Analysis of Affordability of Cost Recovery

Research Report

Analysis of Affordability of Cost Recovery

Communal and Network Energy Services
September 30, 1998

Abstract

This analysis compares the housing-utility burden of Russian households under the current (1996) subsidized rate scheme with the burden they would experience under a full cost recovery scheme. Special attention is given to the relative impact of the new scheme on households in different expenditure categories and on households living in urban and rural areas. This report finds that if a full cost recovery scheme were implemented, an estimated 54% of households would have serious difficulties meeting the costs. However, the study finds that even after setting aside funds for housing allowances to assist these households, the municipalities' revenues from the full-cost scheme will outweigh their expenditures.

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