The question of what Russian Grids spends multi-billion dollars on will soon be closed for consumers. The Ministry of Energy together with the Federal Tariff Service are developing a methodology of “benchmark” parameters for three types of costs that the holding companies will be obliged to follow. Eventually, this will lead to a reduction in electricity transmission tariffs, officials hope. However, this will not happen soon: it will take more than a year to test the methodology.
The need to introduce benchmarking (optimization of a company's performance based on comparison with benchmarks) in the grid sector is long overdue. Consumers have repeatedly accused grid companies of inefficiency, complaining that due to the high grid component, electricity prices for industry have already reached the U.S. level and tend to reach the European level. As a result, large industrial enterprises, mainly metallurgical companies, began to develop their own generation: it became more profitable to build capacity than to connect to the energy system.
According to Alexander Starchenko, Chairman of the Board of the NCO “Community of Energy Consumers”, the share of the grid tariff in the price of electricity for large enterprises is already up to 50%. At the same time, according to consumers, the expenses of grid companies are unreasonably inflated. The investment program of the Federal Grid Company for almost RUR 1 trillion for five years has already been discussed twice on the platform of the “open government”, but the grid companies have not been able to prove the reasonableness of their expenses. In early April, the Ministry of Energy decided to limit the grid tariff to 40%, which was enshrined in the strategy of Russian Grids.
The introduction of benchmark parameters should ideally lead to a reduction in a number of grid companies' costs and, in the long term, tariffs. The necessary methodologies are currently being developed by state regulators: the Ministry of Energy is calculating benchmarks for investment costs and losses, while the Federal Tariff Service is developing a “benchmark” for fixed costs.
The FTS will present the first results of its work for public discussion in June, Maxim Egorov, head of the FTS Electricity Industry Regulation Department, told RBC Daily. The agency has taken the experience of foreign regulators, including the UK, as a basis. It also took into account the proposals of Russian Grids, small grid companies and the expert community. As a result, the FTS will develop a “federal benchmark”, but the final parameters will be set depending on the specifics of the region and the area where the company operates. For this purpose, special increasing or decreasing coefficients will be introduced. At the same time, benchmarking will be applied to companies that switched to RAB from the second regulation period.
The Ministry did not specify at what stage the methodologies being developed by the Ministry of Energy are at. According to a source close to Russian Grids, the Ministry of Energy is also going to take into account the parameters of international grid companies. Now this information is available to the greatest extent to the participants of international data exchange consortiums (ITOMS and IDBC). On these platforms, global companies have been providing their own parameters for comparison and identifying best practices for over a decade now.
In other words, Russian Grids, as a full member of the community, makes its cost data publicly available. At the same time, the company gets an opportunity to compare them with the data of others. In this way, the company will be able to clearly see areas where cost optimization is possible, or points of underfunding.
At the initiative of the Ministry of Energy, two subsidiaries of Russian Grids will be the first to join the consortium: IDGC of Urals and IDGC of Center and Volga. The companies will most likely get access to the consortium data in May, and by June their own reports will be generated, which will also be included in the comparison. However, Dmitry Bobkov, spokesman for Russian Grids, insists that the initiative came from the company itself. According to him, the holding company has been working on introducing benchmarking for a long time, and information on the activities of the world's leading companies will also make it possible to significantly improve the performance of Russian Grids' subsidiaries and affiliates.
The Ministry of Energy and the Federal Tariff Service are to develop the final methodologies by the fall, and the benchmark system is to become operational in 2014.
Sergey Pikin, Director of the Energy Development Fund, is confident that the introduction of benchmarking will eliminate consumer complaints about the inefficiency of grid companies. However, consumers will not notice the positive effect immediately. “While the methodology will be implemented, practiced, while the companies will fully begin to be regulated by the new standards, it will take several years,” the expert believes. According to Maxim Egorov, this term is the most probable, but there is no final decision yet on how much time companies will be given to come up to the “benchmarks”.
Source: RBC Daily
