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The article focuses on the effectiveness of the distributed generating sources development as an economic choice of consumers under the existing electricity tariff regulation system in the regions of Russia. The existing impact of cross-subsidization in the distribution grid tariffs on the cost of electricity supply for the different types of industrial, commercial consumers and households is assessed and compared with the alternative levelized cost of supply from the local gas-fired generating sources. The paper also considers the profiles of the economically optimal grid tariff and electricity retail price structure and estimates the changes in the reasons to invest in the distributed generating sources for the same types of consumers – as well as for the households and municipal sector. Considering the set of regions, the paper provides an analysis of how the investment decisions at the retail level of the electricity market are sensitive to the tariff regulation policy. Keywords— tariff regulationt; regulation policy; crosssubsidization; electricity retail price; economic choice; distributed generating sources; investment decisions; levelized cost of electricity

Impact of Grid Tariffs on the Competitiveness of Distributed Generating Sources in the Regions of Russia