OREANDA-NEWS. On 17 July 2008 was announced, that the RF Federal Tariff Service Has Published Official Tariff Calculation Methodology for Power Companies under the Principle of Guaranteed Return on the Asset Base (RAB).

This methodology establishes rules of definition of necessary proceeds and tariffs for distribution, including calculation of return on the invested capital, rules of definition of assets cost  and the amount of the invested capital. Under the new methodology  during the first long-term regulation period 30 % of investments into energy distribution system will be financed by the credit,  70% will be financed by equity funds.

The final term of the investments return is set at 35 years. For first period the Federal Tariff Service establishes various norms of profitability on the new invested funds and previous investments. After termination of the first period the norm of return on both types of the capital will be the same. The new methodology also establishes the norm of efficiency based on the comparative approach.

According to the analysts and experts, this is positive news for  distribution companies, as RAB  methodology implementation reduces  risks connected with the new tariff system performance and creates a basis for RAB implementation in 2009 in a greater number of regions with transition of all IDGCs to RAB system in 2010 and 2011. Transparent rules will make the shares of the distribution companies more attractive for the investors; this will influence positively the value estimation of  the distribution companies and "IDGC Holding".

"We think that the current prices of shares of the distribution companies offer to the investors good possibility for their purchase Ї the cost of IDGC's securities must increase within the next two to three months." Taken from http://iguru.ru/shares/show.aspx? id=19788.