Tariff by standards: FAS wants to unify the cost of electric grid maintenance

The Federal Antimonopoly Service (FAS) has proposed to review the basic approaches to regulating the activities of electric grid organizations. Starting in 2026, a reference method will be gradually applied to determine the reasonableness of their costs — the corresponding draft government decree has been developed and is currently being coordinated. Izvestia investigated what could change in the industry itself and for electricity consumers.

A unified approach

Each subject of the Russian Federation has its own tariffs for electricity transmission. They are calculated by regional regulators based on data on the expenses of network organizations, of which there may be several dozen within the borders of one region. At the same time, there is a subjectivity factor in determining economically reasonable costs. As a result, de facto grid companies compete for a "share" in the boiler tariff for electricity transmission services, i.e. for the best regulatory conditions.

Back in 2018, the president instructed the government to make decisions aimed at improving tariff regulation in the energy and housing sectors, providing for the introduction of a reference principle for tariff formation. "In some regions, there is a practice of pushing through unjustified tariff increases. As a result, the proceeds do not go to the development of regional energy, but, accordingly, into the pockets of specific individuals close to those who make decisions of this kind. There is a proposal to change this situation by introducing a reference principle for tariff formation," Vladimir Putin said at a meeting of the commission on the strategy for the development of the fuel and energy sector and environmental safety.

After that, the government adopted the concept of introducing tariff setting mechanisms, where long-term regulation, including the use of benchmarks, was identified as a key condition for stable economic growth and an improved investment climate. This method is based on a comparison of performance indicators of various organizations in the same industry, which makes it possible to determine the most effective cost values. This becomes a kind of guideline for all market players.

According to Maxim Shaskolsky, head of the Federal Antimonopoly Service, the use of standards in electric grids can not only ensure transparency and objectivity of regulation, but also lead to an increase in the reliability and quality of energy supply due to sufficient funds for infrastructure maintenance.

How it works

The Service has developed a draft government decree providing for the phased implementation of benchmarks for determining operational (controlled) expenses from 2026. The document not only describes the main approaches to the implementation of this method, but also contains specific parameter values.

At the preparatory stage (from 2017 to 2023), technological processes in the grid complex were investigated — over 14 million conventional pieces of equipment were analyzed, more than 600 factors affecting its operating conditions.

As explained to Izvestia by the FAS, it is planned that the standards will be calculated for 59 types of equipment: 52 main power grid and seven secondary, including those related to digitalization. One of the key points will be to take into account network wear, because now new equipment receives the same financing in tariffs as old equipment, which is repaired more often. At the same time, the depreciation coefficient will also stimulate the renewal of funds — it will not be applied for equipment with a service life of more than 70 years, which will prompt modernization.

In addition, a coefficient will be introduced that takes into account local characteristics, from the influence of socio—economic to climatic factors. Regions with comparable conditions will be grouped into 24 clusters. A grid distribution coefficient will also be introduced, allowing, for example, to take into account the distance of power facilities from repair bases, which in turn affects changes in transportation costs.

As a result, as Gennady Shopov, deputy head of the department, explained at the FAS seminar in the spring, each network organization will receive its own reference costs. The changes will affect almost all market players, so the agency suggests a phased implementation. This will allow energy companies to adapt to the new method, including by increasing their own efficiency.

"It's no secret that the grid complex has different indicators depending on the regions. These features must be taken into account when forming tariffs. Ultimately, the most important thing for consumers is reliable and high—quality energy supply at an affordable price, and for companies in the sector it is long—term regulatory parameters with a consistent approach to their formation," Viktor Rogotsky, Honorary worker of the Fuel and Energy Complex, Adviser to the Governor of the Yaroslavl Region on energy issues, commented on these proposals.

The effect of the implementation

Rosseti, Russia's largest electric grid holding company, supports the transition to standards. This will eliminate a subjective approach to estimating grid maintenance costs, simplify and increase the transparency of tariff regulation, and have a positive effect on the reliability and quality of electricity supply, the company said.

"Eliminating the subjective factor when making tariff decisions will also allow for more systematic work on infrastructure modernization," added Viktor Rogotsky. In addition, due to the general conditions of regulation of network companies, the level of socio-economic development of nearby regions and conditions for doing business in them will be equalized.

Yuri Stankevich, Deputy Chairman of the Energy Committee of the State Duma of the Russian Federation, recalls that last year an important change had already taken place in the regulation of the Russian energy sector — the institute of systemically important territorial grid organizations was introduced, designed to become a single center of responsibility for reliable energy supply to consumers in the regions. "The new principle of cost standards is designed to ensure transparency and objectivity of tariff decisions and lead to an increase in the quality of energy supply and an increase in the efficiency of network organizations. In fact, this is a logical continuation of the reform that has begun," he said.

At the same time, no increase in the cost of services for consumers is expected. According to Sergey Sasim, director of the Center for Research in the Electric Power Industry at the Higher School of Economics, operating costs (mainly staff salaries and repair costs) account for about 40% of the revenue of grid companies. The share of transmission services in the final price of electricity averages 39%. "Taking into account this ratio, the use of benchmarks will not lead to a significant increase in final electricity prices. According to our estimates, the national average projected impact of the implementation of the reference principle for determining operating costs on the final price will not exceed 0.5%," he says.