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On July 30, 2015, member of the RSPP Board Bureau Sergei Generalov chaired a roundtable conference, Changes in the regulatory procedures for natural monopolies in the energy sector after the Federal Tariff Service’s liquidation, organized by RSPP’s Committee on Competition and the VEGAS LEX law firm.

Mr. Generalov offered greetings to the conference participants, listing some questions that businesses have had in connection with the July 21, 2015 Presidential Executive Order that eliminated the Federal Tariff Service (FTS) transferring its responsibilities to the Federal Antimonopoly Service.

Vitaly Korolyov, head of FAS Department for Control over Electric Power Industry, explained how prices in the industry will be regulated without FTS. He answered questions about the regulatory acts earlier issued by FTS and talked about the changes that could affect the regulatory framework for pricing as well as about the new approaches to electricity price regulation that the enlarged regulator will use. According to the expert, FAS has already established document flow and effective communication with the outgoing agency, which will enable it to conduct an effective price-setting campaign.

Mr. Korolyov also informed the discussion participants about FAS head Igor Artemyev’s meeting with First Deputy Prime Minister Igor Shuvalov earlier that day, where the two officials covered a series of issues concerning the future Federal Antimonopoly Service structure (the new structure is most likely to be established by August), the changes to be made to the FAS statutes, approaches to regulation and other issues. The new antimonopoly regulator will not just accelerate the implementation of government decisions in the power generating industry, but will make sure that these decisions make companies as efficient as possible.

VEGAS LEX Managing Partner Alexander Sitnikov asked some questions that the business community has been concerned about – whether the basic law on natural monopolies will change, and if yes, how dramatically and how fast; what substantial differences the FAS and FTS had on regulating this industry; what will happen to regional tariff regulators; and if any major changes will be made to the larger regulatory framework.

The participants had a chance to ask the FAS representative any questions throughout the discussion. The participants of the roundtable included representatives of major energy companies such as Lukoil, Gazprom Neft, Gazprom teploenergo, Inter RAO, Fortum, Oboronenergo, Sibur Holding, Enel Russia, RusHydro, Energoprom Group, E.On Russia and others.

The roundtable discussion was an important industry event, the first one since the FAS-FTS merger; many issues will need to be sorted out in the near future. At the end of the discussion, the participants thanked Mr. Korolyov for his clarifications of the legal consequences of FTS being absorbed by FAS. Understanding these consequences is crucial to building a dialogue between businesses and government.

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For more information on VEGAS LEX’s services related to antimonopoly regulation, please go here.

For more information on VEGAS LEX’s services to the energy industry, please go here.

Photo supplied by Solovey Ignat (RSPP Press Service)