VITALY KOROLEV: THE BENCHMARK PRINCIPLE FOR THE INTEGRATED POWER GRID IS A NEW MILESTONE IN DEVELOPING THE ELECTRIC POWER INDUSTRY

FAS expects to apply this mechanism since 2019

Deputy Head of FAS Vitaly Korolev started his speech at Russian Investment Forum in Sochi with the statement: “The National Competition Development Plan approved the priority of developing competition relations in all spheres. Undoubtedly, the electric power industry as an infrastructure sector also should be engaged in this work”.

“Jointly with the Ministry of Energy FAS is devising a “Road Map” that will determine the key indicators for developing competition in the electric power industry. It will be approved by 1 July 2018”, reported Deputy Head of FAS.

Vitaly Korolev discussed two particular issues in detail: tariff discrimination and exceeding the ceiling tariff level.

“Last year the tariff level was exceeded in 15 regions across Russia without FAS consent. It increased electric power prices significantly. For example, the ceiling levels were overrated by 34% in the Nizhny Novgorod region and by 14% in the Republic of Bashkortostan”, stressedDeputy Head of FAS. “To prevent such an increase, the antimonopoly body drafted amendments to the Law on the electric power industry that prohibits exceeding the set tariff level without FAS approval.”

Vitaly Korolev also outlined the basic short-term FAS plans.”In 2019 we expect to introduce cost benchmarks for grid companies. This mechanism will help achieve transparent and clear pricing convenient for all actors: from regulated entities to consumers. In FAS opinion, the transition to the new principles stimulated fund saving and efficiency. It will be a new milestone in industry development”, added FAS representative.

“Another important point is regulatory contract. Further on, long-term regulation based on regulatory agreements should become the priority method of regulating infrastructure companies. If a regulatory agreement is not reached, the tariffs for an organization should be determined using the costs benchmarks”, concluded Vitaly Korolev.