Economy Minister comments on development of electrical energy market

Before the middle of 2004, a competitive electrical energy market should beintroduced in local zones, Russian Economy Minister German Gref stated attoday's meeting of the trilateral conciliation commission for preparing thebill on reforming the electrical energy industry for the first reading atthe State Duma. The members of the commission worked out a compromisevariant, according to which vertically integrated energy companies would bepreserved as legal entities till July 1, 2004. At the same time,competitive market elements will be tested in local zones.However, Gref called the further retaining of vertically integratedcompanies a serious obstacle for creating a full-value competitive marketof electrical energy. In his opinion, when the competitive market islaunched, tariffs for electrical energy will drop. After this, they areexpected to be going up during a year. However, Gref believes that theprice will not rise more than 2.4 times. The Economy Minister pointed tothe experience of other countries, which had already reformed theirelectrical energy industries. There, the level of the stabilized priceturned out lower than the level before competitive relations began on theelectrical energy market..