PRESS: Russian min offers higher FGC UES tariffs for big consumers

MOSCOW, Jan 25 (PRIME) -- Russia’s Energy Ministry has proposed raising the Federal Grid Company of Unified Energy Systems’ (FGC UES) tariffs for large consumers to compensate a shortfall of revenues caused by the abolishment of cross subsidization, Kommersant business daily reported Wednesday citing Minister Alexander Novak’s letter to the government.

Under “last mile”, the mechanism of cross subsidization, industrial consumers had to pay for power transmission services both to FGC UES and distribution grids, whose tariffs were higher, but who actually did not provide services. The practice was abolished in the majority of Russian regions in 2014.

Novak has also proposed compensating a shortfall of revenues of distribution grids for 2016 with own funds of Russian Grids, including those received in dividends of subsidiaries. The payment could amount to 7.8 billion rubles, while a shortfall of distribution grids’ revenues in 2016 is estimated at almost 18 billion rubles. The ministry earlier proposed compensating the reminder with federal budget funds, but the government earlier opposed the idea.

In 2017, a shortfall of revenues is estimated at 13.64 billion rubles and is slated to fall to 10.4 billion rubles after compensation measures.

(59.2168 rubles – U.S. $1)

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