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Electric power prices and Russian power industry reforms

Author

Listed:
  • N.I. Suslov (nsus@academ.org)
  • N.V. Chernaya (nad@ieie.nsc.ru)

Abstract

The paper explodes the myth that electric power prices in Russia are lower than those of the world. Being calculated on the base of purchasing power parity, such prices for industries were 2.5 times higher in Russia than in Norway and 1.4 times higher in Finland and the USA in 2008. Analyzing the wholesale and different consumers' electric power prices over 2001-2011, we can state that 2009, which is the year following the reform of the RAO Unified Energy System of Russia, stands out against a ground of other years under study. We also can state that despite a 50% drop in the real prices set by regional power generating companies, the real prices for different consumers were higher by 9%. Subject to the different drops in wholesale electric power prices taken place after the reform, we can identify zones which are characterized by different levels of competitiveness among power generating companies. Moreover, under lack of both competitive environment among energy power suppliers and governmental control in the post-reform period, network suppliers used to overstate their required gross operating incomes to calculate prices by RAB method.

Suggested Citation

  • N.I. Suslov (nsus@academ.org) & N.V. Chernaya (nad@ieie.nsc.ru), 2012. "Electric power prices and Russian power industry reforms," Journal "Region: Economics and Sociology", Institute of Economics and Industrial Engineering of Siberian Branch of RAS, vol. 3.
    • Handle: RePEc:nos:regioe:2012-3_10
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