OREANDA-NEWS. September 10, 2012. The Tariff Regulation Administration for the Murmansk Region has submitted an application to the Federal Tariff service for regulation of Kolenergo branch of IDGC of the North-West, JSC to be switched over to RAB method already in 2012. According to the explanation given by the Investment Department of IDGC of the North-West, switchover to RAB will entail increase of the amount of Kolenergo 2012–2017 long-term investment program from 1,853.6 mln RUR to 3,897.8 mln RUR i.e. by a factor of 2.1.

“Switchover to regulation using the Return On Investment method will enable increase of funds invested in development and modernization of energy infrastructure regionally; the amount of 2012 investment program of the RAB-regulated branches exceeds depreciation allowances three times,” says Head of the Investment Department of IDGC of the North-West Mariya Yegorova.

Arkhenergo branch of IDGC of the North-West, JSC has sent a letter to the Agency for Tariffs and Prices of the Arkhangelsk Region suggesting switchover to RAB in 2012 with all the documents and calculations required appended thereto. Regulation of tariffs for electric energy transmission services by the Return on Investment method is meant to be applied during the period of 2012–2017. As far as the current year is concerned, the investment program volume will remain unchanged.

“Switchover to RAB regulation is aimed at enabling increase of the branch 2012–2017 long-term investment program. In case of switchover to the new progressive method Arkhenergo investment program may be increased by 812 mln RUR which will enable reconstruction and new construction of electric power grid complex for technological connection of consumers’ power units including residential construction facilities and socially significant facilities,” comments Deputy Director for Economy and Finance of Arkhenergo branch Andrey Zubkov.

2012 investment program of the three RAB-regulated branches of IDGC of the North-West (Vologdaenergo, Novgorodenergo and Pskovenergo) exceeds that of the other four branches by a factor of 1.8 accounting for 64% of the Company’s total investment program. 6 out of the 9 major projects of the current year including those dealing with power generation output are being implemented in the regions having chosen to adopt RAB regulation.