3.2.8 Tariff Policy

Electricity transmission tariffs

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In 2022, the regulators applied the return on invested capital method (RABregulatory asset base) to Sverdlovenergo and method of long-term indexation of the gross revenue requirement (INDEX) to Permenergo and Chelyabenergo.

Uniform (“pie”) tariffs comprise expenses of all grid companies operating in the region to be annually prescribed for the next year during the long-term regulation period. Pursuant to existing tariff regulation laws, a gross revenue requirement is subject to annual fine-tuning, adjusted for changed real and target calculations, executed investment program and achieved reliability and quality of service indicators. Uniform (“pie”) electricity transmission tariffs to be enforced in 2022 were approved by the tariff decisions of the relevant regional regulators^[11-13].

Uniform (“pie”) electricity transmission tariffs for 2022 were set by the regulators in line with the FASFederal Antimonopoly Service-approved minimum and maximum levels of tariffs.

OAOOpen Joint-Stock Company IDGCInterregional Distribution Grid Company of Urals’ GRRgross revenue requirement composition and its YoYyear on year changes*

Key factors that changed the “pie” gross revenue requirement in 2022 are:
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Analysis of revisions of the average electricity transmission tariff (adjusted for net supply on generator voltage level), RUBruble/kWhkilowatt-hour*

Pursuant to the Guidelines^[14] the regulators of the Perm, Sverdlovsk and Chelyabinsk regions have set the 2022 standardized tariff rates, maximum capacity unit rates  and connection fee formulas.

The regulators of all the regions have set a privileged RUBruble 550.0 (plus VATvalue-added tax) connection fee for all Company’s branches to be applied to applicants, requesting connection of grid equipment with the capacity of 0-15 kW inclusive (incl. previously connected capacity at the point), when facilities, referred to the 3rd reliability category (from one source of electricity supply), are connected, provided that the distance between the boundaries of an applicant’s land plot and Company’s facilities at 20 kV inclusive does not exceed 300 m in urban areas (cities and small towns) and 500 m in rural areas. The 2022 connection fees are approved by the decisions of the regulators^[15-17].

In 2H2022 the privileged RUBruble 550.0 (plus VATvalue-added tax) connection fee ceased to be in force according to the legislation. Since 01 July 2022, pursuant to the decree^[18] the regulators approved privileged connection fees for 1 kW of requested capacity for applicants, stipulated by the Rules^[19], requesting connection of grid equipment with the capacity of 0-15 kW inclusive (incl. previously connected capacity at the point), connected to grid facilities of the grid operator at 0-0.4 kV, provided that the distance between the boundaries of an applicant’s land plot and nearest facility of required voltage class, owned by the gridco to which an applicant submitted its request, does not exceed 300 m in urban areas (cities and small towns) and 500 m in rural areas and microgeneration facilities.

Besides, the connection fee for underprivileged citizenry (low-income citizens, veterans, disabled people, etc.), provided that the distance between the boundaries of an applicant’s land plot and facilities at 0-0.4 kW, owned by the gridco to which an applicant submitted its request, does not exceed 300 m in urban areas (cities and small towns) and 500 m in rural areas, was set at RUBruble 1,000 / kW (incl. VATvalue-added tax).

The Company’s average connection fee per capacity unit, as compared to 2021, increased in 2022 mainly due to reduction of connected capacity and growth of construction volumes per capacity unit and indexation of standardized tariff rates for grid construction. Still, there is a reduction of average rate S1 due to revisions^[23] in calculation of the rates, with effect reflected on the calculation of S1 rates in 2022. No resolutions on connection to the Company’s networks under individual projects were made during 2022.