Several Russian regions will have to adjust their energy plans for 2024

According to Kommersant, the FAS may force a number of regions to change electricity tariffs for 2024. The service received comments from the constituent entities of the Russian Federation that sharply increased energy tariffs for businesses, but did not introduce preferential consumption limits for the population, as recommended by the government. The regulator was most outraged by the decision of the authorities of the Irkutsk region: the region complains about mining in the household sector, but instead of changing tariffs for the population, it again increased them for businesses by 19%. The FAS has grounds for canceling tariffs in the Irkutsk region, analysts say, expecting a harsh reaction from Moscow.

The FAS is considering the possibility of revising new electricity tariffs for 2024 in a number of regions of the country, several sources told Kommersant. According to them, the service has claims against regions that have sharply increased tariffs for electricity transmission for businesses, but have not introduced preferential limits on consumption volumes for households. As Kommersant reported on November 2, the government wants to oblige regions, when the load on legal entities sharply increases, to transfer the population to new tariffs taking into account consumption volumes (differentiated tariffs). Amendments to the legislation are still in the government apparatus, but an agreement was reached between regulators and “regions with exceeding maximum levels” “to proceed from the logic of the draft document,” Kommersant’s interlocutors explain. The FAS did not comment.

In Russia, electricity tariffs for the population are artificially restrained and are below the economically justified level. The regulator shifts part of the burden into the tariff for industry, that is, in essence, business subsidizes the population. Each region has a maximum level for this subsidy. In 2022, the industry paid an additional amount of about 241 billion rubles for the population, and in 2023 – a record 294 billion rubles.

One of Kommersant’s interlocutors claims that the FAS may require a revision of tariff decisions in nine regions. The greatest indignation, according to Kommersant’s information, was caused by the decision of the tariff authority of the Irkutsk region, whose authorities in 2021 asked to launch a mechanism for differentiating tariffs for the population in the Russian Federation due to the rapid development of gray mining. However, in the end, the regional authorities decided to leave a single tariff for the population, regardless of the volume of consumption: for the urban population, the single-rate tariff from July 2024 will be 1.58 rubles. for 1 kWh, and for rural residents – 1,106 rubles.

As one of Kommersant’s interlocutors notes, in the Irkutsk region the specific electricity consumption by the population is 4 MWh per person per year, which is three times more than in all other regions of Siberia, and four times more than in Moscow. Part of this consumption falls on miners in the household sector: the load of such miners in the region is about 200 MW.

Instead of introducing differentiation of tariffs for the population, the tariff service of the Irkutsk region increased single-rate tariffs for electricity transmission for legal entities in the second half of 2024 by 18.6%, although the average Russian indexation level is 9.1% (according to the forecast of the Ministry of Economy). The tariff for a commercial consumer at high voltage will be 0.595 rubles. per 1 kWh, for medium voltage – 1.24–1.56 rubles, and for low voltage – 2,068 rubles.

As a result, the burden on business in the Irkutsk region will increase significantly. The maximum volume of cross-subsidization in the region (fixed in government decree No. 1178) is 5.73 billion rubles. In 2023, the actual volume of subsidies for businesses in the Irkutsk region amounted to 7.7 billion rubles, and in 2024, due to tariff decisions adopted, it could exceed 8.03 billion rubles, calculated Sergei Sasim, director of the Center for Research in the Electric Power Industry of the National Research University Higher School of Economics. Thus, in 2023, the Irkutsk region exceeded the permitted subsidy level by 34.6%, and in 2024 – by 40%. Mr. Sasim recalls that in 2023, as an exception, the government allowed regions to exceed the maximum levels, but in 2024 they no longer have the right to do so.

A formal reason for canceling the decision of the tariff authority of the Irkutsk region may be the excess of the actual amount of cross-subsidization over the maximum permissible according to Resolution No. 1178, says Sergey Sasim. If the decision is canceled in the region, the maximum minimum tariffs approved for the region begin to apply, and the difference between the previously established tariffs and the minimum maximum tariffs is compensated from the regional budget, he recalls. Mr. Sasim believes that the number of overturned decisions “will depend on the behavior of the federal regulator.” “Tariff differentiation for the population is not the most comfortable solution for the region, but it is much more acceptable than budgetary responsibility,” he believes. “If the FAS does not take decisive measures to cancel decisions of this kind, then the refusal of differentiation risks becoming a mass phenomenon.” The tariff campaign in Russia will end only at the end of December: according to time2save analysts, electricity transmission tariffs for legal entities have so far been set by only 25 constituent entities of the Russian Federation.

Polina Smertina