Anatoly Golomolzin: the “inflation minus” principle will be formalized in the pricing technique

On 21 July 2017, the Methodological Council of the Federal Antimonopoly Service on Tariff Regulation discussed some pressing issues

The first item on the agenda concerned FAS proposals on developing the methodology of ceiling tariff-setting. The key speaker was Deputy Head of FAS Department for Regulating Communications and Information Technologies, Olga Klimova. As an example, she took the telecommunications market – a sector, where changes are the most dynamic and that is a priority for introducing the modern tariff-setting methods.

Olga Klimova analyzed the current method of tariff regulation, including the ceiling tariff-setting designed to enhancing efficiency of the current and prospective operations of regulated companies in view of the general conditions for economic development. The “inflation minus” method, traditionally declared by FAS belongs to this category of ceiling pricing.

“The base tariff level and the factor of amending the tariff in line with this method can be determined strictly quantitatively. To this purpose both internal indicators of economic activity of the regulated organizations as well as the general national economic trends, estimated using GDP changes are applied”, emphasized Olga Klimova.

The participants agreed to consider the pricing method at the next meeting of the Methodological Council, and to draft proposals in view of the discussion to account approaches on different methods of tariff regulation under the frame of a relevant draft law.

The second item on the agenda related to specifics of registering depreciation costs of regulated organizations if granting subsidies from the budget. Deputy Head of FAS Anatoly Golomolzin pointed out: “It has its own specifics with regard to operations of companies with different organizational-and-legal forms, particularly, companies with state and private participation, and should be reflected in the tariff-setting method”.

Then Deputy Minister of the Russian Federation for Communications, Mikhail Yevraev, gave assessment of the costs for connecting regulated organizations to the State Information System of the Housing-and-Utility Complex.

“Using the State Information System of the Housing-and-Utility Complex is attractive for both the authorities, who can monitor housing-and-utility services, as well as for consumers, for whom transparency of resource suppliers improves and calculations on the housing-and-utilities services are regularized. The system is also useful for resource suppliers, to enhance efficiency of their work under the emerging digital economy”, said Mikhail Yevraev.

Representatives of resource suppliers requested additional funds. The participants, however, concluded that resource suppliers not only bear the costs but also have benefits from the State Information System of the Housing-and-Utility Complex, and should optimize their costs in line with their efforts towards enhancing operational transparency and offering services with use of digital formats.