Investments in heating

FAS found the wayto make heat supply attractive for investors

The Chairman of the Government of the Russian Federation Dmitry Medvedev signed a Decree, which will change an approach to tariff-setting in heat supply. The amendments are designed to improve the saving mechanism implied in the tariffs, attract investments, enable a transition to better types of fuel in terms of energy saving and efficiency without increasing tariffs.

The Decree was drafted by FAS. According to Deputy Head of FAS Vitaly Korolev, it is based on the “tariff in exchange for investment” principle.

“One of measures is to keep savings by heat suppliers. Such savings are formed as a result of replacing the type of fuel”, continued Deputy Head of FAS Vitaly Korolev. “Prior to the amendments, organizations were not always interested in transition of the sources of heat energy  to a different, often cheaper type of fuel since the difference in the final fuel costs was not factored in when estimating the savings”.

Alexei Matyukhin, Head of FAS Department for Regulating Housing & Utilities Sector, added: “The amendments will enable companies keep the saved funds for five years which will stimulate their transition to other types of fuel, searching possibilities to cut the costs, and ultimately enhance efficiency. In our opinion, in the future such measures will have a positive effect upon consumer tariffs”.

Reference:

¹ No. 54 Decree “On making amendments to some acts of Government of the Russian Federation” of 24.01.2017