SERGEY PUZYREVSKIY: LARGE AMOUNT OF FRAGMENTED STATUTORY CONTROL GENERATE UNCERTAINTY IN TARIFF SETTING

30-10-2018 | 12:53

Pinpointed and manual management hampers economic development  

 

“Problems in tariff regulation emerge because there are no common rules. Also there are no clear, formalized procedures to make tariff decisions and consider tariff disputes”, said Deputy Head of FAS Sergey Puzyrevskiy at the X Annual Conference – “Antimonopoly Regulation in Russia” organized by the “Vedomosti” newspaper.

 

“Absence of procedural and remedial issues aggravates the existing problems:  the “manual” management of tariff regulation which leads to tariff discrimination and absence of consumer confidence and corporate bankruptcies”, continued Deputy Head of FAS.

 

“It formed the grounds to draft a law on tariff regulations upon an order from the President of the Russian Federation. The concept of the draft law was approved by the Government of the Russian Federation. The National Competition Development Plan also specifies unification of tariff regulation”, pointed out Sergey Puzyrevskiy.

 

Deputy Head of FAS underlined that the main aspect of the pursued policy is that tariffs should be economically justified.

 

“This is where we should start improving tariff regulation. FAS and judicial practice needs the basic principles of tariff regulation, on which we can rely if there are any gaps”, explained Sergey Puzyrevskiy.

 

“Then the principles of long-term tariff-setting should be observed”, added Sergey Puzyrevskiy.

 

He informed about the transition to the benchmark principle of determining the level of operational expenses required for production of a particular volume of goods and services and services of natural monopolies. If a benchmark determined correctly, which is not than simple, the tariff system will be simplify significantly.

 

Investments are the second tariff element, according to Sergey Puzyrevskiy. It concerns transparence of investment programmes. For example, if heating networks should be modernized, to include the modernization costs in the tariff, an investment programme must be publically discussed  so that consumers understand what they are going to pay for. It can change the entire system radically.  

 

Sergey Puzyrevskiy also talked about publicity of discussing tariff decisions.

 

Regarding the balance of the integrated law on tariffs and sectoral laws, Deputy Head of FAS pointed out that common rules of regulation should be contained in a single law; specifics of sectoral regulation can be defined in by-laws.  Such specifics should be based on the fundamental principles laid down in the unified law on state tariff regulation.

 



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