The Ministry of Energy is going to ban regions from managing electric grid companies

As Kommersant found out, the Ministry of Energy proposes to prohibit regional authorities from managing electric grid companies. A controlling stake in such assets will be forced to be transferred into the ownership of a large systemically important company with state participation or placed under its management. Rosseti believes that the initiative will ensure “reliable operation and sustainable development” of the network complex. Potentially, the initiative could affect Moscow, St. Petersburg, Tatarstan and Kuzbass, analysts say, expecting serious resistance from local authorities.

The Ministry of Energy considers it necessary to “provide for a legislative ban on the location of electric grid facilities under the right of ownership or other legal basis in the constituent entities of the Russian Federation and municipalities.” The head of the Ministry of Energy, Nikolai Shulginov, wrote about this initiative in a report for the State Duma on the progress of implementing parliamentary proposals following the government hour (“Kommersant saw the document dated November 20”).

It is proposed to transfer territorial network organizations (TGOs) from regional ownership “exclusively” to the ownership of the systemically important TGOs. At the same time, the “shares and interests” of such a systemically important TSO must be federal property. To do this, it is necessary to develop a mechanism for the transfer of network objects “by increasing the share of the Russian Federation in the authorized capital” of the systemically important TGO. The Ministry of Energy also proposes to allow systemically important TGOs to buy private grid companies at the expense of additional sources in the electricity transmission tariff.

State and municipal unitary enterprises (SUE and MUP) will have to completely transfer their assets to a systemically important company, Deputy Minister of Energy Evgeny Grabchak explained to Kommersant. “At the same time, we are not against the regions owning shares in joint stock companies,” he said. “But we believe that professional players, for example Rosseti, should have a controlling stake (more than 50%). Another option is to transfer the company to the management of a systemically important TSO. Network organizations should be managed by professionals, not regions. We are gradually moving towards the implementation of this concept.” Mr. Grabchak also explained that in the tariffs of the systemically important TSO during consolidation, he proposes to take into account “the purchase not of the entire company, but only of its electric grid property.”

The Ministry of Energy has been trying for several years to begin large-scale consolidation of small grid companies on the basis of large systemically important TGOs. Among the main contenders for this status is Rosseti. However, the bill on the creation of systemically important TSOs constantly faced criticism and was refined. Judging by the minister’s letter, the Ministry of Energy submitted the bill to the government on November 14 and expects that it will be submitted to the State Duma in December.

Rosseti told Kommersant that it supports the transfer of regional networks into the ownership of a backbone company.

This approach will ensure “reliable operation and sustainable development of the grid complex, will help reduce debt to power industry entities, and improve the investment climate in the regions,” they said.

TSO consolidation has been going on for several years. Thus, since the beginning of 2023, the number of TSOs has decreased by 23%, to 1.26 thousand units, the minister’s letter says. In 2024, 896 TSOs may remain in the country, and in 2025 – only 456. The number of small network companies began to decline sharply after the introduction of strict quantitative criteria for the volume of transformer capacity and the length of electrical networks.

The Ministry of Energy’s proposal will primarily affect large regions, including Moscow and St. Petersburg, Tatarstan, Kuzbass, and the Sverdlovsk region, says Sergei Sasim, director of the Center for Research in the Electric Power Industry at the National Research University Higher School of Economics. These constituent entities of the Russian Federation have serious administrative weight and, most likely, will oppose the initiative, the analyst notes. Often, the development of their own TSOs allows regions to more quickly solve infrastructure development problems, notes Sergei Sasim. He also considers the proposal to purchase assets at the expense of the tariff questionable: “If the deal is effective from an investment point of view, then large TGOs today still have enough resources, both their own and attracted.”

“Eliminating duplication of infrastructure and generous tariff decisions at the local level will be doubly useful if the requirements for reliability of energy supply are tightened for system-forming TGOs,” say the Energy Consumers Community. “At the same time, we believe that tariff sources are not suitable for consolidation – consumers have already paid for the creation and maintenance of these facilities and should not have to pay again for the reorganization.”

Polina Smertina, Dmitry Kozlov