4 Oct 2010 15:58

Tariff service sets RAB rate of 10% for Russian grid co in 2013-2014

MOSCOW. Oct 4 (Interfax) - The Russian Federal Tariff Service (FTS) has set a rate of return on newly invested capital of 10% for the Federal Grid Company (FGC) in 2013-2014 during the five-year RAB regulatory period.

The Justice Ministry registered the relevant amendments to the FTS instruction on September 28.

Return on capital invested prior to the long-term regulatory period ("old capital") is 7.8% in 2013 and 9.1% in 2014.

The rate of return for the first three years of the regulatory period is 11% annually for new capital. For old capital, it will be 3.9% in the first year, 5.2% in the second and 6.5% in the third year.

The FGC switched to RAB or Regulated Asset Base pricing on January 1, 2010, initially with a three-year regulated period for 2010-2012. The FTS in the summer of this year approved the possibility to extend the regulated period on a 3+2 principle with a switch to a five-year period for the FGC and the regional grid operators.

The FGC has drafted an investment program costing 954 billion rubles for the period 2010-2014 with the five-year regulated RAB period in mind. The program was due to have been approved by August 15, but this was put back.

The commission chaired by First Deputy Prime Minister gave its general approval to a five-year investment program costing 950 billion rubles by the FGC, the company's chief, Oleg Budargin, told reporters on September 27. The FGC expects the government to reach its decision soon, he said.

Budargin said the program was based on a figure of approximately 190 billion rubles per year in 2010-2014. He said the FGC would revise the ratio of investment in renovation to investment in new construction. The FGC is currently spending around 60 billion rubles a year renovating old assets, but plans to invest up to 100 billion rubles per year in renovation in future.