*      Operation of local distribution networks in the Czech Republic

*      Investment into local distribution network

*      Consultancy service for investors

*      Drafting


1.    Development of the local distribution network
The local distribution network (LDN) is a distribution system for connecting end users to the electricity network and supplying electricity to the customer, or into the customer’s property. The electricity distribution network is operated by the licensed distribution companies in
the territory outlined by such a licence. LDN can occur wherever there are more customers (electricity consumers) connected to the electricity network via a single connecting point in the super grid. Typically, this is the industrial zones, commercial centres, existing
industrial sites, apartment blocks and family housing estates. LDN is created by defining the distribution territory, where the owner /user of the given territory decides to conclude a contract with a selected distribution company, a contract defining the territory for distribution.
Subsequently, the distributor invests into the development of the new distribution network, or buys or rents the current network from the current owner. The selected distributor will then be responsible for the electricity distribution in the given territory and for the connection of new customers to the same extent as the regional distribution company. The distributor’s standpoint has the same force towards government administration bodies, for example when submitting the application for building permission and which development will take place in the given territory.

2.    Legal framework
All rules are established by the Energy Act and the relevant implementing regulations.

3.    Description of the proposed local distribution network
The local distribution network (LDN) will be used to connect end users to the electricity network and to supply electricity to customers from the 0.4 kV distribution lines. The 0.4 kV distribution system is linked to the transformer station, which supplies electricity into the LDN. The transformer station will be connected to the distribution network of the distribution company’s super grid. Within the LUMEN INTERNATIONAL Group is the LDN operator LUMEN DISTRIBUČNÍ SOUSTAVY s.r.o. which is also responsible for operating and ensuring the reliability of the LDN and is the distribution partnersfor the planned end customers (electricity users).
The electricity end user will be connected to low voltage (0.4 kV) and the appropriate parameters will be measured using an electrometer for billing purposes.

4.    Price for the service (distribution charge)
In the event of the development of LDN, the electricity end user will pay for the service inthe same manner as other customers in the regional distribution network. The price for the service is government regulated and is determined for each distribution territory (ČEZ, E.ON, PRE...etc) by the Czech Republic Energy Regulatory Office in the form of a price regulative decision issued each calendar year. The customer pays for the service either directly to their electricity supplier based on the contract for associated services (i.e. in the form of a single invoice also issued for the cost of power) or separately to the distribution company, which in this case is LUMEN DISTRIBUČNÍ SOUSTAVY s.r.o. Distribution fees will be determined based on the price decision issued by the Energy Regulatory Office according to the size of the reserved value of the customer’s main circuit breaker.

5.    Advantages of the LDN for the investor
-      Savings on investment costs for the development of the electricity infrastructure (all investment costs are borne by Lumen)
-      Savings for the operation of the electricity infrastructure – a transformer station (implemented by the LDN operator)
-      Possible bonus benefits for providing a territory for electricity distribution, according to predetermined conditions
-      More flexible service for LDN operation, connection and customer service in the LDN
-      Freedom of choice for the end user in terms of choosing their electricity supplier