OREANDA-NEWS. On 09 July 2008 was announced, that „Work on introduction of the new tariff regulation system in the grid complex is going on. On June 18 the Government of the Russian Federation adopted amendments to Decree No109 On pricing concerning electric and thermal energy in the Russian Federation. The made changes allowed to start implementation in Russia of the new tariff design system based on the method of return on the invested capital (RAB, i.e. Regulatory Asset Base).

Recently the  Federal Tariff Service and the Ministry for Economic Development and Trade of the Russian Federation have coordinated and sent for registration to the  Ministry of Justice the tariff accounting procedure by method of return on  the invested capital (with invested capital normal return accounting procedure  and rules of the invested capital definition and accounting). Approximately within a week after the procedure registration, the FTS and Ministry for Economic Development and Trade will issue an order on establishment of the invested capital return rate.

After that the regional regulators and  FTS will have to set initial bases of the capital for the distribution grid companies in five pilot regions Ѓ\  Belgorod, Astrakhan, Tver, Orenburg and Perm Regions.

IDGC of Centre, JSC subsidiaries "Belgorodenergo" and "Tverenergo" underwent preliminaries at the threshold of transition to the new tariff regulation system.

In April of this year the Agreement on participation of "Belgorodenergo", an IDGC of Centre, JSC subsidiary, in the pilot project on introduction of the RAB-based tariff regulation system was signed for the first time in Russia. The document which starts introduction of the new tariff system in the power industry of the region, was signed by the Head of the Federal Tariff Service Sergey Novikov, Governor of the Belgorod Region Evgeny Savchenko, Chairman of the Commission on the Prices and Tariffs State Regulation in the Belgorod Region Valentin Kolodezny, and General Director of IDGC of Centre, JSC  Evgeny Makarov.

Recently the Administration of the Tver Region held a business meeting at which representatives of IDGC of Centre, JSC , Governor of the Tver Region Dmitry Zelenin and representatives of the Regional Power Commission  discussed RAB project implementation on the territory of the Tver Region.

According to the experts' opinion (that was discussed at the meeting), the largest grid company in the Tver Region is ready to introduce RAB. The consortium of the companies including JSC  "Deloitte & Touche CIS" and "Business Problems Institute" ltd carried out estimation of the invested capital. On the basis of the appraisers' report, together with distribution grid companies,  the calculation of tariffs by  the invested capital method was prepared and sent for consideration to the  Federal Tariff Services (FTS) . Tariff calculation is based on the long-term investment program of electric networks development and reconstruction till 2011.

All these actions are directed at development of the Tver power, and thus the region's economy, strengthening of reliability and quality of electric power supply. The RAB implementation is expected to be followed in 2011 by decrease in the equipment wear and tear to 50 %.

"One of the main aims of the power industry was attraction in the industry of investments, first of all, private ones", Director of "Tverenergo", an IDGC of Centre, JSC subsidiary, Sergey Yolkin said. "The serious investor understands quite well in what he puts money, what he needs for  the project performance and what he wants to receive in five or seven years. Our task is to provide him or her in time with the wanted capacitiesЃc We plan not to make wishes of an investor but to increase multiply capacities on the given territory, that, naturally, requires construction of power facilities that can support these actions. We start to develop the power economy of industrial zones when the future consumers are just engaged in design works. We understand that we should be at least one step ahead the investor, because investments go where conditions for their investment are created. RAB implementation in Russia is an absolutely new method which was successfully tested and accepted in many developed countries. It assigns certain obligations and asks much of the companies: it has requirements on reliability, quality, and efficiency. This allows to provide balance of interests of the investors investing in the infrastructure and consumers."

We would like to remind that the new tariff regulation system is aimed to solve the main problem of the grid complex - attraction of money for its development that will satisfy the growing needs of the Russian economy.

The proposed tariff design system, or RAB-regulation, will operate on the basis of long-term regulation of tariffs for electric power transfer, promoting attraction of investments for modernisation and expansion of the distribution grid complex, decrease of wear and tear and obsolescence of electric networks facilities, reduction of capacity deficiency and increase of quality and reliability in power supply of consumers.

With use of the RAB method, tariffs will be established for three to five years, and that makes investment conditions  predictable, and thus  attractive. So, the new tariff design system will be useful for both powermen and  electric power consumers.

Introduction of the new tariff design system in the pilot regions will not entail change of the electric power tariffs established in these regions for 2008.