Russians overpaid billions of rubles for housing and communal services: is compensation possible?

Russians overpay for utilities. This conclusion follows from the results of an inspection by the Federal Antimonopoly Service of Russia (FAS). According to the regulator, in 2024, economically unjustified funds in the amount of 8.2 billion rubles will be excluded from tariff calculations. But the overpayment is unlikely to be returned to consumers in cash. According to an expert of the project “People's Front. Analytics” by Pavel Sklyanchuk, most likely, these billions will be deducted from the tariff applications of housing and communal services organizations for the next year.

- Where did this amount come from - over 8 billion rubles?

-In fact, 8.2 billion rubles is a drop in the ocean. Considering the fact that the annual turnover of the housing and communal services industry is several trillion rubles. In this sense, the violations identified are very modest.

- How is tariff setting in the housing and communal services sector generally structured, if overpayments are possible there?

-Each regulated organization submits its applications to special commissions that are formed in the regions, where it indicates the funds it needs, which must be taken into account when setting tariffs for the next period. They are usually divided into two parts: operating expenses and investment expenses. In other words, companies describe how much they need to invest in routine repairs and how much in replacement and modernization of equipment. Now, it turns out that the FAS noticed violations in these documents, but given that the regional commissions missed these violations, it cannot be said that the blame here lies solely with the utility companies.

-How will they solve the problem: after all, these billions have actually been taken out of the pockets of consumers?

-This money will not be returned to citizens in living form. Most likely, they will simply be taken into account in subsequent periods. That is, they will be deducted from tariff applications for 2025. In this way compensation will occur. This is the best case scenario.

- Why “at the best”? What's the worst that could happen?

- Because in Russia there is inflation, there are new needs of municipal structures, there are different techniques that organizations use to cover lost income. Therefore, they themselves may want to compensate themselves for all this. Here the game is, as they say, not one-sided.

-If the amount of overpayment is excluded from the tariffs, what will this lead to? Will it be possible to curb the appetites of local utility workers and will it make it easier for the population to pay for housing and communal services?

- There is no need to talk about curbing yet. This industry remains a monopoly, and a monopoly on the part of enterprises affiliated with the state. In Russia, many enterprises in the housing and communal services sector have the form of a municipal or state enterprise. There are few private investors. And then, everything that enterprises were unable to collect from tariffs, they receive from local budgets. This demotivates utility managers to make any efforts to reduce costs and increase productivity.

- Which housing and communal services cost the population more than others and why?

- Heat supply comes first. The generation of heat itself is quite expensive and we must not forget about the large losses when transferring the resource to the end consumer. Let me remind you that in many countries the average temperature in residential premises is such that people cannot walk around the apartment without warm clothes, since the resource is very expensive.

-How, in your opinion, should a fair tariff be formed?

- The antimonopoly service itself is the ideologist of an alternative project in tariff policy. These are the so-called reference tariffs and long-term tariffs. Today our planning horizon is a calendar year. And after this, tariffs are revised again. At the same time, for some reason, each organization’s application is considered individually. Hence the distortions in the cost of services per cubic meter of water in neighboring settlements and regions by tens of times. This is clearly not normal. FAS proposes a methodology for leveling the cost of utility services, namely, setting them three years in advance for planning investment programs.

- The government’s intentions to index housing and communal services tariffs for 2025 are already known. According to the forecast of the country's socio-economic development, from July 1, tariffs will be indexed by an average of 11.9%. This is clearly higher than annual inflation. Do you agree with this assessment of tariff growth?

-Yes, the indexation will be double-digit, but it seems to me that this is fair and just. Taking into account inflationary processes, this is what should happen. Tariffs will be raised differently in regions. Today, the “matryoshka” model is in effect: at the federal level, maximum tariff growth indices are established for each region and permissible deviations - mainly in the direction of excess. At the same time, the Ministry of Construction periodically criticizes governors who do not completely increase housing and communal services tariffs to the permitted level. This is regarded as populism. Therefore, I think that next year housing and communal services tariffs will increase by an average of just 12%, but for the regions this is not the limit.