The government will encourage regions to review the system of electricity tariffs for the population
[ad_1]
According to Kommersant, the government has figured out how to force the regions to transfer the population to new electricity tariffs taking into account consumption volumes. From 2024, regions will be required to do this if they want to increase business payments for reducing tariffs for the population. According to FAS estimates, almost all regions will have to switch to new tariffs for citizens, unless they decide to subsidize the tariff for the population from their budgets. The Ministry of Energy welcomes the initiative as it will allow “to control the growth of cross-subsidies.” Analysts doubt the effectiveness of the measure, believing that the regions will comply with the requirement formally and will not increase 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 for this subsidy.
The government wants to encourage regions to introduce differentiation of electricity tariffs for the population – the tariff rate will increase as consumption increases. According to the Cabinet of Ministers’ proposal, only regions that have switched to new tariffs for the population will be able to exceed the maximum amount of cross-subsidization (additional payment by businesses for reducing household tariffs), sources familiar with the discussion told Kommersant. An alternative to switching to a new mechanism for regions is to subsidize the tariff for the population from their budgets. Potentially, the initiative 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, follows from the FAS presentation (available to Kommersant).
A region that has switched to differentiated tariffs for the population will be able to increase the maximum level of cross-subsidization according to a special formula developed by the FAS. The level of the subsidy can be indexed to the level of inflation, as well as to the growth rate of energy consumption by the population. The FAS confirmed to Kommersant that they propose to introduce such a measure from January 1, 2024. The transition to tariff differentiation will make it possible to “reduce cross-subsidization, as well as combat gray mining,” the service said. They 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 will monitor this.
The government has been trying to reduce cross-subsidization for many years, but it is only growing. At the beginning of 2022, the maximum amount of the subsidy was increased to 241 billion rubles, and at the end of the year, amid a surge in inflation, the government, as an exception, allowed the regions to exceed the limit in 2023. As a result, business rates have increased sharply in a number of regions. In 2023, industry paid a record 294 billion rubles to reduce tariffs for the population. (see “Kommersant” dated March 23).
FAS wanted to fix a new, higher level of cross-subsidization for 2024, in the amount of 291 billion rubles. (see “Kommersant” dated March 24). However, the government did not agree and ordered the introduction of a mandatory transition of regions to differentiate tariffs for the population when the maximum subsidy levels are exceeded, Kommersant’s sources say. “It is impossible to endlessly restrain tariffs for the population at the expense of business; the only way out is to finally encourage the regions to actually reduce the “crossroads” by increasing tariffs for individuals with large amounts of energy consumption,” says one of Kommersant’s interlocutors.
The regions received the right to introduce differentiation of tariffs for the population at the end of 2021, but are reluctant to use it (see “Kommersant” dated December 5, 2022). A subject of the Russian Federation can independently set three tariff levels depending on the volume of electricity consumption. In fact, only Kuzbass switched to the new model on its own initiative, which then changed the volume of energy consumption upward three times (see “Kommersant” dated December 5, 2022). Tariff differentiation has also been applied in Crimea and Sevastopol since 2014, and since October 2023 it has been in effect in the Zaporozhye and Kherson regions, DPR and LPR (but all tariffs there are subsidized from the budget).
The Ministry of Energy told Kommersant that they support the FAS proposals. “The proposed measure introduces a clear system for controlling the growth of cross-subsidies, which increases the cost of paying for electricity by industrial consumers in the region at the level of the corresponding constituent entity of the Russian Federation,” the ministry told Kommersant. The Market Council (the energy market regulator) believes that the introduction of differentiated tariffs “will help solve the problem of cross-subsidization.”
“If the regional leadership is not able to control and reduce the “crossroads”, having all the tools and powers, it is necessary to introduce incentives and budgetary responsibility,” agree in the “Community of Energy Consumers.” “Economic development should not suffer due to someone’s sluggishness or tendencies towards populism.”
The proposed formula rather assumes maintaining the current volume of cross-subsidies at the level of 295–300 billion rubles in 2024, says Sergei Sasim, director of the Center for Research in the Electric Power Industry at the National Research University Higher School of Economics. The FAS formula does not include a connection with the pace or schedule for reducing cross-subsidization, he points out. “If regions set too high levels of energy consumption at minimum tariffs, then Perekrestok will grow confidently,” says Sergei Sasim. “So, in the Kemerovo region, the growth of Perekrestok was the maximum over the past five years.”
[ad_2]
Source link