The Russian Union of Industrialists and Entrepreneurs
(RSPP) and the VEGAS LEX law firm, involving FAS Russia and the Ministry of
Energy of the Russian Federation (Minenergo of Russia), held a round-table
meeting that was devoted to specifics and prospects for development of law
enforcement practices in tariff regulation taking into account the legislation
in force.

On 28 February 2018, the VEGAS
LEX law firm jointly with RSPP Committee for Energy Policy and Energy
Efficiency arranged and held a round-table meeting on “Tariff regulation 2018:
prospects for development of law enforcement practices” at RSPP.

Alexander
Sitnikov, the Managing partner of VEGAS LEX,
welcomed the audience and drew their attention to the fact that legislator
cannot provide for everything in the "written law", meanwhile, many
legal problems are resolved at the pre-trial law enforcement stage. Even exploring
the most authoritative expert opinions, including those of judges of the
Superior Arbitration Court of the Russian Federation (currently, it is the
Supreme Court of the Russian Federation), it is often impossible to get a valid
answer to the question raised. This happens because the judges prefer first to
see how lower courts will resolve a problem and, accordingly, what judicial
practice will be established. Under these circumstances, the problem for entities
subject to regulation is that activities are conducted much quicker than approaches
as to what is correct and what is wrong are formed.

Mr Sitnikov further highlighted the key indicators,
based on which one cannot state with certainty that the Supreme Court’s
clarifications contained in Resolution No.63 of the Plenum of the Supreme Court
of the Russian Federation dated 27 December 2016 were successful.

Alexey Voronin, the Deputy Head of FAS Russia’s Energy Regulatory
Department, and Artem Molchanov, the Head of FAS Russia’s Legal Department, spoke of the
specifics and promising trends in tariff regulation in electric power industry.

The National Plan for
Promotion of Competition in the Russian Federation for 2018–2020 determines the
guidelines of the state policy for promotion of competition including those in the
electric power industry. According to experts from antimonopoly service, certain
important steps are to be taken in this regard. In particular, it is necessary:
(i) to approve the 2018–2020 Competition Promotion Action Plan for this
industry; (ii) to determine a list of key indicators that ensure, inter alia, the
achievement of expected results in the industry and the results of promotion of
competition; and (iii) to adopt
a number of statutes and regulations that ensure the unified procedure for development,
approval and control of implementation of investment programmes of natural
monopoly entities and entities that conduct other regulated activities,
if the source of financing of investment program is the monetary resources
accounted for when approving the tariffs. In order to adopt the statutes and
regulations that ensure the unified procedure for development, approval and
control of implementation of investment programmes of natural monopoly
entities, certain steps are also to be taken.

The principal directions of
activities within the framework of the competition promotion plan are elimination
of tariff discrimination, transparency and continuity of tariff regulation. In
order to avoid tariff discrimination in the regulated sector, the changeover to
a reference control mechanism in the electric power industry is being carried out.

As for implementation of the
reference mechanism, FAS’s experts informed that they have initiated a
comparative analysis of the costs of the Russian local grid operators and the
global best practices.

The experts stressed the need
to create economic mechanisms for motivation and improvement of tariff
regulation procedure. In this regard, FAS Russia submitted to the Government of
Russia for consideration the draft federal law that prohibits exceeding the cap
tariff rates without consent of FAS
Russiaand approved methodology
guidelines for determination of the amount payable for technological connection
to electricity networks (Order No.1135/17).

Maria Golovko, the Head of the Industry Legal Framework Development Division of the
Electric Power Industry Development Department of Minenergo of Russia,
explained the key changes in statutory regulation, such as the Law on Licensing
of the Power Supply Activities, Decree No.1365 of the Government of Russia
regarding the procedure for depriving of the status of a last resort provider
for debts owed to a grid operator, etc.

In the second session of the round-table
meeting, its participants together with Evgeniy Rodin, the Partner and the Head of Energy practice of VEGAS LEX,
discussed the results of application of the basic provisions of Resolution No.63 of the Plenum of the Supreme Court of the Russian
Federation dated 27 December 2016 in the context of settlement of disputes
involving tariff regulation, using the real legal cases (both positive and
negative practice) as an example.

The program of the round-table
meeting received a great number of favourable feedbacks for the detailed
consideration of theoretical and practical aspects of tariff regulation, which allowed
clarifying a number of important issues relating to the topic of the meeting.

The major Russian energy
providers and companies operating in other industries, such as Auchan, Basic
Element, Gazprom Neft, Inter RAO, LUKOIL, Mechel, IDGC of Centre, Rosvodokanal,
RusHydro, Fortum, Unipro and others, took part in the discussion of the current
issues.

***

For more information on VEGAS LEX’s activities
in power industry, please click here.

For more information on VEGAS LEX’s activities
in antimonopoly regulation, please click here.

More from VEGAS LEX