The state service for regulatory policy and entrepreneurship development of Ukraine has agreed a draft order of the Economic Development and Trade Ministry of Ukraine on fixing the upper limit of the regulatory requirement for income in the area of power transfer using local power lines and electricity supplies under the regulated tariff at 14.79%.
As reported, law No. 4998-VI on the introduction of the Regulatory
Asset Base (RAB) tariffs in the housing and utilities sector was passed
by Ukrainian parliament in 2012.
In keeping with the document, tariffs for natural monopolies will be
set with due regard to long-term parameters – the regulatory asset base,
the rate of return, the quality of commodities, spending in keeping
with international financial reporting standards (IFRS), and other
parameters.
The law foresees a gradual transfer from the current cost-plus tariff setting model to the new system.
A state regulator (The National Commission for Energy Regulation or
the National Commission for state regulation in the utilities sector) is
to decide on the transition by specific companies to the new system,
which is intended to encourage companies to reduce ineffective spending,
improve the quality of services and bring investment into the sector.
According to the authors of the law, the introduction of the new RAB
system will stimulate natural monopolies in reduction of non-effective
expenses, increase in the quality of goods and will allow attracting
investment in the relevant sectors.
