ALIGNING THE USEFUL LIVES OF ELECTRICITY NETWORK ASSETS WITH A TECHNICAL CONDITION INDEX AND THE REGULATORY PERIOD

Abstract

This study develops a methodology for aligning the useful lives of electricity-network assets with a technical condition index (TCI) and the regulatory period. For five TCI bands, the framework specifies technical actions and their accounting, tariff and audit consequences; it also establishes rules for overhaul components, decommissioning obligations and pools of mass assets. In addition, the study proposes a model in which the timing difference between accounting depreciation and tariff-recovered depreciation is recognised as a regulatory asset or liability. Applied to Regional Electric Power Networks JSC, the model produces a depreciation timing difference of approximately UZS 153-455 billion, depending on the technical-condition scenario.