July 31, 2017 saw the enactment of Federal Law No. 279-FZ On implementing changes to Federal Law On the heating supply and other legislative acts of the Russian Federation relating to the improvement of the heating supply system. The availability of a new model for the thermal energy market is ushering in a transition from state regulation of all heating supply tariffs using the cost plus method to contractual agreement of predictable long-term heating prices for consumers. In order to protect the interests of the end consumer, the price is limited by the cost of heat estimated using the best technology available, from an alternative thermal energy source local boiler plants. The public commitment to achieving a new standard of heating supply for communities is enshrined in the Agreement on the Performance of the Heating Supply System, concluded between municipal authorities and Russias Unified Heat Supply Organization (ETO). This agreement is proving to be a transparent tool for attracting private investment into the heating supply system. A key role will be played by the ETO, which is becoming a single point of accountability within the heating supply system for consumers and government. In order to be able to perform this function, the ETO is being given the powers it needs to optimize and develop the heating supply system in accordance with the agreed plans. New quality requirements are being introduced with respect to service provision and the organization of consumer relations. At the same time, the authorities have a broader selection of tools for oversight of ETO operations, including antitrust measures. The new model on the thermal energy market is encouraging improvements in efficiency, the establishment of new standards, and the attraction of private investment into the heating supply sector. The current challenge is putting this model into action: where and when this model will be implemented in Russias regions. Major domestic energy holdings have amassed sufficient know-how and resources to use this model to invest in upgrading the heating supply of Russian towns. The decision is for regional and municipal leaders. The discussion will consider the following questions: • The new model on the heating market as a development tool: advantages for consumers, regional authorities, and the sector as a whole. • Subjective factors in implementing the new model: how can effective cooperation be ensured between regional authorities and energy companies? • Practical aspects: changing the relationship between the ETO and other heating supply organizations (heating networks, thermal energy sources) as the new model for the heating market is implemented. • The Agreement on the Performance of the Heating Supply System a tool for increasing efficiency, establishing new standards, and transparently attracting private investment into the heating supply system. • Key timeframes in the transition to the new model and the challenge of minimizing risks to the consumer: government powers and the responsibilities of heating suppliers.