Free market share may reach 50% in electrical power industry by 2005

The free market zone may be increased to 50 percent of the electrical power market by 2005, Federal Energy Commission (FEC) Chairman Georgy Kutovoy declared in an interview with RBC-TV. According to him, the development of "all mechanisms for mutual obligations, responsibility, risk reduction, etc." will take about a year.

"We guarantee that electrical power will be cheaper there (in the free zone) than that on the regulated market, because nobody would buy electrical power at a higher price, if it can be bought on the market regulated by us," Kutovoy pointed out. He remarked that this would be a price indicator for the FEC. Kutovoy expressed hope that the respective mechanism would be launched before October 1, and the FEC would be monitoring the situation and gaining experience in reducing risks, especially tariff-related risks and risks that may affect the stability of power supplies.

As positive experience is gained, the free market proportion will be growing from the initial 15 percent to 30 percent, 40 percent, 50 percent, etc. up to 90-95 percent, "so that first of all, consumers would benefit, as producers mobilize their internal resources to increase their competitiveness and use their resources and intellectual abilities to make electrical power cheaper," the FEC head underlined.