GOVERNMENT APPROVED THE FIRST RUSSIAN CONCEPT OF LONG-TERM TARIFF REGULATION

It will apply to housing and communal services, waste management, electricity supply, gas supply, telecommunications and rail transport

To implement the instructions of the President of the Russian Federation the FAS Russia has worked out the Concept of long-term tariff setting mechanisms for companies engaged in the regulated activities. Andrei Belousov, the First Deputy Prime Minister of the Russian Federation, has approved the introduction of the Concept.

The mechanisms are based on long-term planning, consumer protection and reliable operation of the infrastructure sector. One of the key ideas of the Concept is the creation of conditions for a return on investments in housing and communal services, as well as for their modernization while protecting consumers from unjustified tariff increases by setting ultimate indices.

Thus, the document, as a rule, prohibits the revision and adjustment of prices (tariffs) and long-term regulation parameters of the companies’ activities.

The Concept also includes the establishment of legal mechanisms that guarantee regulated companies the preservation of all additional profits (savings). This decision should facilitate the directing savings of regulated companies toward investments in infrastructure with a focus on the use of Russian materials and technologies during its modernization.

In addition, the target parameters for the growth of operating and investment efficiency will be set, including the rate of reduction of operating expenses, reduction of wear, as well as the number of dilapidated networks.

The document also provides for the establishment of a Single digital tariff platform capable of ensuring transparency and efficiency of tariff regulation. To implement the Concept, the FAS Russia will develop an action plan ("road map") specific to industry characteristics of tariff regulation in each of the regulated areas.

It should be noted that earlier in the Russian Federation there was no single policy document, which embodies the common approaches to improving and promoting tariff regulation.