ENERGO: Russian watchdog accuses T Plus utility major of price fixing

Russia’s Federal Antimonopoly Service (FAS) launched a probe into T Plus utility major, claiming power price manipulation. 

"The news may imply a fine for the genco [generation company], which may lead to lower prices – prices are critical for gencos’ margins, thus a potential negative for the entire sector," BCS Global Markets commented.

The FAS argues the manipulation dates back to 1H19 when T Plus boosted its pricing bids far exceeding its fuel costs (by 70-90% and sometimes more than double). According to FAS, the company had a dominant position in certain areas, hence higher bids led to higher prices and hindered competition.

More broadly, BCS GM warns that stricter antimonopoly control may lead to lower prices. And as Russian gencos sell most of their power through the spot market, the pricing is critical for their margins. 

"In 2H21, spot prices have risen by c20% year on year so far, while fuel costs (gas tariffs) were up by only 3%. Strong power prices are good for all gencos' earnings. More disciplined price bids may lead to lower prices," the analysts argue.