Natural Monopolies in the Energy Sector of the Economy: Legal Issues of Reformation

Abstract

The market relations based on competition laws established during the last quarter of the century and the accumulated experience inevitably require the elaboration of new development plans and the adjustment of the existing legal regulation. The introduction of some exceptions in the laws stipulates specific further “recalibration” of the basic as well as special regulation. The Energy Strategy of Russia until 2035 defining the aims, priorities and areas of the development of the power industry of the Russian Federation emphasizes the need for a structural diversification within which the significance of liquefied natural gas will be raised, the carbon-based power industry will be supplemented with the non-carbon-based one, the decentralized power supply will be added to the centralized one. The discussed plans of the competition development in Russia are still not widespread beyond the Strategy. The review of the list of natural monopolies in the power industry makes it obvious that their current essential reformation aiming at demonopolization is highly improbable due to their technical and economic characteristics. Thus, it appears that in the near future, taking into account the established technical and economic conditions in which natural monopolies exist, the adjustment of their operations in terms of securing market conditions can be connected with the adjustment of the regulation of the tariff setting mechanism and the legal “localization” of the non-discrimination principle in relation to the operations of specific natural monopolies.