Energy Ministry proposals on 'last mile' only exacerbate problem, RSPP says
MOSCOW. Sept 23 (Interfax) - The bill proposed by the Energy Ministry to resolve the problem of the 'last mile' in the electricity sector only exacerbates the situation and contradicts legal norms, the Russian Union of Industrialists and Entrepreneurs' (RSPP) commission for the electricity sector believes.
Commission members said at a meeting on this issue on September 19 that the bill contradicts the principles voiced earlier at meetings on the last mile issue with Prime Minister Dmitry Medvedev, Deputy Prime Minister Arkady Dvorkovich and Kremlin aide Andrei Belousov, the RSPP said in a statement.
The bill creates "special favorable conditions" for grid companies and does not reduce their costs, and the passage of the bill would increase the electricity costs of industrial consumers, the commission members said. Provisions of the bill also discriminate against certain companies and regions, they concluded.
Representatives of steelmaker NLMK, Lukoil , petrochemicals group Sibur, aluminum giant Rusal, mining group Metalloinvest and other companies took part in the discussion. The commission members decided to draft a consolidated position on the bill and submit it to the government and State Duma.
Under the Energy Ministry bill, lease contracts for last mile facilities throughout the country, except in 19 regions, expire on January 1, 2014. The contracts are being extended until 2025 in four of these regions - Buryatia, Trans-Baikal Territory, Amur Region and the Jewish Autonomous Region, and by three or five years in 15 regions. The special tariff voltage level VN1, consisting of the Federal Grid Company (FGC) tariff and the average cross subsidy rate in the region, is being introduced for consumers in these regions.
The resulting figure in 2014 does not exceed consumers' current payments in these 15 regions and will subsequently decrease: for the three-year extension 66% of the cross subsidy rate is added to the FGC rate in 2015, 33% in 2016 and zero in 2017. For the five-year extension, the figures will be 80%, 60%, 40%, 20% and zero in 2019, respectively. In all 19 regions, if interregional distribution grid companies do not manage to reduce costs sufficiently, it is proposed that up to 50% of lost grid revenue be covered by the federal budget.
