RAO UES wants to take over Irkutskenergo

RAO UES of Russia again wants to absorb Irkutskenergo
The government will help him
Last week there was a new turn in the long-standing conflict between RAO UES of Russia and JSC Irkutskenergo. Russia's only independent energy producer, defending its independence from RAO UES, may soon say goodbye to it. First, Prime Minister Viktor Chernomyrdin said that the issue of the Irkutsk region joining the unified energy system of Russia “will be resolved in the way that is necessary for the entire Russian energy system and for no one else.” His vice minister, Minister of Fuel and Energy Boris Nemtsov, expressed himself more clearly, threatening: if the issue is not resolved positively by the end of summer, the government will prevent the export of Irkutsk electricity to China. Meanwhile, according to Kommersant's information, Irkutsk power engineers intend to continue to defend their position.

After a long break, the issue of interconnecting energy systems was again raised at a government meeting on July 3. Then, according to Prime-TASS, Chairman of the Board of Directors of RAO UES of Russia Boris Brevnov announced the resumption of negotiations on the transfer of Irkutskenergo to a unified energy system.
The essence of the conflict, in which property disputes play only a secondary role, lies in the conflicting interests of the Irkutsk region and the federal authorities. Irkutsk industry and local authorities are, of course, extremely interested in the independence of their energy producer, since local energy is cheaper than anywhere else in the country. If Irkutskenergo is transformed into a subsidiary of RAO UES of Russia, local metallurgical enterprises will have to buy energy on the wholesale market, which will immediately affect the cost of their products.
It is also important that Irkutskenergo has the opportunity to pursue an independent policy, including in the field of export supplies (it successfully sells energy to Mongolia and China). This is a significant source of income for the administration of the Irkutsk region, which it does not want to part with.
But the federal center is concerned with a larger problem - restoring the integrity of the country's energy system. Its decision was initiated by Presidential Decree #923 of August 15, 1992, which gave RAO UES the status of a national energy company with the functions of a state-authorized operator of the wholesale electricity market. For this purpose, controlling stakes in large power plants were transferred to the authorized capital of RAO UES.
However, this did not affect Irkutskenergo JSC: the company was corporatized even before the presidential decree was issued and as a result became the owner of three large hydroelectric power stations - Irkutsk, Bratsk and Ust-Ilimsk. RAO UES's claims to these stations, as well as to the state stake in Irkutskenergo (49%), were broken by the federal agreement, which was signed by the governor of the Irkutsk region, Yuri Nozhikov, with the center. According to the agreement, any changes in the status of energy facilities must be agreed upon with the administration. Another episode of the conflict was the scandal surrounding the supply of electricity from Irkutskenergo to Mongolia. RAO UES banned its competitors from transiting energy through the territory of Buryatia, and only the intercession of the antimonopoly committee forced RAO UES to reconcile. But not for long.
The new team that came to the leadership of the energy complex in the person of Boris Nemtsov and the new head of RAO UES of Russia Boris Brevnov, apparently, decided to put an end to the problem of dividing the energy system. According to calculations made two years ago, the transfer of Irkutsk electricity to the wholesale market would have allowed to reduce average tariffs by 10%. This is especially important for easing the situation in remote regions, including Primorye, which is experiencing an energy crisis.
Yesterday, in Brevnov’s absence, Vera Redko, deputy head of the department for work with territorial societies of RAO, commented on the situation for Kommersant. According to her, now we are not talking about the controversial stations, but only about power transmission lines and the state block of shares, which should be transferred to RAO UES from the regional property fund. However, this problem must be resolved as a result of a compromise between the federal authorities and the administration of the Irkutsk region.
Irkutsk residents, naturally, do not want to solve the problems of their neighbors to the detriment of themselves. Assistant to the general director of Irkutskenergo Lev Musnikov told Kommersant that the company's management remains confident that they are right.
VLADIMIR Kommersant-GENDLIN

Newspaper "Kommersant" No. 106 dated 07/09/1997, p. 7