IGOR ARTEMIEV: TOUGH RESPONSE FOR TARIFF INCREASES WITHOUT APPROVAL

Head of FAS summed up the interim results of the efforts of the antimonopoly authority in tariff regulation and highlighted prospective areas of work

“Now the functions of antimonopoly and tariff regulation and control over public procurement are in the hands of the same regulator, and we look at tariff regulation through the prism of the antimonopoly and procurement laws”, emphasized Head of FAS Igor Artemiev at the Plenary session of the National Tariff Regulation Workshop in Crimea on 15 October.

Upon the approval of the National Competition Development Plan* FAS has shifted from protective functions to system-wide macroeconomic measures. The goals of the National Plan include implementing a clear, unified control system, designed to prevent and suppress violations in tariff regulation, increasing tariff decision-making transparency, excluding tariff discrimination, laying the foundation for use of the comparative methods in various fields.

FAS has introduced the principle of long-term tariff regulation in all spheres of tariff control (for example, for “Russian Railways” the tariff is set till 2025), eliminated possibilities to exceed the cap tariffs in the regions of Russia and influence entities in the part of the need of cost reduction after applying the price and tariff regulation principle.

“Certainly, we are against tariff discrimination. The tariff gap at the same stations can reach 52 times. Our latest efforts have decreased the gap but it is still there. Formula pricing - the same for the objects in comparable conditions – is a right decision, similarly to benchmarking wherever possible”, said Igor Artemiev.

Benchmarking is based on unification of estimate approaches, eliminating possibilities of regional tariff regulators to influence sales mark-ups, which makes regulation transparent.

FAS is devising a basis for benchmarking in networks all over Russia from 2021. Several pilot regions will be chosen in 2020.

Since 2019 all decisions on exceeding the tariff level must be approved by FAS **.

Igor Artemiev explained: “Until this year, regional Tariff Commissions could take an advantage of the imperfect law and increase tariffs; now it is impossible. If you wish to increase tariffs, you must approve it with FAS. Increasing tariffs over the level, set by the Government of the Russian Federation, without FAS approval will incur a zero-tolerance response from FAS”.

The National Workshop on Tariff Regulation in 2019 and the goals of regulators for 2020 takes place on 15 - 17 October in the Republic of Crimea. The event participants are discussing tariff regulation of the telecommunications sector, gas supply, heating supply and solid municipal waste treatment.

Reference:

* Approved by No.618 Order of the President of Russia of 21.12.2017