Yevgeny Zverev, Senior Associate in the law firm S&K Vertical has shared with “RBK daily” his views as to how business can function when energy prices surge forward and whether one can appeal against new electricity bills.

25 April 2011

Transitional period

Can a business appeal against new electricity bills?

In the context of energy supply control, present time is called “transitional period” which shall end by January, 1, 2011. The Law “On state adjustment of tariffs for electrical and thermal energy in the RF” shall also terminate from this date. This implies that electrical energy shall be wholesaled at free prices, narrowing the scope of tariff adjustment.

On January, 18, 2011 the Presidium of the Supreme Arbitration Court of the RF examined a landmark case. The municipal business has lodged an appeal against an order issued by an agency authorized to prescribe electricity rates. The three judicial instances which previously examined the case stated that the given dispute will not fall under the cognisance of arbitration courts, because the prior law “On state adjustment of tariffs for electrical and thermal energy in the RF”, establishing jurisdiction of disputes about the prescribed rates to arbitration courts has lost its effect due to adoption of law “On electric power”.

The Supreme Arbitration Court of the RF, again referring the matter to court, disagreed with conclusions of inferior courts, and stated that within transitional period established prior to the entry into force of the Law “On electric power”, state adjustment of tariffs shall continue, and laws which regulate it, provide for the possibility to lodged an appeal against the prescribed rates to the arbitration court. The Supreme Arbitration Court of the RF has separately stated the necessity to apply conclusions of the given Resolution to similar cases.

As to tariff adjustment after the “transitional period’, the law “On electric power” establishes the principle of maintaining adjustment in socially important areas. At the wholesale market adjustment can be applied in the context temporary deficit, in the territories isolated from the united power grid of the Russian Federation, or in emergency situations.

—Officials at diverse levels argued that electric power cost shouldn't rise for more than 15 %, within a year, in reality consumers and representatives of committee on energy power quoted higher values - up to 60 %. Are there any legal limitations for growth of the electric power prices? What measures can authorities undertake to stabilize tariffs?

—According to p. 6 of the Rules of state adjustment and application of tariffs for electrical and thermal energy in the RF, adopted by the Government decree no. 109 “On pricing related to electrical and thermal energy in the Russian Federation” of 2.26.2004 tariffs and (or) their ultimate levels shall come into effect from the beginning of the next year and shall remain valid for the period of not less than one year.

Nadezhda Edina

Companies & markets, April 2011  

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