with a huge number of billing complaints.
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This is due to inaccurate consumption estimates sent to us by distribution system operators (DSOs) as billing documents. Complaints that we handle with PDS are time consuming, but we do everything we can to process them as quickly as possible.
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Bohemia Energy was the largest alternative energy supplier in the Czech Republic, yet it ceased operations overnight. What went wrong so quickly? Was there really no other, less drastic way to phase out so that people and suppliers of last resort could better prepare for the situation?
There were two reasons for the end of energy supplies. The first is an absolutely enormous rise in energy prices, which no one has really been able to predict. The situation is so extraordinary that even now, by the end of the year, no one can predict how it will develop further.
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Between October 13 and today alone, electricity prices rose from 125 euros to 320 euros per MWh. Even today’s electricity purchases for the first quarter of 2022 are selling for around 440 euros per MWh. At the same time, a number of leading experts predicted a drop in prices for this period.
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The second reason was that on October 12, the banks told us that we did not have their support and would not receive an increase in the credit line from them. At the same time, Bohemia Energy was very strong financially, it did not pay any dividends in the last 6 years and all profits of approximately four billion crowns remained in the company.
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Nevertheless, we have been negotiating intensively with the club of financing banks since July to increase operating financing, even though we already had an approved credit facility of CZK 2 billion. After the first negotiations with the banks, we received preliminary feedback that part of the banking club is interested in increasing the credit limit and part is interested in extending the already approved framework.
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Even so, we did not want to rely only on banks, so we also negotiated with many other financial institutions, groups and investors not only in the Czech Republic but also abroad. However, the turning point came on the afternoon of October 12, when the banking club told us at a personal meeting attended by over 25 bankers that we did not have support to draw an already approved loan of CZK 2 billion.
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If we continued to supply energy at this time, we would generate huge losses on a daily basis and there would be a real risk that the group would fall into insolvency, which would be the worst possible option for all our customers.
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You mentioned the continuing enormous rise in energy prices. So the worst price increase is not over yet?
One thing is that electricity and gas prices are high and all consumers will feel the same. An even bigger problem, however, is that we may soon face a situation where gas storage is depleted and supplies may be reduced as regulatory stages begin to apply. This may lead to a situation where the problem will not be the price of electricity or gas, but whether or not we will simply be able to flood.
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The court has three times rejected the insolvency administrator Jaroslav Brož’s request to block money in Bohemia Energy’s accounts in favor of businessman Tomáš Bárta. Where would you get the money to return the money to clients if Brož succeeded with a possible further request?
The insolvency administrator’s raids are entirely purposeful. It is unbelievable what can happen within the insolvency proceedings of the bankrupt businessman Bárta, who was controlled by the enforcer Petr Bujnoch. We greatly appreciate the fact that the courts have already ruled three times that all actions of the Brože administrator are unjustified and have allowed us to return overpayments to our former customers.
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At a press conference, you relied on last resort suppliers that they were abusing situations when people demanded many times more in advance. Does that mean you would be in favor of price caps?
I’m not in favor of regulating current prices. However, it is necessary for the ERO to create clear rules for the regulation of the DPI regime and suppliers, which we completely lack. In recent weeks, there has been considerable talk in the media about the large difference in the prices of individual suppliers within the DPI.
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At the same time, customers could not choose from whom they would receive energy. I consider this a complete failure. DPI is intended to help customers, not to benefit individual suppliers. Apart from the different prices across suppliers, I also see a problem in the fact that our former customers have been forced to stay within the DPI for an inadequately long time.
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If we now look at that sequence of events in the rearview mirror, that is, from the beginning of the rise in energy prices on the market to your end, which has suddenly left 900,000 people without suppliers, would you do anything different today?
Terminating energy supplies was really the most difficult decision we had to make in business in 16 years. Even with the passage of time, however, we perceive that at the moment, this was the best solution for our customers.
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This is confirmed by the constantly rising price of energy, which in some hours is already traded around 500-600 euros per MWh and is still rising. We now know for sure that if we continued to deliver, we would not really avoid insolvency, which would prevent us from repaying overpayments.
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How will it be with your employees now? Are you terminating your employment with them?
Yes it’s right. Unfortunately, we gradually have to end our employment with our employees. Some of them have been with us since the very beginning of the group, so it is very difficult to say goodbye now. Of course, we will also pay them the severance pay to which they are entitled.
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What are your business plans for the future? Still, you don’t want to go back to energy?
It is now premature to talk about my business plans for the future, as I am still fully focused on returning overpayments to our former customers as soon as possible. This period is also so demanding for me that I have deprived my family of a lot of time, which I would now like to devote to it. That’s why I’m not dealing with my future anymore.
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