The government’s objectives, regulatory changes and tariff growth. Guarantees to investors ahead of privatisation in the electricity sector
Wednesday, February 1st, 09:30-12:20
Location: The Ritz-Carlton Hotel, Washington 1-2 Hall
|09:30–10:00||Guests arrive, complimentary coffee|
|10:00–10:20||Speech: Pavel Shpilevoy, Ministry of Economic Development of the Russian Federation|
|10:20–10:40||Speech: Grebtsov Pavel, Management board member, Deputy Chairman of the Moscow Regional Energy Commission|
|10:40–11:00||Speech: Mikhail Slobodin, “Community of Buyers on the Wholesale and Retail Markets of Electricity (Capacity)”|
|11:00–11:20||Speech: Igor Mironov, NCP “Council of Power Producers”|
Participation in this workshop is by personalized invitation only.
The Russian utilities sector has experienced a difficult year. Last February, Prime Minister Vladimir Putin asserted that electricity tariff growth was too high in some regions and should be curtailed. Pre-election rhetoric has generated negative sentiment toward the sector. The regulatory framework has since been amended and the rules have been changed throughout the entire value chain (generation-transmission-distribution-supply/retail). Some measures have already been implemented, while others will take effect from 2012 and beyond. Next year’s tariff hike will take place on July 1 instead of January 1, as in the past.
What are the government’s key goals and priorities for 2H12 and beyond? What other key regulatory changes are needed, and what tariff growth would be acceptable for Russia over the next five years?
Following the privatisation and breakup of UES in mid-2008, the sector has undergone consolidation by state-controlled utilities. This process has peaked now.
The government devised a privatisation plan in 2011 that includes the utility companies.
Smaller stakes in RusHydro and Federal Grid Company, for instance, could be offered in 2012. Meanwhile, the privatisation process for MRSKs could start in 2012, though this would be contingent upon a predictable, transparent and stable long-term regulatory framework. What and how much can the government guarantee investors this time? Has the search for strategic/portfolio investors begun?