PRESIDENT OF THE RUSSIAN FEDERATION SIGNED A DRAFT LAW ON RESTRICTING THE RIGHTS OF REGIONS TO EXCEED ELECTRIC GRID TARIFFS

Earlier the draft law was adopted by the State Duma of the Russian Federation and approved by the State Council of the Russian Federation

On 2 August 2019, the President ofthe Russian Federation signed the law excluding the right of regional tariff regulators to exceed the established maximum tariffs for electric power transmission services.

Prior to adopting the amendments to the Law on the electric power industry, decisions on exceeding the maximum tariff levels, if determined by the scope of corporate investment programmes, were made by regional tariff regulators independently without FAS approvals.

FAS law enforcement practice shows that considerable number of tariff decisions on electric power transmission services set the level higher that the maximum established tariffs, which has an adverse effect upon consumers. The Law is drafted in accord with the orders issued by the President ofthe Russian Federation and the Chairman of the Government ofthe Russian Federation.

Deputy Head of FAS Vitaly Korolev pointed out that the draft Law also specifies mechanisms of long-term tariff regulation and regulatory contract.

“Long-term tariff regulation has a favourable impact upon market players. Today all conditions are formed to set tariff to be in effect from five years and longer. Such a decision would be taken positively not only by large business but also by small and medium companies”, emphasized Vitaly Korolev. “As for regulatory contract, it is a particular agreement between an authority and an infrastructure company.  The contract formalizes all rules of relations on the long-run, including pricing, investment obligations and the criteria of reliability and the quality of services offered. FAS will control implementation of the contracts to prevent abuses”.