The Caucasus is called to the market – Newspaper Kommersant No. 201 (7402) of 10/28/2022
[ad_1]
Generating companies and industry are asking the government not to delay the transfer of the North Caucasus, Tuva, Buryatia and Karelia to free market prices for electricity. They propose to reduce preferential tariffs for businesses in the regions from 2023, but at a slower pace – 5% per six months. Due to preferential regimes, energy companies have already lost 125 billion rubles in total. The initiative is better than extending benefits, analysts believe, but they fear a surge in non-payments in the republics due to rising prices.
Energy companies and industrial consumers of electricity asked Deputy Prime Minister Alexander Novak not to delay the withdrawal of the republics of the North Caucasus, as well as Tuva, Buryatia and Karelia, to the wholesale energy market.
They propose to start reducing feed-in tariffs, as planned, from 2023, but at 5% per six months instead of the planned 10%.
This is stated in a joint letter from the “Council of Energy Producers” and the “Community of Energy Consumers” (“Kommersant” saw the document dated October 26, the association confirmed the sending). Mr. Novak’s office said that the document had not yet been received. The Ministry of Energy did not respond to a request.
Now commercial consumers in nine regions, including the North Caucasus, are buying electricity at low tariffs, not at free market prices like the rest of the Russian Federation. Deputy Prime Minister Alexander Novak instructed the Ministry of Energy to prepare amendments postponing price liberalization in the regions until 2025 (see “Kommersant” dated October 18). In Karelia, the preferential regime should be fully completed in 2023, but it can be extended: according to Kommersant, the amendment has already been received by the Ministry of Justice.
Regulated tariffs in the republics are 1.5-2 times lower than the free prices of the wholesale energy market, sometimes even less than the cost, but this difference is not compensated for by energy companies, the letter says. Over the 11 years of the special regime, generating companies have received less than 125 billion rubles.
The decrease in revenue “limits work” on the modernization of facilities, which does not lead to an increase in the reliability of energy supply, the authors warn.
Associations are also asked to leave the possibility of slightly accelerating the abolition of benefits in the republics if, for example, grid and energy retail companies begin to pay their bills worse.
At the same time, businesses in the rest of the country are forced, in fact, to subsidize the energy sector in the benefit republics: the financial burden on consumers in other regions is about 30 billion rubles. in year. Such cross-subsidization distorts the economic incentives for businesses located “often in the same climatic and socio-economic conditions.” For example, in the Stavropol Territory, the wholesale price of electricity for eight months of this year reached 2.8 rubles. for 1 kWh, and in neighboring Kabardino-Balkaria – 1.63 rubles, the letter says.
The Market Council (energy market regulator) told Kommersant that the letter from consumers and producers “speaks of the relevance of the issue for all market participants and the unity of positions, which is extremely rare.” They called the idea of associations “quite acceptable as a compromise.” The longer the transition of all regions to the market is delayed, the association says, the more difficult and painful the process will be for them later, and the reduction in inter-territorial cross-subsidization may have a positive effect on prices for most of the country’s consumers.
The proposal of energy companies to reduce the pace of price liberalization in special regions is, of course, better than an endless extension of benefits, Sergei Rozhenko from Kept believes, the topic lies more in the political than in the economic plane.
“The main problem of this scheme is not even its availability, but the low flexibility and selectivity of the tool: all consumers, without exception, receive support, even those who do not need it,” he says.
“This problem, like the “crossroads” problem, has a sad property: there are risks of increasing non-payments due to rising prices, but at the same time, postponing a solution only exacerbates the problem,” Natalia Nevmerzhitskaya, chairman of the board of the Association of Guaranteeing Suppliers and Energy Retail Companies, told Kommersant. “It is necessary to look for non-trivial solutions, but there is no possibility for this yet either.”
[ad_2]
Source link
