FTS of Russia

Decree of the government of the Russian Federation No. 332 of June 30, 2004

On approving the Regulations of the Federal tariff service

The Government of the Russian Federation decrees:

1. To approve the proposed Regulations of the Federal Tariff Service.

2. The Federal Tariff Service with participation of federal executive bodies concerned should in a month’s time prepare and submit to the Government of the Russian Federation proposals for the quantity and personnel of Service management boards and the procedure of decision-making by these boards.

3. Provisionally, before making decision by the Government of the Russian Federation, in accordance with par. 2 of the present Decree, to establish one management board for making decisions on determining (setting) prices (tariffs) and control over issues related to determining (setting) prices (tariffs) and their application in the fields of activity of subjects of natural monopolies.

4. To establish that the management board mentioned in par. 3 of the present Decree includes the Head of the Federal Tariff Service, chairman of the Board, 2 deputy heads of the Federal Tariff Service, 2 representatives of the Ministry of Economic Development and Trade of the Russian Federation and one representative from each of the following: Ministry of Transport of the Russian Federation, Ministry of Information Technologies and Communications of the Russian Federation, Ministry of Industry and Energy of the Russian Federation and Federal Antimonopoly Service.

5. To establish that:

the Head of the Federal Tariff Service and his two deputies, and also representatives of the Ministry of Economic Development and Trade of the Russian Federation are standing members of the board mentioned in par. 3 of the present Decree;

invitation of the members of the said board – representatives of the Ministry of Transport of the Russian Federation, Ministry of Information Technologies and Communications of the Russian Federation, Ministry of Industry and Energy of the Russian Federation and Federal Antimonopoly Service is executed by the Head of the Federal Tariff Service on the basis of items submitted to the board;

decisions of the said board shall be taken by a simple majority of votes of its members. In case of the equality of votes Chairman’s vote shall be deciding. Delegating their authorities by members of the board to other persons is not allowed;

the Head of the Federal Tariff Service is entitled to suspend a decision of the said board for a period of up to 2 months awaiting the consideration of the issue in the Government of the Russian Federation.

6. The Head of the Federal Tariff Service shall submit proposals within a week to the Government of the Russian Federation concerning candidacies of members of the board mentioned in par. 3 of the present Decree.

7. To establish that the activity of the boards of the Federal Tariff Service is carried out by the Federal Tariff Service.

8. The Ministry of Economic Development and Trade of the Russian Federation together with federal executive bodies concerned shall prepare and submit before October 1, 2004, to the Government of the Russian Federation proposals for keeping a register of natural monopolies subjects which fall within state regulation and control, a register of market participants with more than 35% of a share of certain commodity and a register of communication operators holding a high position in the public service communication network.

9. With the purpose of ensuring legal succession in the activity of the Federal Power Commission of the Russian Federation reorganized in accordance with Russian Federation President’s Decree No. 314 of March 9, 2004, “On the System and Structure of Federal Executive Bodies” to authorize the Federal Tariff Service, within power assigned to it by appropriate deeds determining its status, to introduce, in accordance with established order, changes into previously made decisions of the Federal Power Commission of the Russian Federation, and also, if needed, invalidate them.

Chairman of the Government
of the Russian Federation

M. FRADKOV

Approved by Decree of the Government
of the Russian Federation
No. 332 of June 30, 2004

REGULATIONS OF THE FEDERAL TARIFF SERVICE

(in the wording of RF Government Decree No. 4 of 09.01.2006)  

I. General

1. The Federal Tariff Service is a federal body of executive power authorized to carry out legal regulation in the field of state regulation of prices (tariffs) for commodities (services) in accordance with the legislation of the Russian Federation and control over their application, except for the regulation of prices and tariffs related to the authorities of other federal executive bodies, and also a federal body of executive power in the field of regulating natural monopolies performing duties on determining (establishing) prices (tariffs) and carrying out control over issues related to determining (establishing) and applying prices (tariffs) in the field of activities of natural monopoly subjects.

2. Management of the Federal Tariff Service is performed by the Government of the Russian Federation.

3. The Federal Tariff Service in its activity is guided by the Constitution of the Russian Federation, federal constitutional laws, acts of the President of the Russian Federation and the Government of the Russian Federation, international treaties of the Russian Federation, and also by the present Regulations.

4. The Federal Tariff Service performs its activity in the interaction with other federal executive bodies, executive bodies of Russian Federation subjects, local authorities, public associations and other organizations.

II. Authorities

5. The Federal Tariff Service shall exercise the following authorities in the established sphere of activity:

5.1. submit to the Russian Federation Government draft federal laws, draft normative legal acts of the Russian Federation President and Russian Federation Government and other documents which require a decision of the Russian Federation Government on issues related to the sphere of Service’s authority established by par. 1 of the present Regulations, and also a draft annual plan of work and projected indicators of Service’s activity;

5.2. on the basis of and in execution of the Russian Federation Constitution, federal constitutional laws, federal laws, acts of the President of the Russian Federation and Russian Federation Government, adopt on its own account the following normative legal acts in the established field of activity:

5.2.1. methodological guidelines (methods):

on calculating controlled tariffs (prices) and (or) their marginal levels for electric (thermal) energy (power) and the size of payment for services rendered in wholesale and retail markets of electric (thermal) energy (power) with the use of established methods of regulation;

on calculating the cost of deviations of the volumes of actual production (consumption) of electric energy from the volumes of their planned hourly production (consumption) with the use of step-up (step-down) indices;

on calculating controlled prices for gas, tariffs for gas transportation, size of payments for supply-marketing services, size of special markups to tariffs for gas transportation;

on the issues of state control of tariffs for transportation by rail;

on calculating tariffs for transportation and storage of detained transport  facilities;

(the paragraph is enacted by RF Government Decree No. 4 of 09.01.2006).

5.2.2. list of works (services) related to the sphere of a natural monopoly in railway transport with respect to determining (establishing) prices (tariffs) and executing control over issues related to determining (establishing) and applying prices (tariffs);

5.2.3. list and forms of documents submitted for considering disagreements in the field of state regulation of tariffs for electric and thermal energy;

5.2.4. regulation for considering the issues of setting tariffs and (or) their marginal levels for electric (thermal) energy (power) and for services rendered in wholesale and retail markets of electric (thermal) energy (power);

5.2.5. normative legal acts on other issues in the established field of activity except for issues whose legal regulation in accordance with the Russian Federation Constitution and federal constitutional laws, federal laws, acts of the President of the Russian Federation and Russian Federation Government, is executed exclusively by federal constitutional laws, federal laws, normative legal acts of the Russian Federation President and RF Government;

5.3. on the basis of and in the procedure established by federal laws, acts of the President of the Russian Federation, shall exercise the following authorities in the field of determining prices (tariffs) and control in the established field of activity:

5.3.1. shall establish (approve, register):

5.3.1.1. tariffs for services in the field of ensuring the work of electric energy (power) wholesale market trade;

5.3.1.2. prices (tariffs) for services in the field of ensuring the system reliability in electric power industry;

5.3.1.3. payment for process connection to electric networks;

5.3.1.4. tariffs for services in the field of transmitting electric energy and their marginal (minimum and (or) maximum) levels, including tariffs for services in the field of transmitting electric energy through the national (all-Russia) power grid, marginal (minimum and (or) maximum) levels of tariffs for services in the field of transmitting electric energy by distribution networks;

5.3.1.5. tariffs for services in the field of operational-dispatch control in electric power industry including determining the resources intended for the insurance against the responsibility risk of dispatch control subjects;

5.3.1.6. size of subscription fee for services in the field of organizing the operation and development of the Unified Energy System of Russia;

5.3.1.7. tariffs or their marginal (minimum and (or) maximum) levels for electric energy sold by producers in the wholesale market of electric energy (power) except for sale of electric energy by them at uncontrollable prices in the volume and procedure that are established by the Russian Federation Government, including two-rate tariffs and (or) their marginal levels comprising the rate for 1 kW/h of electric energy and rate for 1 kW of the established generating capacity;

5.3.1.8. marginal (minimum and (or) maximum) levels of prices for electric energy sold by producers in the wholesale market of electric energy (power) at uncontrollable prices in a procedure and in cases stipulated by the Russian Federation Government;

5.3.1.9. marginal (minimum and (or) maximum) levels of tariffs for electric energy delivered by energy-supplying organizations to consumers, including those for electric energy sold at uncontrollable prices;

5.3.1.10. marginal (minimum and (or) maximum) levels of tariffs for thermal energy produced by power stations carrying out production in the mode of cogeneration of electric and thermal energy;

5.3.1.11. marginal (minimum and (or) maximum) levels of tariffs for electric and thermal energy provided by energy-supplying organizations to consumers, including marginal levels of tariffs for population;

5.3.1.12. marginal maximum levels of tariffs for electric energy (power) sold on the basis of bilateral purchase-sale contracts in a controlled sector within the boundaries of one price zone concluded for a period no less than one year;

5.3.1.13. marginal (minimum and (or) maximum) levels of prices (tariffs) for electric and thermal energy supplied in conditions of limited competition or its absence which can be regulated in a procedure and in cases stipulated by article 27 of Federal Law “On Electric Power Industry”;

5.3.1.14. size of overall price level for electric energy (power) in the free market sector;

5.3.1.15. tariffs for gas pipelining;

5.3.1.16. wholesale prices for gas at the outlet from the gas main pipeline system except for gas produced by organizations that are not affiliated persons of joint-stock companies Gazprom, Yakutgazprom, Norilskgazprom, Kamchatgazprom and Rosneft-Sakhalinmorneftegaz;

5.3.1.17. wholesale prices for oil (associated) gas sold to gas-processing plants for further processing;

5.3.1.18. wholesale prices for liquefied gas for household needs;

5.3.1.19. size of payment for supply-marketing services rendered to final users by gas suppliers (in the course of regulating wholesale prices for gas);

5.3.1.20. tariffs for transporting oil and petroleum products through main pipelines;

5.3.1.21. tariffs, dues and payment related to the fulfillment of work (services) in the sphere of rail traffic (except transit) and carried out in public and non-public places;

5.3.1.22. tariffs, dues and payment in the field of rendering services for use of infrastructure of railway public transport (except transit);

5.3.1.23. exclusive (considering specific traffic conditions) tariffs for railway transport (except transit);

5.3.1.24. tariffs (prices) for the services of transport terminals, ports, airports;

5.3.1.25. prices for the services of icebreaker ships on the lines of the Northern sea route;

5.3.1.26. tariffs for internal written correspondence (post cards, letters, printed matter);

5.3.1.27. tariffs for internal telegram;

5.3.1.28. tariffs for rendering services of long-distance telephone communication (conversation) to registered subscribers;

5.3.1.29. tariffs for giving an access to the telephone network regardless of a type of subscriber line (wire or radio line);

5.3.1.30. tariffs (tariff plans) for making available a local telephone connection (conversation) to registered subscribers, payment for which includes the following:

Concerning the refusal to consider the request of acknowledging the item of par. 5.3.1.30 inconsistent with RF Constitution see Ruling of the RF Constitutional Court No. 384-О of 04.10.2005.

under subscriber system of paying for services of telephone communication – subscriber payment for giving the subscriber line regardless of its type for subscriber’s permanent use and making available a local telephone connection (conversation) regardless of its duration;

under periodical system of paying for services of telephone communication – subscriber payment for giving the subscriber line regardless of its type for subscriber’s permanent use and variable payment for making available a local telephone connection (conversation) depending on its duration in tariffication units;    

5.3.1.31. tariffs for the distribution and relaying of all-Russia TV programs;

5.3.1.32. prices for products of nuclear-fuel cycle;

5.3.1.33. prices for products of defense designations;

5.3.1.34. minimal prices for vodka, liqueur and other alcoholic products with the strength exceeding 28 percent manufactured in the territory of the Russian Federation or imported to the customs area of the RF;

5.3.1.35. minimal prices for ethyl alcohol made of edible raw materials manufactured in the Russian Federation territory;

5.3.1.36. the value of normative levels of deviations, coefficients considering the cause of deviations, and also special coefficients considering the nature of a service when the said deviations took place, used in calculating the cost value of deviations of volumes of electric energy actual production (consumption) of wholesale market participants from the volumes of their planned hourly production (consumption);

5.3.2. shall form and keep a register of natural monopoly subjects which fall within state regulation and control with the purpose of determining (establishing) prices (tariffs) and executing control over issues related to determining (establishing) and applying the prices (tariffs);

5.3.3. shall approve the rates of allocations by operating organizations for generating the reserves intended for assuring the safety of nuclear power plants at all stages of their work cycle and development, and consider the said rates in the course of state control of tariffs (prices) for commodities (works, services) of the operating organizations;

5.3.4. shall consider disagreements arising between the bodies of executive power of the Russian Federation in the field of state control of tariffs for electric and thermal energy, organizations carrying out controllable activities, and consumers, and makes decisions that are subject to compulsory implementation;

5.3.5. shall form an aggregate projected (planned) balance sheet of production and supply of electric energy (power) within the framework of the Unified Energy System of Russia by subjects of the Russian Federation and subjects of the wholesale market;

5.3.6. shall coordinate decisions on approving tariffs for electric and thermal energy adopted by the bodies of executive power of Russian Federation subjects in the field of state control of tariffs;

5.3.7. shall coordinate appointment to office and dismissal of a head of the body of executive power of a Russian Federation subject in the field of state regulation of tariffs;

5.3.8. shall realize in an established order the cancellation of decisions on approving tariffs for electric and thermal energy by bodies of executive power of Russian Federation subjects in the field of state regulation of tariffs adopted with abuse of authority stipulated by the Russian Federation legislation relative to electric power industry;

5.3.9. shall apply measures of responsibility for violation of the Russian Federation legislation on natural monopolies and electric power industry, and also exercise other authority stipulated by the Russian Federation legislation on administrative violations with respect to determining (establishing) prices (tariffs) and executing control over issues related to determining (establishing) and applying the prices (tariffs);

5.3.10. shall execute control over the use of state adjusted prices (tariffs) for electric and thermal energy and carry out inspections of the business activity of organizations engaged in the activity in the field of controllable price formation with respect to the relevance of these prices (tariffs) size and correctness of applying them;

5.3.11. shall execute control over the use of investment resources included in the tariffs for electric and thermal energy adjusted by the state;

5.3.12. shall carry out in an established procedure contests and concludes government contracts on placement of orders for commodities supply, for implementing work and rendering services for the needs of the Service, and also for implementing research activities for the state needs in an established sphere of activity;

5.4. shall generalize the practice of applying the legislation of the Russian Federation in an established field of activity;

5.5. shall perform the duties of a chief administrator and recipient of funds from the federal budget provided for Service maintenance and performance of duties placed on the Service;

5.6. shall organize reception of citizens, ensure full and timely consideration of citizens’ applications, both oral or in writing, making decisions on these applications and sending replies to applicants within a period established by the legislation of the Russian Federation;

5.7. within the limits of its competence shall ensure protection of information constituting a state secret;

5.8. shall ensure mobilizing training of the Service, as well as control and coordination of the work of organizations under its supervision engaged in mobilizing training;

5.9. shall organize professional training of Service employees, their refresher training, professional advancement and work on probation;

5.10. shall interact in an established order with the bodies of state power of foreign states and international organizations in the established sphere of activity;

5.11. in compliance with the Russian Federation legislation shall implement the work on collecting, storing, registering and applying archive documents formed in the course of Service activity;

5.12. shall exercise other authorities in the established field of activity, providing such authorities are stipulated by federal laws, normative legal acts of the President of the Russian Federation or the Government of the Russian Federation.

6. With the purpose of exercising authorities in the established sphere of activity the Federal Tariff Service is entitled to:

6.1. make decisions, compulsory for natural monopoly subjects, on introducing, changing or ceasing the regulation, on applying methods of regulation stipulated by the federal legislation on natural monopolies with respect to determining (establishing) prices (tariffs) and carrying out control over issues related to determining (establishing) and applying the prices (tariffs);

6.2. establish marginal (minimum and (or) maximum) levels of tariffs for electric and thermal energy supplied by energy-supplying organizations to consumers, including marginal (minimum and (or) maximum) levels of tariffs intended for population, with calendar breakdown, breakdown by consumer categories with consideration for regional and other peculiarities;

6.3. send mandatory directives to natural persons and legal entities in accordance with the requirements of the legislation in the sphere of electric power engineering and natural monopolies with respect to determining (establishing) prices (tariffs) and carrying out control over issues related to determining (establishing) prices (tariffs) and applying the prices (tariffs); 

6.4. make decisions on including the subjects of natural monopolies in the register or on excluding from it;

6.5. send mandatory directives to bodies of executive power and local authorities in compliance with the requirements of the legislation in the sphere of electric power industry and natural monopolies with respect to determining (establishing) prices (tariffs) and carrying out control over issues related to  determining (establishing) and applying the prices (tariffs);

6.6. consider issues of violating the federal legislation in the sphere of natural monopolies with respect to determining (establishing) prices (tariffs) and carrying out control over issues related to  determining (establishing) and applying the prices (tariffs) and, within its competence, make decisions on the facts of violating the federal legislation in the sphere of natural monopolies;

6.7. require from the subjects of natural monopolies, bodies of executive power and local authorities documents, explanations, both in oral and written form, and other information required for performing duties stipulated by the federal legislation in the sphere of natural monopolies with respect to determining (establishing) prices (tariffs) and carrying out control over issues related to determining (establishing) and applying the prices (tariffs);

6.8. establish the procedure and terms for submitting current reports by the subjects of natural monopolies on their activity  for determining (establishing) prices (tariffs) and carrying out control over issues related to determining (establishing) and applying the prices (tariffs);

6.9. freely obtain information on the activity of natural monopoly subjects from the bodies of executive power and local authorities, and also from the subjects of natural monopolies on issues of determining (establishing) prices (tariffs) and carrying out control over issues related to determining (establishing) and applying the prices (tariffs);

6.10. publish individual legal acts on issues related to the competence of the Federal Tariff Service;

6.11. request and obtain in an established procedure data necessary for making decisions on issues referred to the competence of the Service;

6.12. order the realization of necessary examinations, tests, analyses and assessments, and also scientific research on issues referred to the authority of the Service;

6.13. give explanations to legal entities and natural persons on issues referred to the competence of the Service;

6.14. invite, in the established order, scientific and other organizations, scientists and experts to work out certain issues in the established field of activity;

6.15. take measures, envisaged by the legislation of the Russian Federation, of restrictive, precautionary and preventive nature aimed at inadmissibility and (or) interruption of violations on the part of legal entities and citizens of mandatory requirements in the established field of activity, and also measures on eliminating the consequences of the said violations;

6.16. create coordination, consultative and expert bodies (councils, committees, groups, collegiums) including interdepartmental ones, in the established sphere of activity;

6.17. establish decorations and medals and award citizens for high achievements in the established sphere of activity.

7. The Federal Tariff Service is not entitled to perform duties in the established sphere of activity that are related to state-owned property management and rendering paid services except for cases established by decrees of the President of the Russian Federation and the Russian Federation Government.

Restrictions set in the first paragraph of this item are not extended to the authority of the Head of the Property Management Service assigned to the Service on the basis of the right of operational management, solution of personnel-related issues and issues of Service activity organization.

When exercising legal control in the established sphere of activity, the Service is not entitled to establish duties and authorities of federal bodies of state power, bodies of state power of Russian Federation subjects, local authorities that are not stipulated by federal constitutional laws, federal laws, acts of the President of the Russian Federation and Russian Federation Government, neither it is entitled to set restrictions on the execution of rights and freedoms of citizens, rights of non-state commercial and non-commercial organizations except for cases, when a possibility of imposing such restrictions by acts of authorized federal bodies of executive power is directly stipulated by the Constitution of the Russian Federation, federal constitutional laws, federal laws and acts of the President of the Russian Federation and Russian Federation Government issued on the basis and in execution of the Russian Federation Constitution.

III. Organization of Activity

8. The Federal Tariff Service is headed by a manager who is appointed to office and dismissed by the Government of the Russian Federation.

The Head of the Federal Tariff Service shall bear personal responsibility for the implementation of authorities placed on the Service and for the realization of state policy in the established sphere of activity.

The Head of the Service has deputies appointed to office and dismissed by the Government of the Russian Federation.

The number of deputies to the Service Head is determined by the Government of the Russian Federation.

9. Structural subdivisions of the Federal Tariff Service include administrations in the sphere of basic directions of the Service activity. Administrations include departments.

10. Head of the Federal Tariff Service shall:

10.1. distribute duties among his deputies;

10.2. submit to the Government of the Russian Federation:

10.2.1. draft regulations of the Service;

10.2.2. proposals relative to manpower ceiling and labor compensation fund of the Service employees;

10.2.3. proposals relating to candidacies of members of the boards;

10.2.4. draft annual plan and projected indices of the Service activity, and also reports on their implementation;

10.3. approve the regulations of structural subdivisions of the Service;

10.4. appoint to office and dismiss employees of the Service;

10.5. in compliance with the legislation of the Russian Federation on public service settle problems related to federal public service in the Federal Tariff Service;

10.6. approve the structure and list of members of staff of the Service within the limits of the labor compensation fund and number of employees established by the Government of the Russian Federation, estimate of expenses for the Service maintenance within allocations approved for a corresponding period stipulated in the federal budget;

10.7. submit proposals to the Ministry of Finance of the Russian Federation on forming the draft federal budget in respect of financial security of the Service activity;

10.8. in accordance with established procedure, submit to the Government of the Russian Federation proposals on creating, reorganizing and closing down federal state enterprises and institutions which are under authority of the Service;

10.9. in accordance with established procedure, recommend employees of the Service and other persons carrying out activity in the established sphere for conferring honorary titles and awarding state decorations of the Russian Federation.

11. Financing of expenses for the maintenance of the Federal Tariff Service is realized at the expense of funds stipulated in the federal budget.

12. For determining main directions of activity of the Federal Tariff Service and for making decisions on determining (establishing) prices (tariffs) and for carrying out control over issues related to determining (establishing) and applying the prices (tariffs), boards are to be set up in the sphere of activity of natural monopoly subjects which shall consist of no more than seven members including Head of the Service. The members of the board are appointed by the Government of the Russian Federation.

13. The Federal Tariff Service is a legal entity, has a seal with the national emblem of the Russian Federation and its name, other seals, stamps and standard-pattern letterheads, and also bank accounts opened in accordance with the legislation of the Russian Federation.

14. The location of the Federal Tariff Service is the city of Moscow.