FAS asks representatives of the authorities and experts to discuss changes to regulatory acts on the electric power industry

The Antimonopoly Service drafted a number of orders (1) to factor compensation of technological connection costs and the interest for installment payment in the tariff.

Connecting new nuclear and hydroelectric power stations to the United National Power Grid frequently costs dozens of billion RUB. Such conditions constitute a considerable financial burden for the market participants since it seems impossible to pay such funds as a lump sum, while if included in tariffs it will lead to an abrupt growth of the electric power costs which would be translated to all consumers. “This situation is unacceptable”, points out Deputy Head of FAS Vitaly Korolev. “Thus, a mechanism was formed associated with payment for such technological connection, in installments, for the period of ten years at 6% annual interest. The measures are formalized in a Decree of the Government of the Russian Federation (2)”.

Draft FAS Orders are designed to enforce the above requirements.

The Antimonopoly Service enforces the Order of the Federal Tariff Service that establishes the Procedure (3) for determining the prices on generating facilities capacity. Situations emerge on the wholesale electric power market when due to some objective reasons generating facilities were unable to bring in capacities within the scheduled time limit, while fines formalized for such generators for failure were disproportionally high for market participants, which ultimately can worsen significantly the financial situation of electric power generators. The Government made a decision to adjust fines. The Ministry of Energy suggested reducing the fines for the first year to 1%, for the second year - to 10%, to maintain financial stability of companies and avoid bankruptcies of the wholesale electric power market participants.

FAS agreed with the proposal of the Ministry of Energy of and drafted a relevant order in agreement with the Ministry of Economic Development.

Reference:

¹ – On making changes to the Regulations on determining price for the capacity of newly commissioned nuclear and hydroelectric power stations (including, hydroaccumulating electric power stations), approved by No. 486-e Order of the Federal Tariff Service of 13.10.2010 (http://regulation.gov.ru/p/61270);

- On making changes to the Formulae for indexing regulated prices (tariffs) for the electric power (capacity) used in the electric power (capacity) buying-and-selling contracts, the procedure for applying them, as well as the Procedure for setting targeted and factual indicators used in the formulae, approved by No. 210-e/1 Order of the Federal Tariff Service of 28.08.2014 (http://regulation.gov.ru/p/61268);

-  On making changes to the Guidelines on estimating tariffs for electric power and capacity under the buying-and-selling contracts at regulated tariffs (price), approved by No. 199e /6 Order of the Federal Tariff Service of 15.09.2006  (http://regulation.gov.ru/p/61172).

² No. 1265 Decree of the Government of the Russian Federation “On the Procedure of setting the technological connection fee of newly commissioned facilities for generating electric power at nuclear and hydroelectric power stations (including, hydroaccumulating electric power stations) to the facilities of the United National (All-Russian) Power Grid” of 30 November 2015.

³  No. 73e Order of the Federal Tariff Service “On approving the Procedure for determining capacity price for the generating facilities of the participants of the wholesaled electric power (capacity) market that concluded a contract for capacity provision but did not commission at least one of the generating facilities specified in the contract within more than 12 calendar months after the deadline specified in the contract” of 21.03.2011 (http://regulation.gov.ru/p/59289).