3.2.8 Tariff Policy

Electricity transmission tariffs

In 2023, 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 2023 were approved by the tariff decisions of the relevant regional regulators^[13-15].

Uniform (“pie”) electricity transmission tariffs for 2023 were set by the regulators with exceedance of FASFederal Antimonopoly Service-approved threshold levels of tariffs.

PAO Rosseti Ural’s GRRgross revenue requirement composition and its YoYyear on year changes

Key factors that changed the “pie” gross revenue requirement in 2023, RUBruble million

Analysis of revisions of the average electricity transmission tariff (adjusted for net supply on generator voltage level), RUBruble/ kWhkilowatt-hour*

Technological connection fee

Pursuant to the Guidelines^[16] the regulators of the Perm, Sverdlovsk and Chelyabinsk regions have set the 2023 standardized tariff rates, privileged connection rates per 1 kW capacity and connection fee formulas. 2023 connection rates are approved by the regional regulators^[17-21].

Rates for individuals with maximum 0-15 kW capacity inclusive (incl. previously connected capacity at the point) to be connected to 0-0.4 kV grid facilities, provided that the distance between the boundaries of an applicant’s land plot and nearest grid facilities of required voltage, 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 of 0-0.4 kW voltage, 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 1,064 / kW (incl. VATvalue-added tax).

On the whole, increased 2023 average connection cost per maximum capacity unit, compared to 2022, was due to reduced connected capacity and increased physical volume of construction per capacity unit as well as indexation of standardized tariff rates for grid facilities construction. The primary factor of grown average rate S1 (arrangement and technical activities per one contract) is indexation of its components.

Besides, the regulators approved fees for connection to the Company’s networks under individual project, the cost computed with the use of approved standardized tariff rates pursuant to the guidelines. All in all, there were 11 resolutions on setting individual rates worth RUBruble 908 million.

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