The Energy Regulation and Markets Review - Stikeman Elliott

Russia
has been approved for non-discriminatory access for independent organisations to gas
transportation and distribution networks – the gas transportation system of Open
Joint‐Stock Company Gazprom 49 and local gas distribution networks. 50 Access is
provided given free capacity in the network.
In accordance with the legislation on natural monopolies, non-discriminatory
access has also been established to oil and petroleum product transportation services
via major pipelines for the purpose of oil and petroleum product consumption on the
Russian domestic market and for their export. 51 In providing access, the through capacity
of the pipelines is taken into consideration.
iii Rates
The following are applied to all natural monopoly entities in the energy sector and in
other cases envisaged by law:
a price regulation;
b identification of consumers subject to mandatory provision of services (nondisconnectable);
and
c regulation of investment and other regulation methods. 52
State regulation of prices (tariffs) in the electric power sector must ensure an economically
reasonable rate of return on capital invested in performance by electric power companies of
regulated activities. At the same time, consumers must be protected against unreasonably
high prices (tariffs) for electric power (capacity). Price (tariff) setting must take account
of how the legislation on energy saving and raising energy efficiency is observed. 53
The government establishes the fundamentals for price-setting in the sphere of
regulated prices (tariffs) in the electric power sector and the rules for state regulation
(review and application) of prices (tariffs) in the electric power sector. At the same time,
regulated prices (tariffs) may be set either numerically or as a formula or procedure for
determining such prices. 54
The objective is to achieve a balance of economic interests of suppliers and
consumers of electric power. This means accessibility of electric power with full recovery
of invested capital in regulated spheres of activity in consideration of an economically
49 Resolution of the Government of the Russian Federation, dated 14 July 1997, No. 858.
50 Resolution of the Government of the Russian Federation, dated 24 November 1998, No. 1370.
51 Resolution of the Government of the Russian Federation, dated 29 March 2011, No. 218;
Article 6 of the Federal Law on Natural Monopolies.
52 Article 6 of the Federal Law on Natural Monopolies; Article 9, Clause 3 of the Federal Law on
Electric Power.
53 Articles 6 and 20, and Article 23, Clause 2 of the Federal Law on Electric Power.
54 Article 23, Clause 1 of the Federal Law on Electric Power; Fundamentals of price setting in
the sphere of regulated prices (tariffs) in the electric power sector and Rules for state regulation
(review, application) of prices (tariffs) in the electric power sector, approved by resolution of the
Government of the Russian Federation, dated 29 December 2011, No. 1178.
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