FAS RUSSIA: LIMITS ON SPECIFIC CONSUMPTION OF FUEL EQUIVALENT FOR SUBMITTING PRICE BIDS FOR SALE OF ELECTRIC ENERGY WERE APPROVED

Earlier, the FAS Russia adopted the relevant methodology in order to increase the transparency of the actions of the Competition Authority within the framework of identifying cases of manipulation of electricity prices by suppliers through the submission of unreasonably inflated price bids

It should be reminded that the document defines the procedure for comparing the values of price bids from suppliers that were submitted in the day-ahead competitive selection in the price zones of the wholesale market, taking into account their parameters. Such parameters include the amount of electricity, terms of electricity supply, types of generating equipment and its operating modes, cost of fuel for this equipment and values of its consumption for electricity supply at a certain hour.

During the first stage of analyzing price bids, the FAS Russia will compare price bids with costs calculated based on the maximum levels of specific consumption of fuel equivalent for electricity production for various types of generating equipment.

The Order assumes that these limits are set by the Supervisory Board of Market Council NP in coordination with the FAS Russia.

On March 27, 2024, during the meeting of the Supervisory Board, the corresponding values of the limits of specific fuel consumption for submitting price bids for the sale of electricity were approved.

According to the methodology developed by the FAS Russia, exceeding the approved values will be an indicator of non-compliance with the economically justified cost level.

At the second stage, price bids will be evaluated for compliance with the requirements using two calculation methods – based on the average weighted cost per hour and the cost for “preloading”. The maximum value obtained will be used for evaluation.

The corresponding methodology involves strengthening antimonopoly response tools through an algorithm for verifying the economic validity of price bids, taking into account the cost of fuel for electricity generation.

The FAS Russia emphasizes that price manipulation in the wholesale electricity market can lead to an increase in its cost for end consumers.

*Order of the Federal Antimonopoly Service of March 27, 2023, No. 162/23 “On approval of the requirements for the economic validity of price bids for the sale of electric energy and the methodology for determining compliance of price bids for the sale of electric energy with the requirements of economic validity” (Registered on April 28, 2023, No. 73196)