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Information and Communication Department of the Secretariat of the CMU: Gov't will not endorse RAB formula for tariffs drafted by the NCSREPU
24.01.2018 | 16:36
INFORMATION AND COMMUNICATION DEPARTMENT OF THE SECRETARIAT OF THE CMU

The introduction of stimulating tariff regulation, so called RAB (Regulatory Asset Base) formula for regional energy companies is an exclusive prerogative and competence of the National Commission for State Regulation of Energy and Public Utilities (NCSREPU), which is an independent regulatory body for tariffs setting. The Government bears no relation to the adoption of the said decision or to its publication.

Under existing legislation, the publication of the decision adopted by the NCSREPU in the government newspaper "Uriadovyi Kurier" (Government Courier) is obligatory and for this purpose the Government's approval is not required.

As regards the said issue the Cabinet of Ministers of Ukraine supports the idea of stimulating tariff formula, which envisages attraction of additional investments for the construction and modernization of the infrastructure of electric grids and stimulating the cost effectiveness of electricity distributing companies. However, the Government does not back the form of the decision in which it was adopted by the National Commission for State Regulation of Energy and Public Utilities, and this position has been repeatedly voiced publicly.

The equal earnings yield to the tune of 12.5 % set by NCSREPU both for the former and new assets will lead to groundless increase in tariffs for industry, which will directly affect consumers through rising prices for goods and services. In this context, the Government calls on the National Commission for State Regulation of Energy and Public Utilities to reconsider its decision and make RAB formula more reasonable.

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