Talk about raising electricity tariff as a result of implementation of RAB – manipulation and speculation – hryhorivs’ka

The President of the Association of operators of electricity distribution networks Vitaliy Grigorovsky said that the introduction of RAB-regulation will reduce the overall price. Photo: Ukrainian News

The TV channel “112” on 6 February, the President of the Association of operators of electricity distribution networks Vitaliy Grigorovsky called the manipulation of public opinion and speculation talking about the fact that the introduction of incentive tariff will lead to catastrophic increase in the overall electricity tariff.

The expert explained that in the first three years of the introduction of this system, “indeed, may occur in the range of 5-10% increase of the tariff, but not the overall electricity tariff and distribution tariff”, which in the structure of the General rate in Ukraine is 8%.

Then, as can be seen from the example of countries that have already implemented RAB-regulation, in particular the UK, after 6 years, the distribution tariff decreased by more than 20%, and after 15 years more than doubled.

Hryhorivs’ke sure: “If the system will be implemented in Ukraine, and, accordingly, if the Ukrainian regulator is in their practices follow the best practices in European countries, USA, Canada, some other countries, actually RAB tariff will lead to lower overall tariff”.

We will remind, the national Commission drafted legislation for the transfer of energy companies to RAB regulation in July 2017. In January of 2018, the decision was published, opening the possibility for the transition of regional power on the system.

Incentive regulation is a tariff mechanism based on long-term regulation of tariffs (3,5 or 8 years). This method is aimed at attracting investments for construction and modernization of infrastructure networks that transmit energy (electricity, thermal energy, etc.), and promote efficiency of cost of distribution (supply) companies.

In the mid 1990-ies to RAB-regulation have moved most of Western Europe, Canada, USA, Australia. The European Union in 2002 ordered the countries of Eastern Europe to apply RAB in the establishment of tariffs for monopolies, and to RAB-regulation has passed Czech Republic, Slovakia, Hungary, Poland, Romania, Bulgaria and several other States.