Russian Grids could see lost revenue of 600 bln rubles in 2015-2017 – Demin

MOSCOW. Sept 24 (Interfax) – OJSC Russian Grids (MOEX: RSTI) is estimating lost revenue in 2015-2017 at 600 billion rubles, First Deputy CEO Andrey Demin said at a meeting of the State Duma Energy Committee in Moscow on Wednesday.

“The forecast size of lost revenue will reach 600 billion rubles,” he said, adding that this could occur if proposals are not approved for lost revenue compensation.

This concerns extending subsidies for the North Caucasian Federal District, as well as prolonging “last mile” agreements and increasing the growth rate of tariffs in several regions. Demin said there were 10 of such regions. There is also a problem of “concessional” grid connection and the switch from payments on contracted capacity to payments on actual capacity with consumers.

He emphasized the problem of limiting the growth rate of tariffs and accumulated “smoothing,” which cannot be compensated under current conditions. Demin said that smoothing described the process of moving portion of necessary gross proceeds from the current regulation period to a later one that includes the rate of return on new capital.

To resolve these problems, Russian Grids is suggesting a single organizational structure to manage grids under a single tariff. “A new level of management automatically resolves the issue of ‘last mile,’” Demin said.

The company estimates the minimum annual effect of creating a single company at around 35-40 billion rubles.

As reported, Russian Grids suggested creating a single operating company on the basis of all assets and moving subsidiaries to a single share. A single tariff is planned to be implemented for main transmission networks that are part of the unified energy system, as well as distribution network. The tariffs in various regions would also be leveled. Russian Grids also suggested that the company receive certain functions as a regulator.

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