Anatoly Golomolzin: Guidelines should be clear and transparent for regulators and companies as well as for consumers

FAS Methodological Council on Tariff Regulation was in session on 9 October.

A representatives of FAS Department for Regulating the Electric Power Industry, Ekaterina Tanaschuk represented a draft Guidelines on calculating sales mark-ups of providers of last resort using the comparative method.

The draft is devised by FAS to implement amendments to No. 1178 Government Decree “On pricing in the field of regulated prices (tariffs) in the electric power industry” of 29.12.2011 and should stimulate performance of power suppliers.

Participants pointed out that the draft required further improvement. In their opinion, the content does not match the title; the draft uses the costs standard principles rather than the comparative method. Preliminary assessments shows that the proposed method may lead to inefficient regulation of the controlled subjects, including a tariff growth by orders, and incorrect separation into tentatively fixed and tentatively variable costs. The costs structure should include costs not mentioned in the tariff application.

Retrospective costs analysis is required for justification and there should be differentiation criteria for the benchmark values regarding the costs incurred by provider of last resort, etc.

“The comparative method is efficient only if applied correctly. The Guidelines should be clear and transparent for regulators, regulated organizations and for consumers. Assessment of service quality, separate income and expense accounting, efficient costs basis, contracting regulation, understanding the prospects of sales deregulating should be taken into account to elaborate on the Guidelines”, emphasized Chairman of FAS Methodological Council on Tariff Regulation, Deputy Head of FAS Anatoly Golomolzin.

The draft Guidelines will be further refined and discussed again at the next session of the Tariff Methodological Council.

Participants of the electric power market, representatives of the regional Energy Commissions of Russian regions (the Sverdlovsk, Altai regions, Tyumen, Khanty-Mansi Autonomous District, Yamalo-Nenetsky Autonomous District) took part in the discussions.

A representatives of FAS Department for Regional Tariff Regulation outlined FAS draft Order “On systematizing data collection executed by FAS using “Unified Automated Information System” monitoring”. According to Anatoly Golomolzin, the efforts to “immerse tariff regulation procedures in the digital” are continued.

The draft Order will be improved and a relevant report will be given at the tariff conference in Yalta.