On the 4th of February JSC IDGC Holding’s Director General Nikolay Shvets spoke at a round table on Grid and Generating Companies: Regulation and Free Market – Things to Do in the scope of the Russia 2010 Investment Forum.

Nikolay Shvets outlined the outlooks of interregional distribution grid companies of IDGC Holding switching to RAB tariff regulation. He said that year 2009 had witnessed the reliability of the regulation method, while the “risks proved to be minor”.

IDGC Holding’s Director General reminded that 9 regions serviced by subsidiaries and dependent companies (SDCs) of IDGC Holding adopted RAB tariff regulation from the 1st of January 2010. Thus, he said, the number of regions that switched to RAB reached 17.

8 regions covered by SDCs of IDGC Holding adopted RAB from the 1st of January 2009.

Nikolay Shvets informed that IDGC Holding was happy with the regulation parameters approved by regional tariff authorities.

According to the Company’s Director General, the amount of initial assets for regions that already switched to RAB regulation was 166 billion rubles.

“We are currently working on amendments to our regulatory legal documentation to allow the remaining 52 companies of IDGC Holding to switch to the new pricing method in two steps: from the 1st July 2010 and from the 1st January 2011, but already to a five-year regulation period”, said IDGC Holding’s Director General.

Nikolay Shvets said that the Company’s objective until 2030 was to cut down electricity losses in distribution grids from the current 12% to the global level of 5% to 6%.

The Company’s Director General explained the high level of losses by unsatisfactory technical state of the system currently operated by the Company. The service life of 52% of the equipment has already expired, and over 7% of that equipment has been already operated for a period covering two service lives.

Nikolay Shvets said that “implementation of RAB regulation became the first material step in creating a new efficient distribution grid system in the country”.