FEES.L Regulatory News (FEES)

FTS confirms Federal Grid Company 2012-2014 RAB tariffs

22 May 2012, Moscow - Federal Grid Company of Unified Energy System ("Federal Grid Company" or "the Company") (MICEX-RTS, LSE: FEES), announces that on 21 May 2012 Russia's Federal Tariff Service (FTS) confirmed the Company's regulatory asset base (RAB) tariffs for 2012-2014.

Using regulatory asset base methodology, the following tariffs have been determined for electricity transmission across the unified national electricity grid (UNEG) for all regions of the Russian Federation except the North Caucasus and Stravropol Krai:

For the North Caucasus and Stavropol Krai, the tariffs have been set at RUB 48,540.01, RUB 53,119.60 and RUB 58,124.85 per MW month from 1 July 2012, 2013 and 2014, respectively. Tariffs for electricity transmission in the North Caucasus and Stavropol Krai during the regulatory period will grow by 10.9% in 2012, 9.4% in 2013 and 9.4% in 2014.

Rates of return have been set as follows:

·; on invested capital ("new capital"): 11% in 2012, 10% in 2013 and 2014

·; on capital invested before the start of the regulatory period ("old capital"): 6.5% in 2012, 7.8% in 2013 and 10% in 2014.

The tariffs will ensure the financing of the Company's long-term investment programme as amended by Russia's Ministry of Energy. Implementation of the investment programme will reduce the number of "autonomous" main substations, thus connecting new consumers to the grid; it will also significantly increase the reliability of energy supply to existing customers. In addition, network efficiency will be maintained by bringing into service 50,386 MVA of transformer capacity and 13,147 km of transmission lines by the end of 2014.

Federal Grid Company adopted RAB-based regulation of tariffs on 1 January 2010.

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About Federal Grid Company

Federal Grid Company is the operator and manager of Russia's unified electricity transmission grid system, including high voltage transmission lines, and holds the status of a natural monopoly.

The Company's assets include over 124,000 km of transmission lines and 854 substations with over 322 GVA of 35-750 volt transformer capacity. Based on the length of transmission lines and installed transformer capacity, Federal Grid is the largest publicly traded electricity transmission company in the world.

Federal Grid's business is to provide electricity transmission and technological connection services. It maintains and develops the grid system and supervises grid facilities and infrastructure in 73 regions of Russia, covering a territory of 13.6 million square kilometres. Its customers are regional distribution companies, electricity suppliers and large industrial enterprises.

Since 1 January 2010, Federal Grid has operated under a 5-year regulatory asset base (RAB) model.

The Company was incorporated in June 2002 as part of reorganisation of Russia's electrical power industry. The largest shareholder, with a 79.55% stake, is the Russian Federation Government.

Federal Grid Company's ordinary shares are listed on the MICEX-RTS stock exchange under the ticker FEES and the Company's GDRs are traded on the London Stock Exchange under the same FEES symbol. The Company's shares are included in the MSCI Emerging Markets and MSCI Russia indices.

In 2011 the Company's IFRS revenue for 2011 was RUB 139,571 million (up 23% compared to 2010), adjusted EBITDA as RUB 83,760 million (a 24% increase from 2010), and adjusted net profit was RUB 38,241 million (up 37% on 2010).

Further information can be found at www.federal-grid.com