Vitaly Korolev: social orientation of tariff decisions is an important factors of the national policy

FAS is consistently and fundamentally implementing the “inflation minus” principle when tariffs are changed to the below the inflation level

On 31 October 2017, Vitaly Korolev addressed the Presidium of the law-makers of the Russian Federation at the Federal Assembly of the Russian Federation, that met in Stavropol to discuss the state policy on the housing-and-utilities sector.

Deputy Head of FAS pointed out that the housing-and-utilities sector, particularly, tariffs for these services, is one of the most prominent in terms of social aspects. The Government and the federal authorities responsible for the national policy in this sphere, undertake considerable efforts to improve the sector performance.

In the part of increasing tariff-decision transparency at the regional level, where tariffs are differentiated significantly, as well as by sector, where regulation rules vary greatly, FAS has drafted a law “On the basic principles of tariff regulation in the Russian Federation.” It provides for the common standards and principles of tariff regulation in all spheres, including housing-and-utilities sector (electric power, heating, water supply, etc.).

Another important factor of the national policy is social orientation of tariff decisions that determine the final payments of the population for utility services. FAS is consistently and fundamentally implementing the “inflation minus” principle when tariffs are changed to the below the inflation level. For instance, this year the Government made a decision that the increase in the final utility payments by physical persons this year should not exceed 4% on average in Russia. The Government instructed the Heads of the subjects of the Russian Federation (regions) to strictly abide to these limitations and inform FAS in advance about the need to exceed this index in the regions or municipalities due to the grounds specified in the law.

Vitaly Korolev reported on the draft law considered by the Government on amendments to the Law on the electric power industry that prohibits regional tariff regulators to exceed the maximum rates for electric power transmissions set by FAS.

“These measures should generate a positive effect in the form of stability of tariff regulation and restricting the growth of tariffs in the absence of objective preconditions”, said Deputy Head of FAS.

Finally, he outlined the work on increasing accessibility of the infrastructure of resources suppliers for the purposes of connecting land plots and real estate facilities to this infrastructure.

“The Government undertakes robust efforts to unify the rules for connecting to the utility networks, sets the rules for determining the standardized procedures and the costs of such connection, and conducts an experiment to transfer these procedures in the digital format, enabling to not only exclude personal contact between the applicant and the staff of a resource supplier, but also considerably shorten the period and enhance the quality of work of resource suppliers with consumer applications for network connection. This work has already been praised highly by the World Bank – Russia is in the top ten countries on the accessibility of electric power infrastructure for consumers. These results are achieved through multiyear  methodical efforts in this field by federal executive bodies and the law-makers that  are not indifferent in their work to the needs of the population and pass laws enabling Russia to intensively climb up in this global ranking”, concluded Vitaly Korolev.