Financing: USAID Energy Security Project (USAID ESP)/ TETRA TECH

Role of MDI Ltd.: Project implementer

Project implementation period: April 2021 – November 2022

The tasks of USAID ESP include promoting competitive energy markets, facilitating European integration, strengthening energy independence, facilitating renewable energy development, supporting empowered sector regulation, increasing public trust and ensuring environmental and social responsibility.

Within the Project, financed by USAID ESP, MDI Ltd. will assist NEURC in improvement of the incentive-based tariff formation framework.

Project goal and objectives:

The overall objective of this assignment is to provide support to the National Energy and Utilities Regulatory Commission (NEURC) to improve tariff formation&setting regulatory framework in the area of district heating i.a. with regard to the Incentive Based Regulation.

This includes the following tasks:

• provide support in improving DH tariff regulation (“cost+”) and drafting relevant amendments to the effective regulatory framework
• provide support in elaboration of the package for thermal energy generation tariff regulation, which is applicable to both boilers and co-generation facilities, and fairly allocates costs between power and thermal energy, and incentivizes efficient generation/cogeneration
• provide support in improvement and application of the regulatory Incentive based (RAB) tariff framework for thermal energy transport
• provide support in developing of the regulatory rules and procedures to implement Incentive based (RAB) tariff regulation in thermal energy generation
• provide analytical and legal support in resolving issue of fuel norms and electricity norms within the effective (cost+) methodology and in review of the Rules of TE Use
• provide support in revising framework for long-term investment planning in DH

Upon ESP’s request due to the Russian invasion of Ukraine the implementation of Project tasks according to Project Work Plan was put on hold in early March 2022. At the same time, MDI continued to finalize the tasks whose implementation had started before February 24, 2022.

Project events:

March 25, 2021       Kick-off meeting held

April 1, 2021             Project start date