NERC cancels Oblenergos’ charge for new consumers’ network connection

According to Valeriy Kalchenko, head of the National Electricity Regulatory Commission, on August 29 the commission canceled its decrees of December 14, 2005 and July 19, 2007 that calculated charges for connecting electricity assemblies to networks. The NERC’s decision will come into force after registration with the Ministry of Justice. According to the NERC, the Cabinet of Ministers and the Ministry of Justice recommended cancelling the network connection charges. Alexander Paraschiy: This news is slightly negative for Oblenergos, who used charges from the connection of new consumers to power networks as a source of CapEx. Though, as revenues from network connection account for less than 5% of Oblenergos’ planned CapEx sources for 2008, we do not expect any visible decrease in Oblenergos’ investment programs this year. We believe that network connection fees will be restored in the mid-term, after solving all the legal disparities that have hampered implementation. Connection charges are actively used in Russia, and are an important source of financing network expansion.