ANDREY TSYGANOV: FAS CONTINUES CONTROL OVER PRICING IN THE HEATING SUPPLY SECTOR
31-07-2019 | 11:58
To prevent monopolistically high prices
On 8 July 2019, Deputy Head of FAS Andrey Tsyganov chaired a regular meeting of the Market Analysis Commission. Experts considered an updated version of the guidelines of analyzing the state of competition on the market of heat supply services to end consumers and the findings of an annual market survey in 2018.
In 2018 FAS undertook several measures to improve regulation of heating supply services.
For example, FAS devised the Rules1 for technological connection to heating supply systems, including the Rules for non-discriminatory access to technological connection to heating supply systems as well as the Rules for non-discriminatory access to heating energy transmission services and heat carriers.
The Rules simplify the current procedure for connection to heating supply systems, increase openness and transparency of the connection fee, regulation relations with adjacent organizations.
To eliminate legal gaps and simplify enforcement practice, the concepts of “drawn-off point” and “connection point” for connecting capital construction facilities to heating supply systems are clarified.
The Rules allow the regulators to review fees for connecting to heating supply systems, set on a case-by-case basis, if, for instance, the drawn-off points or the applied load change.
The Rules will help market participants to overcome difficulties emerging in the course of connecting to heating supply systems: long period of waiting for technological connection, no guarantee of the results, excessive documentary requirements.
FAS also approved the minimum and maximum tariff levels for heating energy (capacity) produced through combined generation of electric and heating power by heating power sources with 25 MW and more generating electric power capacity for 20192.
“FAS analyzed the market of heat supply services to end consumers in order to establish the dominant position of heating suppliers and heat networks in Russia. As we see, in most regions there is practically no competition on this market. Also there are facts of violating the Law “On Protection of Competition” by the authorities. It means that solutions must be found for the heating supply market and measures undertaken to develop competition”, said Commission Chairman, Deputy Head of FAS Andrey Tsyganov.
He also stressed that “heating supply is regulated by the state and tariffs are set for these operations”.
“Since 2019, due to the changes to the law3,such energy carrier as steam is no longer on the state-regulated market, so all contracts regarding supplies of heating energy in the form of steam are concludedupon mutual agreement of the parties. Therefore FAS continues careful control over pricing in the heating supply sector, especially after liberalization of steam prices to prevent monopolistically high prices on the market”, concluded Deputy Head of FAS.
As a special item on the agenda, the Commission discussed new types of nicotine products and reached an opinion that it is necessary to survey the market of nicotine-containing products and devices for consuming nicotine by means different from tobacco smoking. The findings will be presented for expert consideration by the end of 2019.
1 Approved by No. 787 Decree of the Government of the Russian Federation of 05.07.2018
2 Approved by No. 1547/18 FAS Order of13.11.2018
3 No. 404-FZ Federal Law “On amendments to the Federal Law “On heating supply” of 01.12.2014
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August 5, 2019 at 10:00AM