VITALY KOROLEV: BENCHMARKS FOR THE HEATING SUPPLY SECTOR ARE UNDER DISCUSSIONS

Deputy Head of FAS outlined the main changes and initiatives in this field, speaking at the “Future of Russian Heat Supply” session during the Russian Energy Week

“Recently the Government of the Russian Federation, federal and regional authorities undertook productive work on improving the principles for performance of the heating supply sector. One of the purposes of adopting systemic measures are observing the balance of interests between consumers and resource suppliers, since here into account should be taken, on the one hand, limited tariff indexation under inflation, and on the other – effective consumer demand”, said Deputy Head of FAS Vitaly Korolev.

He outlined amendments to the Law on heating supply that formalized the mechanisms of the so-called “alternative boiler-house”. The tool enables, in particular, to transfer the heating supply system form inefficient sources to more efficient heating supply sources and modernize the heating supply system.

“Moreover, measures were adopted to limit the list of grounds, under which the population payment index can be exceeded, for example, concession and “alternative boiler-house”. Today the population payment index can be exceeded only in exceptional cases and with mandatory FAS notification”, pointed out Vitaly Korolev.

Another important adopted regulatory act is the rules for non-discriminatory access in the heating supply sector. They solve a number of issues. For example, if a participant plans to get connected to the heating supply system and is prepared to pay for connection, the participant does not need to wait for including in the investment programme. Now it is possible to connect to the heating supply network under an individual plan quicker than it used to be.

Regarding the initiatives, Vitaly Korolev said: “Currently the Government of the Russian Federation and federal executive bodies are working on implementing the benchmark principle in the heating supply sector. Today tariff differentiation in regions is up to ten times.  The situation should be sorted out as quickly as possible and the tariff level should be brought to a common standard, which will account for technological and climatic specifics”.

Deputy Head of FAS also talked about performance of unitary enterprises. “According to expert estimate, state and municipal unitary enterprises occupy a quarter of the heating supply market. The National Competition Development Plan, approved by an Order of the President of the Russian Federation, formalizes measures to reducing the share of productive supply of unitary enterprises in the total volume of used resources. According to the document, in 2019 this volume in the heating supply sector should reduce to о 20%, and in 2020 – to 10%”, added Vitaly Korolev.

“Overall, one can say that the heating supply sector is developing towards destatisation, but FAS shall not allow any sharp tariff fluctuations”, concludedDeputy Head of FAS.