The government obliged the regions to review electricity tariffs
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The Russian government has approved measures that encourage regions to transfer the population to new electricity tariffs. They will increase with increasing consumption. According to resolution government, from 2024 regional authorities will be obliged to do this if they want to increase payments from businesses for reducing tariffs for the population.
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 of such cross-subsidization. In 2023, the government allowed regions to exceed the limit.
It follows from the document that an alternative to the transition of regions to a new mechanism would be to subsidize the tariff for the population from their budgets. According to the Federal Antimonopoly Service (FAS), which I have read “Kommersant”the decree will force the entire country to switch to new tariffs, since almost all regions in 2024, when setting tariffs, will go beyond the established subsidy ceiling.
Previously, the FAS stated that these measures would “reduce cross-subsidization and also combat gray mining.” The service emphasized that tariffs for the population will be set taking into account the limitation of maximum levels. The final cost for citizens will be set by regional tariff authorities, and the FAS has promised to monitor this.
Read more about the new mechanism in the Kommersant article. “Kilowatt is different from kilowatt”.
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