Kazakhstan Electricity Grid Operating Company JSC (hereinafter referred to as “KEGOC” or “the company”) is a natural monopoly that provide the following regulated services:

• electricity transmission;
• technical dispatching of the electricity supply and consumption in the grid;
• electricity production and consumption balancing.

These services are provided by KEGOC and are regulated in accordance with the Law of the Republic of Kazakhstan “On Natural Monopolies” (hereinafter referred to as “the Law”) dated 27 December 2018 No. 204-VІ ZRK. 

Since 2020 is the last year of the current five-year tariff period for regulated services of KEGOC, the company, in accordance with the Tariffing Rules approved by order of the Minister of National Economy of the Republic of Kazakhstan No. 90 dated 19 November 2019 (hereinafter referred to as “the Rules”), filed on 1 July 2020 with the Committee on Regulation of Natural Monopolies of the Ministry of National Economy of the Republic of Kazakhstan (hereinafter referred to as “CRNM”) an application for approval of the cap tariffs and tariff estimates for regulated services of KEGOC for the next five-year period (2021-2025), and, on 24 June 2020,  an application for approval of the investment programme of KEGOC for 2021-2025 via the Monopolist Base web portal.

The authorized body, when approving the cap tariffs for regulated services, based on the required quality and reliability, shall consider the estimated cost of the regulated services and the profit, that would support effective operation of a monopoly entity.

The CRNM refused to approve the cap tariffs and tariff estimates for regulated services, and the Investment Programme for the next five-year period as per the applications filed by KEGOC.

KEGOC disagreed with the CREM decision (orders No. 66-OD and No. 67-OD dated 23 November 2020), and plans to appeal it in court.

In the meantime, given the expiration of the current tariffs for the services of KEGOC on 31 December 2020, the company will provide regulated services presumably starting on January 2021 based on the following tariffs:

• 2.448 KZT/kWh (exclusive of VAT) for electricity transmission;
• 0.264 KZT/kWh (exclusive of VAT) for technical dispatching of electricity supply to the grid;
• 0.086 KZT/kWh (exclusive of VAT) for electricity generation and consumption balancing.

These tariffs have been set in accordance with the requirements of paragraph 3 of Article 15 of the Law, which requires excluding the costs of the approved investment programme (depreciation and profit) from the current approved tariffs for 2020, with the exception of funds allocated for repayment of the principal debt for the loans raised for the implementation of the approved investment programme.

At the same time, KEGOC, through the Monopolist Base web portal, re-submitted to the CRNM an application for approval of the cap tariffs and tariff estimates for regulated services of KEGOC (on 25 November 2020) and an application for approval of the investment programme (on 26 November 2020) for the next five-year period (2021-2025).

At present, by letter No. 43-1-43 / 6001 dated 27 November 2020, the CRNM informed KEGOC about the acceptance for consideration of the submitted application for approval of the cap tariffs and tariff estimates for regulated services.