Price increase for electricity and water: to be solved by the governors (part 2)

Price increase for electricity
(pic. 21.1 – Price increase for electricity)
Rates increase for water in 2014-2015
(pic. 21.2 – Rates increase for
water in 2014-2015)

The final version of the Regulation regarding the establishment of «social norms for electricity consumption» assigned the governors of Russia to set the size of the social norms in regions. Therefore, the heads of the territorial units will determine the rates in the parts of the country where they are in charge; in practice it will probably give bigger variation of «normalized kWh».

Some pilot projects of differential rates introduction will enter on the 1st of September 2013: in Krasnoyarsk and Zabaykal regions, in Orel, Vladimir, Rostov, Nizhegorodsky and Samara regions. And even now we can see the “swings” in the level of social norms in regions: for example, in Orel region the social norm is 200 kWh, in Nizhegorodsky regions – 50 kWh, and on Krasnoyarsk region – 110 kWh per month for 1 person.

An observation of region budgets put the governors in quit burning situation. As Igor Nikolaev, Director of the FBK' Strategic Analysis Institute says: «the heads of the regions, subsidizing electric power to disadvantaged population, will certainly run into debts. This will make them to reduce the size of the social norm getting in real bigger profit to the budget. The institute of natural monopolies problems provided the data about monthly volume of electrical power consumption in Russia: 800-100 kWh per person. This rate is one of the smallest in Europe and five times lower than consumption per month in the USA. New calculation order of payments for electric power will be common for all the territory of Russian Federation beginning from the 1st of July 2014. Social norms for water consumption will be determined according to similar schema but in 2015 (country-wide). The rating in certain regions will occur in 2014. »

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