Increase in Electricity Rates Starting from July 1
Russia Announces Increase in Electricity Tariffs for 2021-2028
According to a recent announcement by the "Parliamentary Newspaper", network companies in Russia will be increasing electricity tariffs for all consumers. The increase will begin on July 1, 2021, and is expected to continue through 2028.
The predicted increases are primarily due to rising costs associated with energy production, infrastructure modernization, and regulatory changes aimed at incorporating more expensive or cleaner energy sources.
One of the key reasons for these increases is the growing expenses related to maintaining and upgrading aging infrastructure and developing new capacity. This includes more complex and costly generation technologies such as geothermal and renewable energy developments.
Another factor is the global and regional push to reduce carbon emissions and environmental impact. This involves integrating renewable sources and improving energy efficiency, which typically entail higher upfront costs that are passed to consumers through tariffs.
Government policies that encourage long-term revenue certainty for energy producers, risk mitigation, and gradual tariff adjustments to reflect true costs also contribute to the tariff increases.
The prices of fossil fuels, including natural gas, significantly affect electricity generation costs. While Russia is a large energy producer, fluctuations in fuel costs and supply can lead to tariff adjustments to reflect market realities.
The specific increases for each year are as follows:
- Starting from July 1, 2021, electricity tariffs for all consumers will increase by 11.6%.
- In 2022, the cost of services of network companies for all categories of clients will increase by 9.8%.
- In 2023, the electricity tariff increase is expected to be 12.6%.
- In 2026, a future increase of 9.3% in electricity tariffs is forecasted for July.
- In 2027, another future increase of 6.9% in electricity tariffs is forecasted for July.
- In 2028, the cost of services of network companies for all categories of clients will increase by 4.2%.
No information was provided about tariff increases or network company service cost increases beyond 2028. It is also important to note that the text does not provide any information about the connection between electricity tariffs and tap water quality in Biysk, or any complaints from Biysk residents about tap water quality.
The electricity tariff increase for 2021 is primarily due to rising costs in the energy industry, including infrastructure modernization and the use of more expensive or cleaner energy sources such as renewables. The subsequent tariff increases throughout 2022 to 2028 are attributed to factors like the integration of renewable sources, improving energy efficiency, and government policies that encourage long-term revenue certainty for energy producers. These policies often involve tariff adjustments to reflect true costs, which includes expenses associated with the finance sector. Additionally, fluctuations in the prices of fossil fuels, like natural gas, can significantly affect electricity generation costs in Russia as a large energy producer.
