APPLICATION OF FOREIGN PRACTICE OF TARIFF REGULATION IN TARIFF FORMATION FOR WATER SUPPLY ORGANIZATIONS

Abstract

Given that infrastructure sectors are the foundation for economic development and social functioning, increasing attention in Russia is being paid to tariff regulation for resource supply organizations. One of the areas being considered for improving tariff policy in the water supply and sanitation sector is the introduction of benchmark tariff setting. Since the introduction of this tariff setting principle implies significant changes to tariff policy, the primary issues in implementing this initiative should be the adaptation and organizational preparation of the industry for such changes. Therefore, this article examines the experience of applying benchmark regulation as a method of incentives in foreign countries with successful experience in reforming the water supply sector. Based on the analysis, the fundamental elements of an optimal environment are identified, contributing to increased efficiency for water supply organizations. This initial element could be increased transparency of organizations' operations through increased information disclosure.