Former Soviet Union, EU and Russia to undertake power reform study

Oct 06, 2004 02:00 AM

"Synchronization [of electricity systems of Russia and the European Union] is a unique political and business project. No other synchronized system like this exists on the planet," says Unified Energy Systems of Russia (UES) CEO Anatoly Chubais.
According to the Russia's power monopoly head, an agreement has been reached among former Soviet Union states, the EU and Russia on drafting a feasibility study of the project that will be completed by 2006-2007. The European Union and Russia will co-finance the study on fifty-fifty basis.

Speaking of the ongoing electricity sector reform in Russia, Anatoly Chubais said that within two years 36 energy systems have taken corporate decisions on unbundling, and five systems have already been unbundled.
"This immense work has been done without a single conflict... One of the principal arguments of those who used to oppose the reform was that restructuring would destroy the energy sector, disintegrate regions and result in numerous breakdowns and lackof power supply dependability. As we see now, nothing of the sort has happened," the energy giant's CEO says.

"At the same time, we discovered new aspects that we had not seen before," admits Anatoly Chubais proposing changes to currently implemented electricity sector reform.
"Initially it was envisaged that after establishing free [electricity market] sector we shall extend it to embrace the whole market and sell there not 5 to 15 % of electricity [as we do now], but 100 % of it at market prices. Now we understand that such decision will be too blasting. There are categories of consumers who need protection and development of mid-term strategy of their adaptation to the market", admits Anatoly Chubais, proposing introduction of three-year agreements between electricity sellers and consumers instead of earlier proposed wholesale market liberalization.

According to Chubais, prices established by the Federal Tariff Service will be fixed in such agreements, although consumers will retain the right to enter unregulated sector of the market that will naturally grow.

Source: Izvestia
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