13 Oct 2009 14:44

MRSK expects tariffs on distribution grids to rise 15%-20% in 2010

MOSCOW. Oct 13 (Interfax) - MRSK Holding, which manages interregional distribution companies in Russia, expects tariffs on electricity transmission on distribution networks to rise 15%-20% on average in 2010, company head Nikolai Shvets told Interfax.

"We expect average growth of 15%-20% within the general tariff," he said. The general tariff will rise 8% overall in 2010.

MRSK is currently preparing for a switch to the Regulated Asset Base (RAB) method, which focuses on the return on invested capital.

In the coming two weeks (until November 1) a valuation of MRSK assets will be completed in order to make the switch to RAB.

Shvets recalled that the ratio of the value of capital to fixed assets will be in the range 1.8-3 depending on the individual distribution grid company, according the management estimates.

The switch to RAB is planned for 2010. Shvets expects the tariff to be regulated for a five-year period. The scenario parameters for the switch to RAB set the yield on "new" capital at 12% throughout the regulation period. Yields on "old" capital are 6% in 2010, 9% in 2011 and 12% in 2012-2014.

The provisional estimate of MRSK's initial capital base is 1.2 trillion rubles ($37.5 billion).