Report: Govt to redirect cross-subsidizations for power in 7 years

MOSCOW, Oct 5 (PRIME) -- The Russian government will redistribute the burden of cross-subsidization in the power sector, where small and medium-sized industrial consumers pay more to compensate for low household tariffs to large producers over the next seven years, Energy Minister Alexander Novak said late on Thursday.

Currently, the major part of cross-subsidization’s burden lies on small and medium-sized companies, as large industries are connected to grids of Federal Grid Company of Unified Energy System (FGC UES), the power tariff of which is four times lower than tariffs for other consumers, he said in an interview to Business FM radio station.

“That is why we’ve decided to redistribute cross subsidization among all consumers, meaning transition of a part of the burden to large industrial consumers…We’ve discussed that within the government, an made a soft decision that this process will happen gradually over the next seven years,” he said.

Different authorities have different estimates of cross-subsidization. The Federal Antimonopoly Service said earlier that there were more than six types of cross-subsidization in Russia totaling 220 billion rubles in 2018, but Deputy Energy Minister Vyacheslav Kravchenko previously estimated cross-subsidization at 390 billion rubles.

(66.2115 rubles – U.S. $1)

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