Column by Polina Smertina on electricity tariff reform

“If we don’t wash it, we go for a ride” – this is how one can briefly describe the government’s many years of attempts to reform electricity tariffs for the population, that is, to gradually raise them to market realities. The White House approached the topic several times, but never followed through. Another attempt, about which “Kommersant” wrote last week seems to have every chance of success.

The government froze household tariffs in the 1990s, hoping to release them once the economy stabilized. The regulators placed part of the financial burden on business, that is, in professional terms, they created cross-subsidies. Saying goodbye to the “crossroads” turned out to be difficult: the relevant ministries set goals on paper to reduce it, but the burden on business grew. Attempts to raise tariffs for the population in the regions were nipped in the bud by governors.

At the beginning of 2022, the government fixed the volume of permitted “crossroads” at the level of 241 billion rubles, beyond which it was impossible to go. After the outbreak of hostilities, the authorities allowed regions to exceed the limit as an exception in 2023, which led to a record increase in subsidies from business – up to 294 billion rubles. The FAS, having not come up with anything better, promised the regions to extend this “crossroads” level until 2024. But the government rejected this proposal.

The regions find themselves in a difficult situation. Subjects that do not fit into the previous “crossroads” will be required to pay for the population from their own budgets. Potentially, we are talking about the entire country: according to my information, only seven regions fit into the restriction. But the government offers an alternative: if you don’t want to spend the budget, introduce differentiation of tariffs for the population, that is, a social norm for energy consumption: if you go beyond the established limit, you pay for the excess according to the market. In this case, it will be possible to increase the load on business.

In 2021, the authorities wanted to introduce a single social norm for the entire country: 300 kWh per month is paid at a low tariff, over 300 kWh at a higher tariff, and over 500 kWh at a market price. Now everything is in the hands of the regions – they themselves will calculate the “standards”. This is where the danger lies: regional officials can set huge limits, because of which both the average family and the owner of a mansion with heated floors will receive benefits. An example is Kuzbass, where the consumption limit is 15 thousand kWh per month.

The scheme, admittedly, is not ideal and could lead to an even sharper surge in “crossroads.” However, you have to start somewhere. The next step can, for example, improve the methodology for calculating preferential limits or create a “crossroads” reduction schedule for each region.