17-Year Energy Policy
moscowtimes.ru
(expect Russian Electric Utility stocks will rise some more)
Monday Sept 8,2003
By Given the Green Light
The Moscow Times
Prime Minister Mikhail Kasyanov signed an order Friday approving the country's energy strategy through 2020, which the government hopes will make the economy more competitive by doubling energy efficiency.
The document tasks four ministries with sharing responsibility for carrying out the plan. The Energy, Economic Development and Trade, Nuclear Power and Natural Resources ministries are to report to the government quarterly on their progress, Interfax reported.
The plan, approved by the Cabinet in May, aims to make energy use twice as efficient over the next 17 years, in part by raising prices, as production volumes continue to rise.
As debate about new pipeline routes to Asia continues, energy firms have looked to the Cabinet for an indication of which one will get the government's blessing. The plan in May expressed no explicit preference, and Friday's document appears to have made no modifications.
The plan allows natural gas prices for industrial users to rise to between $36 and $39 per 1,000 cubic meters by 2006, a marked increase from this year's estimated price of $23.30. Electricity prices for industry, too, would increase to between 3.2 cents and 3.6 cents per kilowatt hour, up from 2.4 cents.
The government plans to regulate energy prices by setting tariff ceilings on a regular basis.
"This method will encourage producers to lower costs as well as ensure tariff predictability in the medium term," Interfax cited the strategy as saying.
The strategy acknowledges that power prices should increase enough to cover fuel costs and allow for acceptable margins, given the forecast growth of gas prices each year, but not so much as to spur high inflation and slow economic growth.
Prices for other types of fuel, including coal, oil and oil derivatives, are to be set by the market.
Kasyanov ordered the Economic Development and Trade Ministry and the Energy Ministry to integrate the strategy's measures into plans for the socioeconomic development of the country.
He also ordered federal and regional executive bodies to follow the energy strategy plan in regulating the sector and in developing regional energy programs. |
