Media: Ministry of Energy wants to maintain preferential tariffs for electricity in the regions

MOSCOW, 18 Oct — PRIME. The Ministry of Energy of the Russian Federation intends to postpone the abolition of preferential tariffs for electricity in the North Caucasus, Tuva, Buryatia and Karelia, the Kommersant newspaper reports, citing sources in the industry.

The publication recalls that the government transferred six Caucasian republics (Chechnya, Dagestan, Ingushetia, Kabardino-Balkaria, Karachay-Cherkessia and North Ossetia), as well as Tuva, to preferential tariffs back in 2010. Thus, in problem regions, all electricity consumers buy electricity and capacity under regulated contracts, and not at general market prices. It was planned with the help of this measure to solve the problem of growing non-payments. The transition to market prices was supposed to take place from 2015, but has been delayed. In 2017, Buryatia was added to the list, and in the spring of 2018, Karelia.

Under the current law, benefits in the republics of the North Caucasus and Siberia should be gradually reduced from January 1, 2023, but the Ministry of Energy plans to postpone the launch of price liberalization until 2025. In Karelia, where the preferential regime is to be fully completed in 2023, it is also proposed to extend the special regulation, the newspaper reports.

At the same time, the “Council of Energy Producers” (CPE, which unites the largest generating companies in Russia) told the newspaper that power engineers lose 13 billion rubles a year due to preferential treatment. In their opinion, it is necessary to “consider the possibility of a softer pace of liberalization, rather than postponing it for two years.” The POC recalled that these regions are subsidized at the expense of electricity producers and consumers in other regions. “The difference between tariffs for special regions and free wholesale market prices ranges from 1.5 to 2.5 times,” the association quoted the publication as saying.

The “Market Council” (energy market regulator) noted that they consistently advocate the liberalization of the energy market. This should reduce the volume of inter-territorial cross-subsidization, which “in the end may have a positive impact on prices for most of the country’s consumers.”

“In practice, the positive effects of interregional subsidizing of energy tariffs, if they arise, are non-systemic, and they are disproportionately less than the deterioration of conditions in donor regions,” the Community of Energy Consumers (which unites industrial consumers of electricity) told the publication. Delaying liberalization will only exacerbate the cross-subsidization situation, they added.

The FAS told the publication that they had not received the bill.