Introduction of Social Norms for Energy Consumption Is Expected to Mitigate Effects from Tariffs Upturn

25 january 2019 | Rossiyskaya Gazeta

With the decrease in the cross-subsidization level, the tariffs must become more economically feasible for the consumers and thus get a boost to growth, says Victoria Gimadi, Director of Fuel and Energy Administration in the Analytical Center.

Victoria Gimadi
Victoria Gimadi
Department for Fuel and Energy Sector

"By introducing social norms for electricity consumption, they supposed to mitigate the effects caused the upturn of the tariffs for those who fit into the rules, and to bring the tariffs up to the required level, mostly at the expense of thriftless households," said the expert in the interview to the Rossiyskaya Gazeta.

To recap, the newly-introduced social norm of energy consumption assumed that after exceeding a certain level in monthly energy consumption, a household was to pay an extra fee. The project considered the levels of less than 300 kWh, from 301 to 500 kWh, and more than 500 kWh. However, due to the furious reaction from the media and public, it was decided not to develop the project any further. Introduction of the social norm, as well as repeal of the benefits for the houses equipped with electric stoves, were adjourned "until an unforeseeable date," says the newspaper. In the meantime, the Government made a principal decision to introduce, step by step, the fees for the spare capacity of the power transmitting facilities. It should eliminate the cross-subsidization between industrial consumers that equals to more than 100 bn rubles every year. So, the problem of the financial burden will be solved without the general public.

Gimadi also explained that the tariff policy could be altered by other means as well. For example, by providing low-income households with targeted aid. In her opinion, more economically feasible tariffs will allow for more well-targeted and reasonable aid for low-income families. "Such measure, however, has its own significant limits: if the benefits are more targeted, individual households have to play more actively (collect various supporting documents to obtain benefits), and more money has to be taken from the regional budgets," stressed Gimadi.

As for now, the Government decided to look for some other ways of how to decrease cross-subsidization. To the end of the year, when the Cabinet has counted the potential outcomes from the social norms introduction, they could change their opinion, adds the Rossiyskaya Gazeta.

Source: Rossiyskaya Gazeta