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14 Apr 2011 08:47
Adjustment of the transmission tariffs
Federal Grid Company of Unified Energy System ("Federal Grid" or the "Company", ticker FEES on MICEX, RTS and LSE).
Moscow, 14 April 2011 - Federal Grid notes that Federal Tariff Service, Russian national regulator, ("FTS" or the "Regulator") has adjusted the tariffs that the company is allowed to charge its customers over the period of 2011-2014. The tariffs are adjusted under the RAB methodology, which provides for the possible redistribution of tariffs and resulting gross revenues within the 5-year regulation period between 2010 and 2014.
The RAB Methodology Guidelines approved by FTS in June 2008 provides that the Regulator is entitled to redistribute gross revenues of regulated businesses between years within a single regulatory period.
According to the FTS decision, the tariff growth for the remaining 9 months of 2011 compared with 2010 will be 15.7 percent for the republics of North Caucasus and Stavropol Region, and 26.5 percent for all other regions of Russian Federation. The changed tariffs come into effect from April 1, 2011.
The Regulator has ruled that during the remaining 3 years of the regulatory period the tariffs will continue to grow steadily at a 26.4 % in 2012, 26.3 % in 2013 and 26.3 % in 2014 growth rates.
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Andrey Kazachenkov, Chief Financial Officer of Federal Grid, commented:
"It is important that these changes will not affect the overall planned tariff revenues for the regulatory period from 2010 to 2014, and the minor adjustment is made within the agreed RAB regulatory framework. Also redistribution of the tariffs within a 5 year regulation period will not affect the scope and implementation terms of the approved investment programme, including our flagship projects of smart grid and network modernization".
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About Federal Grid
Federal Grid is the operator and manager of Russia's unified electricity transmission grid system. With over 121,000 km of transmission lines and over 305 GVA of installed transformer capacity, it is the largest publicly traded electricity transmission company in the world.
Federal Grid's business is to provide transmission and connection services to the Russian wholesale electricity market. It maintains and develops the grid system and supervises grid facilities and infrastructure in 73 regions of Russia, in which it operates. Its customers are regional distribution companies, retail electricity supply and large industrial enterprises. The Company operates in an exclusive, competition free environment, and is regulated by the Government of the Russian Federation.
The Company's revenue is mainly driven by the transmission tariff set by the Regulator, the Federal Tariff Service. From 1 January 2010 a new RAB (Regulatory Asset Base) tariff framework, designed to stimulate investment and operating efficiency, was introduced.
The Company was incorporated in 2002 as part of reorganization of Russia's electrical power industry. The Russian government is the largest shareholder with a 79.48% stake.
Further information can be found at www.fsk-ees.ru/eng.
Neither the content of the issuer's website nor the content of any other website accessible from hyperlinks on the issuer's website is incorporated into, or forms part of, this announcement.
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