Off-balance sheet assets and liabilities

29 Contingent assets and liabilities

Off-balance sheet assets and liabilities other than guarantees are presented at present value. Present value is calculated using a discount rate that reflects current market assessments of the time value of money. The discount rate applied is the euro zero coupon yield curve.

Energy purchase commitments

Stedin Group has energy purchase commitments to offset administrative and technical network losses. Based on the rates applicable in 2022, the obligation amounts to €841 million (2021: €752 million) and relates to the period from 2023 to the end of 2030. The rates applicable to the purchase commitment for 2023 have largely been agreed already, in line with our purchasing strategy. Where rates have not been agreed yet, Stedin Group uses the expected rates in the energy market for the relevant delivery year as these applied as at 31 December 2022. As these rates may be subject to change due to future fluctuations in rates in the energy market, the future amount of the obligation is volatile.

Investment obligations

As at year-end 2022, Stedin Group had entered into investment obligations with a total amount of €31 million (2021: €34 million). These investment obligations relate to investments in smart meters. The investment obligations have been entered into through to 2024.

Other obligations

In addition, Stedin Group entered into contractual obligations for an amount of €6 million (2021: €7 million). These are mainly contractual obligations for maintenance.

Guarantees

Stedin Group has issued group and bank guarantees to third parties of €1 million (2021: €1 million). Of that total, Stedin Holding N.V. issued €0 million (2021: €0 million) in guarantees. This guarantee was provided by a subsidiary.

Stedin Group has taken out directors’ and officers’ liability insurance for the members of the Supervisory Board, the members of the Board of Management, the directors and other executives within Stedin Group. To the extent possible, the directors are indemnified by Stedin Group, subject to specific conditions, against costs in connection with civil-law, criminal-law or administrative-law proceedings in which they could be involved because of their position.

Metering services results

The rates that Stedin charges as a grid manager for low-use meter rental are regulated and based on the Ministerial Metering Tariff Regulation (Ministeriële Regeling Meettarieven, MR), which lays down how the ACM sets such rates. The maximum rates that grid managers may charge are currently based on the 2005 rate levels, plus an annual inflation adjustment in accordance with the consumer price index. Since 2011, the ACM has monitored the costs incurred in executing the metering task. It should be possible in this regard to fund the Large-Scale Roll-Out of Smart Meters project from the returns that are achieved. The Ministerial Metering Tariff Regulation ensures that consumers ultimately do not pay more than the break-even rates. To this end, the ACM may include the returns achieved in future decisions on rates. We currently estimate that Stedin has achieved sufficient returns at this moment compared with the costs of the large-scale roll-out of smart meters (GSA). The GSA ended in 2021, after Stedin had offered smart meters to 100% of its customers and had actually installed them at more than 80%. In addition, Stedin is also already taking into account the additional mandate from the Ministry of Economic Affairs and Climate Policy (EZK) to seek to achieve an even higher completion rate in the years ahead. In recent years, surplus profits have been largely returned to consumers by means of tariff reductions. The surplus profits amounted to €5 million as at year-end 2022 and will offset in the future by means of tariff reductions.

Legal proceedings

Stedin Group is involved either as plaintiff or defendant in various legal and regulatory claims and proceedings related to its operations. The amounts claimed in some of these proceedings may be significant to the consolidated financial statements. Liabilities and contingencies in connection with these claims and proceedings are assessed periodically based on the latest information available. A liability is only recognised if an adverse outcome is considered to be probable and the amount of the loss can be reasonably estimated; see note 24 Other provisions.

Stedin is involved with several municipalities in claims for municipal sufferance taxes. The potential impact for Stedin is a receivable ranging up to approximately €37 million (2021: €37 million). Due to uncertainties, this potential receivable is not recognised in the balance sheet as at 31 December 2022.

Rendant

Stedin has been designated by the Minister of Economic Affairs and Climate Policy as grid manager for a third-party electricity grid and gas grid. Following completed court proceedings, Stedin acquired full - both legal and economic - ownership of this electricity and gas network in 2022 for a payment of €1.6 million. However, the final valuation of these acquired assets is still unknown and will be determined by means of a binding advisory procedure. The outcome of this procedure is currently planned for the end of the first quarter of 2023. Given the current uncertainties regarding the final valuation, further potential receivables and/or liabilities in this respect, apart from the €1.6 million already paid, have not yet been recognised in the financial statements as at 31 December 2022.

Fiscal unity

Stedin Holding N.V. forms a fiscal unity for corporate income tax purposes with all its consolidated subsidiaries and associates as listed in note 36 Overview of subsidiaries and associates 36 Overview of subsidiaries and associates. The companies, including Stedin Holding N.V., that are part of a fiscal unity are jointly and severally liable for the tax obligations of that fiscal unity.

There is also a fiscal unity for VAT purposes that includes Stedin Holding N.V. and all its consolidated subsidiaries and associates as listed in note 36 Overview of subsidiaries and associates 36 Overview of subsidiaries and associates. Only companies, including Stedin Holding N.V., that are part of a fiscal unity are jointly and severally liable for the tax obligations of that fiscal unity.

Cash pool

Under its participation in the Stedin Group cash pool, Stedin Holding N.V., like the other participants, is jointly and severally liable for deficits in Stedin Group’s cash pool.