DMITRY VASILIEV: A NEW MECHANISM FOR TARIFF SOLUTIONS IN ELECTRIC POWER NETWORKS

FAS Working Group discussed new tools in the pricing system

At the Working Group on tariff regulation in the electric power industry and the housing-and-utility complex on 16 August, representatives of FAS and the expert community discussed implementation of new provisions of the Law on the electric power industry.

The event was opened by Head of FAS Department for Regulating the Electric Power Industry, Dmitry Vasiliev. He pointed out that one of the areas of the long-term policy on government tariff regulation is improving sectoral regulatory acts.

On 2 August 2019, the President of the Russian Federation signed an order to introduce amendments to the Law on the electric power industry. As a result of the amendments, regional tariff regulators cannot make decisions on their own to exceed the maximum level of prices (tariffs) without FAS approvals if such an increase is determined by the scope of corporate investment programmes.

The Law also introduces a new tariff regulation institution: “regulatory contract”. According to Dmitry Vasiliev, such contracts fix all rules of relationships, including pricing, investment obligations and the criteria of service reliability and quality on a long-term basis. FAS will supervise contract fulfillment to prevent abuse.

Head of FAS Department for Regulating the Electric Power Industry said: “Essentially, the law has brought in significant changes in the existing tariff regulation rules, it creates a new mechanism of tariff decision-making, and restricts an unreasonable tariff growth. We should promptly draft high-quality regulatory acts to generate the maximum effect for a balanced tariff policy in the electric power industry for the years immediately ahead. The expert opinions and proposals play an important role in preparing balanced decisions”.