Govt approves new retail electricity market rules - Putin
NOVO-OGAREVO. May 4 (Interfax) - The Russian government has approved new rules for the retail electricity market, Prime Minister Vladimir Putin said at a meeting devoted to the issue.
"We spoke at a meeting in December last year at the Sayano-Shushenskaya hydropower plant about the need to take the next steps to improve the situation in the electricity market. So today let's talk about what's been done, what you have agreed on at government level and in dialog with the business community, namely approval of new rules for the retail electricity market," Putin said.
The rules, he said, "govern relations between suppliers and consumers of electricity and contain several major innovations."
Restrictions when changing suppliers are lifted, for example. "For consumers, restrictions on changing electricity suppliers are lifted. It used to be very hard to change organizations or enter the wholesale market," Putin said.
Consumers no longer need approvals from the regional or federal regulators, he said. "For small and medium consumers, with capacity of up to 1.8 megawatts, compensation is ruled out. Compensation is not required for large consumers if the switch to another supplier is made at the start of a year," he said.
The new retail rules solve the problem of power vendors and purchasers who do not operate in the wholesale electricity and capacity market.
"Sales companies lose the status of second-tier supplier of last resort if they have not followed the requirements of the law. Requirements to install modern metering devices and enter the wholesale market were established for such companies several years ago but in most cases they have not been fulfilled. Also, such suppliers have been buying electricity from other sales companies and selling it on to their own consumers with a markup. So the consumer has been is paying a markup twice, and has been unable to switch to another supplier. This problem is solved in the new rules," Putin said.
The new rules also introduce fines of three times the cost of electricity for unmetered consumption. "Liability for consumption without meters of contracts is increased considerably. In extreme cases fines will be three times the cost of electricity," Putin said.
Regarding payments for capacity, Putin said "in the past, settlements were made at the hour of peak internal consumption, so it was not advantageous to optimize your own electricity consumption schedule. From this year on, payment for capacity will be made during the peak hour of consumption for a region. This will save enterprises that shift their consumption from morning and evening to daytime and night hours a lot of money - up to 20% of the end price of electricity, experts say."
Putin gave ten days to come up with proposals for an effective single payments system for electricity.
"We need an effective, working single payments system. This is important, including from the point of view of raising the investment appeal of electricity.
Turning to Deputy Prime Minister Igor Sechin and Energy Minister Sergei Shmatko, Putin said he would like this issue to be addressed "very soon." "Report on the results of this work in te days at the latest," he said.
In general, Putin said more competition was needed in the retail electricity market.
"About 80% of the market in almost all regions is monopolized by one or two power sales organizations. The Russian Economic Development Ministry estimates that this is pushing prices for consumers up 5%-7%," he said.
"We need real steps to improve competition in the retail electricity market, moreover power companies must have a robust and predictable environment, robust and predictable demand," he said.
Power companies need guarantees that their considerable investments will be returned. "Experts estimate around 3 trillion rubles will be invested in generating and networks in the next three years," Putin said, recalling that measures to improve the situation in the electricity market had been taken recently.
