Translated material
"There shouldn't be any glitches"
The President and the Government have begun to complete the electricity reform
The state has begun to prepare for life without RAO UES of Russia - as is known, on July 1 this company will be reorganized. Last Friday, Deputy Prime Minister Igor Sechin held a meeting dedicated to solving the most pressing problems of the industry. And before this, the new Minister of Energy Sergei Shmatko reported to Dmitry Medvedev on how the formation of the new ministry was progressing, and received the task of preventing any disruptions in energy supply in the coming winter.“We have the beginning of the activities of the new ministry (Ministry of Energy. - Ed. ) coincides with the cessation of the activities of one very important joint stock company, I mean RAO UES of Russia,” Dmitry Medvedev began the meeting with Mr. Shmatko. -- I would like you to report to me now on what measures are being taken to ensure that consumers do not feel changes in the market in the field of regulation, what else we need to do and how all regulatory functions in relation to the electric power industry will be carried out in the near future, taking into account previously adopted decisions on reforming the electricity sector in the country.” The minister replied that he had already held a working meeting with the management of RAO - with Anatoly Chubais “and with specialist managers.” “You are absolutely right: a completely different situation is emerging in the country’s energy market,” the minister said. -- Based on the analysis we did, I believe that RAO UES of Russia is well prepared in this regard, that the existing functions of market regulation will be quite effectively offered by the “System Operator”, “Trading System Administrator”, etc. What worries us? In the near future, we will be actively preparing for the autumn-winter peak, including how the Russian Ministry of Energy will be involved in the process of monitoring, preventing and eliminating possible emergency situations in the electric power industry. This is our main task today.”
After these words, the president of the country gave Mr. Shmatko the following instructions: “You must keep your finger on the pulse. I repeat once again so that none of the consumers feel that we have undergone a reform of the management system here. It really, in essence, ended, we strived for this. But there should be no hiccups in the process of transferring these regulatory powers, keep this under your control continuously.”
Obviously, such an indication is associated with an accident in the Moscow region in May 2005. Then, in Moscow and surrounding areas, the restructuring of energy companies by type of business began. For example, Mosenergo was divided into 14 parts. After this division, for some time a situation arose where regional dispatchers received the right not to coordinate their actions with their colleagues from the generating and distribution business. After the accident, many power engineers pointed this out, but RAO, when analyzing the causes of the accident, preferred not to focus on structural failures.
Now, in conditions when the new Ministry of Energy is just starting its work, and RAO will no longer exist, it may turn out that there will be no one to regulate relations in the industry. This danger, based on the words of the head of RAO Anatoly Chubais, was discussed at a meeting with Mr. Sechin. “At this conversation, a dozen of the most pressing and hottest issues were raised related to the deployment of the state system for managing the electric power industry at the stage when RAO UES ceases to exist,” Mr. Chubais told reporters. — I must say that my colleagues and I have the most positive impressions from yesterday’s conversation. All decisions that were received, without exception, are sound and reasonable. And in our understanding, this is exactly what needs to be done now. The task on the part of RAO UES is to provide maximum support to the process of building state management of the electric power industry, and, as we have seen, from the side of the state, from the side of the Deputy Prime Minister, from the side of the minister, the approach is exactly the same. Today we have obvious mutual understanding and decisions, I repeat once again, the most positive.”
What Mr. Chubais's optimism is based on remains a mystery. The only thing he agreed to talk about was the order of the Deputy Prime Minister to the Federal Tariff Service to create a short-term market for electric power (in addition to the existing electricity market) within five days. “I really hope that the Deputy Prime Minister will monitor the implementation of his instructions,” said the head of RAO. - This means that in five days there will be a government decree, then it will go on a red form, and, as we expected, the capacity market will start operating in Russia from July 1. With regard to the target capacity market, as we like to say, the long-term capacity market, key decisions were also made, which provide for the coordination of all its basic parameters in June. We are ready for this. And I hope that before the completion of RAO UES, it will be possible to develop some kind of constructive position for the government, and we will be able to find all the solutions.”
Thus, it can be assumed that Mr. Chubais is pleased that at least some work has begun in the government in relation to the electric power industry. However, the investors whom the head of RAO brought to Russia seem to be afraid of something completely different. As Vremya Novostey’s source on the energy market said, the investment climate in the industry has now sharply worsened due to the appointment of Mr. Sechin as its curator (who is considered the ideologist of the attack on YUKOS and Mikhail Khodorkovsky). And it was precisely this circumstance that became one of the main reasons for the impossibility of selling the remaining shares of large generating companies, in particular OGK-1, at a high price.