Energy Retail Rules in Russia


[Alexander Merkulov][October, 11 2006]On 1st September 2006, the new Rules that regulate the relations between energy sales companies and consumers came into force (Decree of the Government of Russian Federation â„– 530 from 31.08.2006: About the approval of the Rules of electric energy retail markets functioning in the period of reform of the electric energy sector).

A new concept of the guaranteed supplier (GS) has been introduced to the energy retail market. The GS has to sign a contract with every interested customer who is situated in its activity zone. The Rules define the order of preparation and fulfillment of public energy supply or energy sale contracts between the GS and the client.

The Rules form the new price system for the energy retail market. A part of the energy is to be sold at a deregulated (non-fixed) price, which reflects the cost of energy in the competitive energy wholesale market. All energy volumes in the wholesale market exceeding the regulated volume are to be bought for the deregulated “day ahead” price that has to be transferred to the retail client. This system applies to all types of customers except residential consumers, who will continue to pay for their electricity on the basis of the tariffs regulated by the government.

In addition, the Rules stipulate that customers with connected power capacity exceeding 750 kWA must have a new metering system with hourly metering capability. They also have to plan their hourly consumption.

The hourly up- and down- derivatives are to be paid for at the prices which reflect the price of the balancing energy wholesale market.

The retail market was totally regulated before, so the new Rules are the first step to the liberalized retail market.