Cross-Subsidization in Tariff Design for Electricity

Chernavskii, S. Ya.; KHACHATURYAN, N. R.; TSVETAEVA, Z. N.

doi:10.36871/ek.up.p.r.2020.07.03.004

EUPR

2020

DOI: 10.36871/ek.up.p.r.2020.07.03.004

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Cross-Subsidization in Tariff Design for Electricity

S. Ya. Chernavskii¹,

N. R. KHACHATURYAN²,

Z. N. TSVETAEVA³

Abstract: The article highlights one of the unsolved problems of the Russian power industry management. In most of the works, cross-subsidization in the electric power industry is considered in negative connotations. It is shown that in the design of the electricity tariff with cross-subsidization, along with the negative side, there is also a positive side. The article presents views on the problem of people who are active in decision-making, but pas-sive in the public scientific space.

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2021

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Controversial Results of the Reform of the Russian Electric Power Industry in 1986–2008

Chernavskii

2021

Ekonomicheskaya nauka sovremennoy Rossii

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The article discusses the ambiguous results of the reform of the Russian electric power industry. Some of the intended goals of the reform have been achieved, while others have not yet been achieved, and the reform should be continued. Although more than 13 years have passed since the final stage of the reform, there is no agreement in the literature on many key issues characterizing the reform: an explanation of the reasons and factors that influenced the decision to reform the Russian electric power industry, the goals of the reform, the type of the reform model, the validity of its adaptation to the real Russian conditions and institutions that had developed by the beginning of the reform, the results of the reform and their value for society. It was found that contradictory results of the reform are caused by both objective and subjective factors. Along with obvious successes (e.g., denationalization of the industry) and obvious failures (including failure to create retail electricity markets) many results (elimination of vertical integration, level of competition on wholesale electricity markets, etc.) are not observable and have not received a clear and unambiguous assessment of their usefulness to society. Studies using modern economic theory and economic-mathematical modeling were required. No statistically significant economies of scale in electricity generation have been found in large companies generating electricity. Thus, the use of competition as a mechanism to coordinate the interests of society, producers and consumers of electricity and the creation of a wholesale electricity market is scientifically justified. Unification of small producers for their withdrawal to the wholesale electricity market should be accompanied by an economic analysis of the cost function of the united company. It is shown that in the short term the wholesale electricity market created in the first and second price zones is close to competitive, but in the long term there is a threat: this market may become uncompetitive.

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Controversial Results of the Reform of the Russian Electric Power Industry in 1986–2008

Chernavskii

2021

Ekonomicheskaya nauka sovremennoy Rossii

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Cross-Subsidization in Tariff Design for Electricity

Cited by 1 publication

References 0 publications

Controversial Results of the Reform of the Russian Electric Power Industry in 1986–2008

Controversial Results of the Reform of the Russian Electric Power Industry in 1986–2008

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