FAS CONTINUES TO WORK ON TARIFF BENCHMARKING IN THE HOUSING-AND-UTILITIES SECTOR

In accord with the orders issued by the President of Russian Federation, the Government of Russia¹ together with interested economic entities must make decisions designed to improve tariff regulation, particularly in the housing-and-utilities sector, which includes introduction of the “benchmarking” principle of tariff setting

Following the instructions given by the President of the Russian Federation, a Road Map was approved for a transition to a comparative method, using benchmark costs values, to set tariffs in water supply, water drainage and heat supply².

"As part of the Action Plan, FAS devised a document obligating to apply the comparative method in order to set tariffs for transit water supply organizations with less than 10 km networks", said Deputy Head of FAS Department for Regulating the Housing-and-Utilities Sector, Elena Tsyshevskaya.

She explained that “the result is seen in 2020 tariff regulation. Tariffs for power transfer decreased, sometimes tenfold, which impacted reduction of the final tariff for consumers”.

The “Power Generators Council” Association presented a model for defining benchmark costs for heat energy sale similarly to the electric power sector. It stirred up a vivid discussion. Director of the Department for Developing the Housing-and-Utilities Sector, of the Ministry of Construction, Svetlana Nikonova, also outlined her position and supported the approach put forward by the market.

"FAS and the Ministry of Construction of Russia have similar positions on the issues discussed at the session, which lays the foundation for further productive collaboration", pointed out Elena Tsyshevskaya.

Summing up the discussion, Deputy Head of FAS Department for Regulating the Housing-and-Utilities Sector thanked the audience for their engagement in discussing the presented initiatives and informed that the Antimonopoly Service will continue taking into account opinions expressed by market participants.

Elena Tsyshevskaya underlined: "Hopefully, joint efforts will result in efficient and balanced document from the point of view of all parties involved”.

The event was part of the hands-on workshop on “Evolution of tariff regulation in 2020" in Sochi on 5 March. Its agenda also includedvarious aspects of information support to tariff regulation of the utility sector and automatic filing tariff applications in the electronic form.

Suren Oganisyan, Head of the Unit for Methodology of Infrastructure Sectors, FAS Department for Regulating the Housing-and-Utilities Sector, also took part in the session.

¹ № Pr-2418 of 18.12.2018.

² Approved by № 7186p-P9 Decree of the Government of the Russian Federation of 06.08.2019.