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Delovoi Peterburg, August 7, 2002

Branches of Power Beat Against the Energy Sector

by Vladimir Lavitsky

The legislative and executive authorities have almost resolved the emerging contradictions in energy sector reform.

According to the Deputy Speaker of the Federation Council, Valery Goreglyad, the tripartite commission of the working group responsible for finalising the package of draft laws on reforms in the electricity sector will prepare draft laws for the first reading approximately by the end of August.

Vice-President of the Russian Stock Exchange Union Anatoli Rabinovich, who is also an expert in the YABLOKO faction and participated in the work of the tripartite commission, told our correspondent from "Delovoi Peterburg" that the meeting [of the tripartite commission] had managed to settle only some of the debatable points, but far from all of them. Another meeting of the tripartite commission is scheduled for August 26. Clearly this represents the last opportunity for all interested parties to "push through" their proposals.

However, according to Anatoli Rabinovich, the commission managed to persuade the government, represented at the meeting by Deputy Minister for Economic Development and Trade Andrei Sharonov, to include in the draft laws the principles for forming the generating markets, define clearly the guaranteed supplier and its duties, as well as the underlying principles for the functioning of the wholesale electricity market.

At the same time the deputies will insist that the Federal Grid Company and system operator be fully owned by the state and introduce anti-monopoly norms in the law (i.e., ban any combination of monopolistic and competitive activities when entering the wholesale and retail markets, limit energy monopolists, prevent an excess increase in tariffs, restrict vertically integrated companies and define the zonal borders of electricity markets).

In addition the representatives of YABLOKO propose establishing the following structure for regional Grid companies: 33% for municipal bodies, 33% for regional and 34% for federal Grid companies.

The Government has still not decided whether the state should own 100% of the shares or simply a controlling block.

See also:
Energy Sector Reform

Delovoi Peterburg, August 7, 2002

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