Methods of investment management in the Russian electricity transmission industry

Abstract

The paper surveys the methods of investment management in the Russian electricity transmission industry: state regulation and corporate planning of investment activity. The analysis of these two methods highlights their features, advantages and disadvantages. The investigation of the forecasting and investment decision process is given with regard to the electricity industry restructuring. The algorithm of interests’ alignment between the state and the electricity network company is provided through the mechanism of investment management. The analysis of the methods of investment management in electricity transmission in Russia shows that corporate planning of investment activity coexists on a parallel basis with state regulation of investment activity. Corporate planning conforms to the interests of the electricity network company. Elaboration of efficient investment programs is associated with the lack of reliable development forecasts, regional specific features, tight deadlines for preparing the investment programs, centralized investment decision-making. A French approach for organizing the state forecasting system in Russia is also presented in the research and could be of use in Russia. Corporate planning of investment activity in France defers the goals of state regulation due to the fact that investment decisions are eventually made by the Regulator, which manages the electricity transmission company. Investment decision process is characterized by a larger degree of social responsibility taken by the electricity network company when making an investment decision. For that a special attention is drawn to public relations, whose interests are taken into account at the initial stage of investment process.