Anatoly Golomolzin: in some legislative acts the tariff regulation principles differ considerably

FAS will form a unified legislative architecture for tariffs

Deputy Head of FAS Anatoly Golomolzin discussed the work of the antimonopoly body in the part of building up the new legal framework for tariff regulation at a workshop “Tariff Regulation in 2017 and regulators’ objectives for 2018 – 2025”.

“One of the issues for the tariff system is absence of a unified legislative architecture for pricing. As a result, the entire legal construct is built up on separate laws and by-laws that are based on different principles and requirements. It creates legal uncertainty for the regulator, regulated organizations and consumers of their services”, pointed out Anatoly Golomolzin.

Deputy Head of FAS stated: “Certain fundamental concepts should be introduced to the Law “On Protection of Competition” and the basic principles of natural monopolies regulation should be specified. Market analysis should be used to determine holders of natural monopolies in the fields specified in the law, and to introduce, amend or terminate tariff regulation. The Law on the basic principles of government regulations of prices (tariffs) that is being devised by FAS shall unify the principles and methods as well as procedural norms on tariff-setting”.

He also talked about tariff regulation “immersing into digital” and informatization of decision-making. “Information transparency will become an important regulatory element. The tariff-setting procedure must be transferred into digital. The stakeholders (consumers, experts, the public) must be able to have access to information at all stages – from submitting applications to tariff decision-making”, stated Anatoly Golomolzin.

Outlining structural changes, Deputy Head of FAS said that there is a standard package of reforms in the electric power industry, gas and transport that include, in particular, splitting by types of activity, regulating the tariffs of natural monopolies and ensuring access to them, privatization of entities in competitive segments, etc.

“At the same time, less attention is paid to such important aspects as creating commercial infrastructure of markets. It is necessary to develop the system of contractual relations, form commercial infrastructure entities – such as Market Council, Exchange Committee, etc. – and determined the rules of conduct on the market jointly with the business sand expert community”, believes Anatoly Golomolzin.

In the course of the structural reforms, carried out in line with the decisions made by the Presidential Commission on the Fuel-and-Industry Complex, the exchange markets of oil, petrochemicals and natural gas are being established. Here traditional monopolies obtain a new status. Under the law for on-exchange trading, “Transneft” gained the status of goods supply operator, ensuring competitive trading on the integrated delivery basis. Supporting exchange gas trading, “GazpromGazPostavka” initially obtained the status of transportation organizer, and currently has the status of goods supply operator. “Structural reforms also can be accelerated under the frame of the National Competition Development Plan approved by the President of the Russian Federation, its draft is now under discussion”, informed Anatoly Golomolzin.