This is provided by the restructuring plan for the Russian Far East energy system which covers OAO "Amurenergo", OAO "Khabarovskenergo", OAO "Dalenergo", OAO "LuTEK", and OAO "Yuzhnoe Yakutskenergo" (established on the basis of the Southern energy area of OAO "Yakutskenergo"), operating in parallel as parts of the East IES. The companies' generating and distribution grid assets were consolidated into OAO "Far East Generation Company" ("FEGC") and OAO "Far East Distribution Company" ("FEDC"), respectively, which started operations on 1 January 2007.

Also, the restructuring plan provides for the creation of OAO "Far East Energy Company" (FEEC), the holding company which will own 100% shares in FEGC and FEDC. OAO "FEEC" is scheduled to be established and start operations on 1 February 2007. The FEEMC management team will move to FEEC. The team is headed by Viktor Myasnik, who has been appointed Management Board Chairman of OAO "FEEC".

OAO "FEEMC" was created in 2001 in order to carry out a turnaround plan in a number of energy companies operating in the Russian Far East, namely, OAO "Dalenergo", ZAO "LuTEK", OAO "Sakhalinenergo", OAO "Kamchatskenergo", and OAO "Geotherm".

To date, the company has achieved all of its objectives: the financial and economic situation in the energy companies under management has become more stable, and arrangements have been put in place to secure fuel supply for the Kamchatka and Sakhalin energy systems. Furthermore, OAO "Kamchatskenergo" is no longer near bankruptcy. The company has worked out a large-scale investment programme designed to ensure reliable electricity and heat supply to industrial consumers, social infrastructure and households in the area.

OAO "Kamchatskenergo", OAO "Sakhalinenergo", and OAO "Geotherm", which were managed by OAO "FEEMC", do not participate in the restructuring of the East IES. As FEEMC will no longer perform the functions of the companies' CEO, RAO "UES of Russia" will announce the position opening for Directors General at these regional energos. The chief executives will be in charge of the implementation of the Energy Systems Development Programmes for the Kamchatka and Sakhalin Regions, which are now being developed and agreed by RAO "UES of Russia".