Tariff Regulatory Reforms for the Federal Grid Company, Russia
When: December 2005 to April 2007
Client: Fichtner GmbH & Co. KG, Stuttgart, Germany
Ultimate clients: European Bank for Reconstruction and Development (EBRD)
Federal Grid Company (FGC), Russia
Federal Tariff Service, Russia
I was engaged as the tariffs expert on this project conducted for the EBRD as part of its due diligence for a loan to the FGC, which owns and operates the high voltage power system across Russia. My involvement in the project entailed:
The above work provided a basis for the possibility of further EBRD assistance in the area of electricity tariff reform for transmission services in Russia.
- Conducting interviews with relevant government agencies such as the FGC and relevant Russian regulatory authorities.
- Review and analysis of the existing tariff structure of the FGC with respect to international best practice.
- Analysis of the effectiveness of current Russian regulatory mechanisms.
- Outlining possibilities for adopting a cost-of-service methodology having a return on equity component based on the capital asset pricing model, as well as incorporating incentives for performance improvement in areas of reliability, losses and operating costs.
- Assessment of institutional, technical, financial and legal constraints that would need to be removed to achieve tariff reform.
- Leading a workshop in Russia to discuss the above issues