leadership within Russia is contested by St Petersburg - the report, Moreover, Moscow’s which includes both cities among the top 20 European financial centres, puts Russia's second biggest city in 69th place, three positions up since the previous GFCI. electricity industry: the good old days are gone Russia’s March 23, 2011 1:28 pm Vladimir Putin has been regaling TV viewers with his memories of the good old Soviet days when electricity was cheap and Russians paid their utility bills on the nail. But fond stories from the Russian prime past may just rub salt in the wounds of his minister’s people as a sharp increase in energy prices kicks in. The government has sanctioned a 15 per cent increase in household electricity tariffs in 2011 well above its inflation target. And in a final break with the Soviet past, energy – prices for industrial consumers have been deregulated altogether. Industry experts say higher electricity prices are essential to stimulate investment in aged power plants and prevent a collapse of the system. But hiking prices is Russia’s politically risky, particularly in a country where energy supplies have been subsidized for so long. remember very well how my father would go out onto the stairway and carefully, in “I the most attentive way, write down the numbers on the electricity Putin told a meter,” Russian TV interview at the our older generation is very punctual weekend. “You know and scrupulous. It was just kopeks then, but he noted each kilowatt and always paid on time.” Putin is not in a position to be sentimental about rising energy costs. His government is facing a dilemma as investors warn that without higher prices they will be unable to raise the estimated $100bn needed to modernize generation capacity and meet rising Russia’s demand for power. At the same time it is politically risky for the government to allow energy price hikes, particularly in an election year. reality is Russians have to pay higher electricity says Derek Weaving, “The prices,” electricity analyst at Renaissance Capital. government wants a viable electricity “The sector, but it does not want to kill the economy.” The deregulation of industrial prices marks the final stage of sweeping power sector reforms that have seen Russia dismantle the UES state electricity monopoly and move the bulk of heat and power generation into the private sector. The government has retained control of the federal grid company, the systems operator and nuclear and hydroelectric plants.
Moreover, Moscow’s leadership within Russia is contested by St Petersburg - the report, which includes both cities among the top 20 European financial centres, puts Russia's second biggest city in 69th place, three positions up since the previous GFCI. Russia’s electricity industry: the good old days are gone March 23, 2011 1:28 pm Vladimir Putin has been regaling TV viewers with his memories of the good old Soviet days when electricity was cheap and Russians paid their utility bills on the nail. But fond stories from the Russian prime minister’s past may just rub salt in the wounds of his people as a sharp increase in energy prices kicks in. The government has sanctioned a 15 per cent increase in household electricity tariffs in 2011 – well above its inflation target. And in a final break with the Soviet past, energy prices for industrial consumers have been deregulated altogether. Industry experts say higher electricity prices are essential to stimulate investment in Russia’s aged power plants and prevent a collapse of the system. But hiking prices is politically risky, particularly in a country where energy supplies have been subsidized for so long. “I remember very well how my father would go out onto the stairway and carefully, in the most attentive way, write down the numbers on the electricity meter,” Putin told a Russian TV interview at the weekend. “You know our older generation is very punctual and scrupulous. It was just kopeks then, but he noted each kilowatt and always paid on time.” Putin is not in a position to be sentimental about rising energy costs. His government is facing a dilemma as investors warn that without higher prices they will be unable to raise the estimated $100bn needed to modernize generation capacity and meet Russia’s rising demand for power. At the same time it is politically risky for the government to allow energy price hikes, particularly in an election year. “The reality is Russians have to pay higher electricity prices,” says Derek Weaving, electricity analyst at Renaissance Capital. “The government wants a viable electricity sector, but it does not want to kill the economy.” The deregulation of industrial prices marks the final stage of sweeping power sector reforms that have seen Russia dismantle the UES state electricity monopoly and move the bulk of heat and power generation into the private sector. The government has retained control of the federal grid company, the systems operator and nuclear and hydroelectric plants.
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