ESTIMATION OF POTENTIAL CROSSSUBSIDIES DECREASE IN THE ELECTRICITY DISTRIBUTION INDUSTRY OF RUSSIA

Abstract

The article provides evaluation of probable reduction of cross subsidies in the electricity distribution industry taking into account limits of tariff burden for population. Estimations are based on ad hoc mathematic model and on 2021 year data, including detailed data of household budget survey (conducted by Rosstat). The article includes estimation of probable electricity tariff changes for population in case of cross subsidies cancellation and targeted subsidies establishment. Amount of required targeted subsidies is evaluated. Results of calculations show that full abolishment of cross subsidies will increase household electricity price by 48% or by 29% if targeted subsidies will take place. Therefore, cancellation of cross subsidization should be accompanied with improvement of power utilities’ efficiency and household energy efficiency.