OREANDA-NEWS. November 9, 2012. Federal Tariff Service of Russia (FTS) approves proposals of Russian regional executive bodies responsible for state tariff regulation concerning transition of tariff regulation of JSC "MOESK" and several other territory grid organizations for electric power transmission services to return on invested capital method (RAB regulation).

"In general JSC "MOESK" is satisfied with the decision of the regulating authorities as established long-term parameters of RAB regulation let the Company leave unaltered investment and strategic plans, moreover some of them were improved in comparison with January 1st, 2012", – says Mr. A. V. Inozemcev, General director deputy for economy and finance.

According to Russian Government Decree dated December 29th, 2011 No. 1178 regulative authorities established long-term parameters of RAB regulation coming into force since November 1st, 2012. Joint operator tariffs for end users and tariffs of territory grid organizations remained steady. In terms of RAB "reset" FTS of Russia recommended reduction of OPEX effectiveness index in order to achieve effective OPEX level. Relevant decisions were made by Russian regional regulative authorities.

It is worth mentioning that JSC "MOESK" OPEX basic level either in relation to Moscow or Moscow Region was revised by the regulative authorities taking into account joining "New Moscow" territories to the capital and was raised accordingly to Methodology instructions on tariff regulation with application of return on invested capital method against the level as of January 1st, 2012. OPEХ value before the end of first long-term regulation period is subject to annual adjustments due to consumer price index and power grid assets changes. Annual savings of expenses achieved by the Company during the long-term regulation period is included into gross revenue requirement within 5 years.

Invested capital value in relation to Moscow and Moscow Region established by the regulative authorities shows positive dynamics and includes commissioning of power grid objects and joining "New Moscow" territories.

Moreover it is worth mentioning that gross revenue requirement growth exceeds consumer price index forecast stated by the Ministry of Economic Development of the Russian Federation for 2012.

JSC "MOESK" invested capital rate of return is one of the highest among other subsidiaries of JSC "IDGC Holding". Determined rates of return make it possible to compensate investment projects. It should be mentioned that tendency of reduction of technological losses which is extremely effective for realization of Energy conservation and increased energy efficiency program may prompt tariff decreasing.

Long-term RAB parameters of JSC "MOESK" approved by FTS of Russia (Order dated November 12, 2012 No. 234-e/1) for purposes of "reset" from November 1st, 2012 and during 2012-2017 and gross revenue requirement determined by Russian regional regulative authorities.