State price regulation of Russian power industry

The process of end-user-oriented tariff design as well as state participation in this process from the point of view of the social efficiency of energy market is considered in the article. The reasons which prevent from designing a tariff according to market-oriented principle of pricing are identified. They include the marginal principle of pricing on the wholesale power market as well as the existence of cross-subsidization between the population and other consumers (industrial enterprises, legal entities). They result in the occurrence of a contradiction, when wholesale pricing rules and underpricing policy for the population, set by public authorities, do not allow to create a competitive power market with market-oriented pricing. Due to it, the goal of creating competitive pricing on the electric power market hasn’t been achieved. Moreover, contradictions in price regulation, referred to above, question the efficiency of state reforms as well as the validity of the selected model of power industry organization.