The Russian government has approved new regulation for electricity grids tariffs, the Federal Tariff Service said Friday.
The new regulation will introduce the long-awaited by investors regulatory asset base approach, or RAB-based, instead of the current primitive cost-plus approach to grid tariffs. The government initially planned to do so Jan. 1, 2008.
The RAB-based approach implies a fairer valuation of the assets, with new tariffs including operating costs and a return on assets, which would be necessary for the companies to cover their costs. Tariffs would be set for between three years to five years.
The first step in implementing this approach was made when 72 local grid companies were consolidated into 12 interregional grid companies, or MRSKs, several of which have already started trading on local exchanges.
According to the decree, pilot RAB-based approach projects will be launched for five regional grid companies starting from July 1.
In 2010, all electricity distributors will switch to the RAB-approach, including the Federal Grid Co., or FSK .
The FSK - whose market capitalization is expected to be $24 billion when it starts trading - manages Russia's electricity power grid, provides services related to the electric power wholesale market and carries out investment programs to develop the electricity power grid. Its shares will start trading several months after former monopoly RAO UES (EESR.RS) ceases to exist July 1. The Russian government will remain FSK's majority shareholder.
The document was signed by Russian Prime Minister Vladimir Putin Wednesday, the tariff service said.
That was when he said in a statement, released late in the evening, that he expects the energy ministry to remove limitations on the development of the country's electricity sector, to ensure the fulfillment of rapidly growing demand for electricity and guarantee reliable energy supplies.