Article 16. Costly method of tariff regulation of the Law on Natural Monopolies

Home / RLA / Article 16. Costly method of tariff regulation of the Law on Natural Monopolies

1. The tariff using the cost method of tariff regulation is approved by the authorized body for a period of five years or more by determining economically reasonable costs and profits.

2. The costly method of tariff regulation provides for:

1) limitation of the types and amounts of costs included in the tariff, taking into account their economic validity;

2) the application of technical and technological standards for the consumption of raw materials, fuel, and energy, if any, standard technical losses, and the standard number of personnel, determined on the basis of standard standards and regulations in force in the relevant industry (sphere);

3) approval of the tariff estimate by year;

4) application of the straight-line depreciation method;

5) procurement by a natural monopoly entity in accordance with article 23 of this Law and the rules governing the conduct of activities by natural monopoly entities;

6) determining the acceptable level of profit, taking into account the book value or overvalued value of the assets of the natural monopoly entity involved in the provision of regulated services, and the profit rate calculated according to the method determined by the authorized body, and the amount of funds needed to implement the approved investment program;

7) approval of the investment program;

8) approval of a temporary compensating tariff for non-fulfillment of cost items of the approved tariff estimate, misuse of depreciation funds and activities of the approved investment program.

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Republic of Kazakhstan

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