The ceiling was calculated for heat – Newspaper Kommersant No. 195 (7396) dated 10/20/2022

The heat price liberalization reform launched in 2018 may be stalled. Regulators, according to Kommersant’s information, propose to artificially limit price increases in regions that have switched to a market model of regulation and index prices by a maximum of 4% above inflation in order to avoid an uncontrolled surge in tariffs. The change in rules could make it difficult to pay off some boiler projects and scare off new investors, analysts warn.

The government may introduce partial regulation of heat prices in regions that have switched to a market model of tariff formation (“alternative boiler house”), sources told Kommersant.

Price growth for investors who have already invested in the modernization of infrastructure in the region is proposed to be artificially slowed down: the maximum annual price indexation may be 4% above the forecasted average annual inflation (6% in 2023, according to the Ministry of Economy).

There are no changes for new investors. The corresponding amendments were prepared by the Ministry of Energy (“Kommersant” saw the document).

The government launched a heat supply reform in 2018 to bring money into the industry. The investor invests in infrastructure, and in return sells heat not at a regulated tariff, but at a negotiated price. Gradually, over several years, the price rises to an economically justified ceiling (the cost of heat during the construction of a new boiler house). Such regulation gives the investor a guarantee of return on investment. Prices in such regions increase according to a schedule agreed with the governor, and after reaching the ceiling – according to inflation.

Regulators and investors began to discuss changing the method of “alt-boiler” last year. The main goal is to revise the parameters for calculating the marginal price of an alt-boiler house (list of technologies, prices for fuel, land, etc.).

In particular, the basic cost parameters will be increased to the level of 2019 (now the year 2015 is used in the database), follows from the document.

However, in 2022, regulators were afraid of an uncontrolled increase in heat prices, as the calculation base for indexation will increase. Although the price growth parameters are always agreed with the local authorities, who usually try to keep the tariffs down. As a result, the authorities, in fact, are introducing tariff regulation into a market instrument for investing and changing the rules of the game, several Kommersant interlocutors who are familiar with the discussions say. As a result, investors will reach the desired price ceiling longer than expected. The Ministry of Energy and the FAS did not respond to Kommersant’s request.

Limiting the indexation of the marginal level of the “alt boiler” price in the existing zones by the inflation rate plus 4% per year is not a problem for the existing investment projects of the Siberian Generating Company (SGK), since in any case it provides a sufficient increase in prices for thermal energy, taking into account the increased base, says the Director for interaction with government agencies SGC Ekaterina Stepina. The new rules will also not be an obstacle for new players and projects, since in any case, the “alto boiler house” provides a more transparent and predictable price for investments compared to tariff regulation. In “T Plus” “Kommersant” did not answer.

The very possibility of revising the level of established prices for the “alt boiler” is a factor that increases the uncertainty for business, says Sergey Sasim from the Institute for Economics and Regulation of Infrastructure Industries of the National Research University Higher School of Economics.

On the other hand, the revision of the calculation base to the level of 2019 may be a more significant factor for investors who are considering investing in heat supply zones. Although, most likely, for investors who expected to reach the target value of the tariff by 2023, the new approach will be an unpleasant surprise. As for consumers, the increase in payments is expected to be in the region of 2-3% above inflation, and the reaction to this will depend on the region. At the same time, the mechanism of the “alt boiler house” implies the possibility of forming a flexible schedule for bringing prices up to the investment level, which can be used to level the negative tariff consequences, Sergey Sasim notes. With this in mind, the idea of ​​federal regulators to further limit price growth seems redundant, the expert believes: the governors already have enough authority to form a balanced tariff policy.

Polina Smertina