OREANDA-NEWS. December 23, 2013. The Government of the Russian Federation issued a Decree approving the Rules for antimonopoly regulation and control in the electric power industry. The Rules were devised by the Federal Antimonopoly Service (FAS Russia) to enforce the federal laws passed in 2004–2012.

The Rules determine specifics of antimonopoly regulation and control on the wholesale and retail markets of electric power and capacity.

The Rules establish the methods, subject and results of control over performance of the wholesale and retail markets of electric power and capacity.

The Rules includes a list and description of state regulation and control measures, applied upon establishing a fact of manipulating prices for electric power (capacity) by a subject of the wholesale market, other facts of monopolistic activities, as well as in the course of exercising control over economic concentration, to prevent abusing and prevent price manipulation.

To identify signs of violating the antimonopoly law, in the part of manipulating prices the wholesale and retail markets of electric power, the Rules establish the criteria of significant changes of price (prices) for electric power and (or) capacity, as well as the procedures for determining them.

The criteria of significant changes of price (prices) for electric power and (or) capacity are determined separately for the wholesale and retail markets and constitute the conditions, complying with which price (prices) for electric power and (or) capacity can change significantly.

The Rules establish a list of documents and information to be submitted by an economic entity to FAS with a petition on determining conditions by the antimonopoly authority for participating by this economic entity in competitive take-off, as well as the procedures for considering such petitions.

Also the Rules provide for a list of factors, on the basis of which can be established the dominant position of an economic entity (group of persons) with less than 20% share of installed capacity of its generating equipment or the share of energy generation using the above equipment within the boundaries of a free power transfer zone.

The Rules define the concept of “market power”.

The Rules formalize possibility of applying the following measures by the antimonopoly authority against violators should facts of price manipulation for electric power (capacity) be revealed, and as part of control over economic concentration:

- State regulation of prices (tariffs)

- Restricting prices in price bids

- Introducing restrictions in the form of a condition on filing only price-accepting applications

- An obligation of a participant of the wholesale market to provide to the wholesale market in the maximum possible volume all electric power and capacity generated using the power-generating equipment owned by this participant.

“The work on the document was long and required multilateral accord upon it between the authorities, professional associations, sectoral infrastructure organizations and the business-community. As a result, a dry and precise document is adopted where the basic principles of regulating the markets of electric power and capacity are crystallized. Without an exaggeration, adopting this document ended a whole epoch of discussions, decisions, verifying the FAS position at Courts, when every provision was challenged and everything unnecessary was cut off”, stated the Head of FAS Department for Control over Electric Power Industry, Vitaly Korolyov.

Deputy Head of FAS Anatoly Golomolzin also emphasized that the Rules increase transparency of the work of the antimonopoly authority on control over wholesale and retail markets of electric power. Market participants are given clear and straightforward requirements to the market conduct complying with which levels the risks of being held administratively liable for violating the antimonopoly law.

“The Rules reflect many years of enforcement practice of the Law “On Protection of Competition” and “On Electric Power Industry”. Antimonopoly cases were investigated against generators, sales companies and large consumers, for example: cases against “Mosenergo” OJSC, the group of companies of “RUSAL” OJSC, “TGK-6”OJSC, “Volzhsk TGK” OJSC and “Urussinskaya GRES” CJSC, “Marienergosbyt” OJSC, and others”, commented Anatoly Golomolzin.

“It is important that the Rules not only facilitate suppressing violations of the antimonopoly law but also their prevention. Some provisions of the Rules, for instance, in the part of exercising control over competitive capacity take-offs are preventative, when dominate entities on the market are given the conditions for participation to avoid adverse consequences for the market as well as for the participants, whose actions could be classified as price manipulations”, emphasized Anatoly Golomolzin.