FAS DISCUSSED TRANSITION TO THE BENCHMARK PRINCIPLE OF POWER GRID REGULATION

On 6 April 2018, FAS Working Group discussed transition to the benchmark method of power grid regulation.

Head of FAS Department for regulating the Electric Power Industry, Dmitry Vasiliev, opened the Working Group, emphasizing its tasks for improving the methodology of power grid regulation. Then his Deputy, Sergey Dudkin focused on applying the comparative method in government regulation of prices (tariffs) in the electric power industry.

The comparative method is already used to estimate sales mark-ups of providers of last resort and from 2018 all executive bodies of the subjects of the Russian Federation that are responsible for tariff regulation must employ this method.

Next report was delivered by a representative of “Rosseti” PJSC who highlighted some proposals regarding the transition to the benchmark principle of power grid regulation. More proposals on the methodology of benchmark regulation were put forward by representatives of “FGC UES” PJSC, “Rushydro” PJSC, “Network Company” OJSC (Kazan) and the “Non-Profit Partnership of Regional Networks” Association.

The participants emphasized the complexity of building a benchmark model for network companies, where analogue facilities must be compared with the benchmark facility under price-determining factors such as: geographical specifics, technical characteristics, etc.

Sergey Salov, who represented the expert community, discussed international experience of applying the comparative method to power grids.

The next regular session of the Working Group will be in June 2018.