The Energy Regulation and Markets Review - Stikeman Elliott

Russia
There is a unified legal framework for formation of the gas market. 60 For the
purpose of developing market principles for setting gas prices, part of the natural gas on
the Russian domestic market must be sold on commodity exchanges. 61
ii Energy market rules and regulation
In the electric power sector, the government determines: 62
a electric power and capacity wholesale market price zones – areas for which an
equilibrium wholesale market price is formed; 63
b electric power and capacity wholesale market non-price zones – areas in which
the wholesale trade in electric power (capacity) is conducted at regulated prices
(tariffs); and
c technologically isolated territorial electric power grids – energy networks with no
technological connection to the Russian Unified Power Grid. 64
The legislation establishes in which cases electric power (capacity) prices in the electric
power sector and those for services rendered on the wholesale and retail markets are
subject to state regulation. 65
In the gas supply sphere, state pricing policy is designed to:
a create favourable conditions for seeking, exploring and developing gas deposits,
extracting, transporting, storing and supplying gas;
b
c
expand the sphere of application of market prices to gas;
exercise control over application of state regulated prices (tariffs) in the gas supply
sphere (the tariffs may be differentiated in consideration of the economic and
social conditions in the various Russian regions);
d reimburse the organisation owning the gas supply network for gas payment debts
incurred by non-disconnectable consumers ;
e encourage use of gas as a motor fuel; and
f ensure the competitiveness of Russian gas on the world energy market. 66
60 Article 16 of the Federal Law on Gas Supply in the Russian Federation.
61 Resolution of the Government of the Russian Federation dated 16 April 2012 No. 323 on sale
of natural gas on commodity exchange.
62 Article 3 of the Federal Law on Electric Power.
63 Two such zones have been identified: Europe and the Urals; Siberia (see Appendix No. 1 to
the Rules for the electric power and capacity wholesale market, approved by resolution of the
Government of the Russian Federation, dated 27 December 2010, No. 1172).
64 Seven such systems have been determined: Kamchatka Territory; Magadan Region; western
region of the Republic of Sakha (Yakutia); central region of the Republic of Sakha (Yakutia);
Sakhalin Region; Chukotka Autonomous Area; Taimyr (Dolgano-Nenets) Autonomous Area
(see the list approved by resolution of the Government of the Russian Federation dated 27
December 2004 No. 854 on approval of the Rules for operational dispatch management in the
electric power sector).
65 Article 23.1 of the Federal Law on Electric Power.
66 Article 20 of the Federal Law on Gas Supply in the Russian Federation.
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