Moscow 11 July 2007. RAO "UES of Russia" has developed a business continuity programme to ensure reliable electricity and heat supply in the city of Berezniki, Perm Kray, in the event of technological accidents at the local potash mine. The document was reviewed at the meeting hosted by RAO "UES of Russia" with the participation of Chairman of the Company's Management Board Anatoly Chubais and officials of the Perm Kray Government and Berezniki City Administration.

Currently, the soils are subsiding in Berezniki as a result of flooding of the potash and magnesium mine. According to the forecasts of researchers from the Galurgia Urals Scientific, Research and Design Center, there is a threat that, by December 2007, the ground subsidence, deformation and downwarping may reach a maximum.

The energy facilities that may be affected by the possible technological disaster include the Bereznikovskaya CHPP-10, which produces half the heating supply in Berezniki, the plant's infrastructure and the dam regulating the level of the Seminskoye reservoir. These facilities are owned by TGC-9.

In the event of ground subsidence, the operation of CHPP-10 may be suspended during the coming winter, and the possible destruction of the dam may lead to human losses, destruction of infrastructure and residential buildings.

Since the autumn of 2006, when the ground subsided near the CHPP-10, TGC-9 has taken a number of actions to improve the reliability of heating supply in the city of Benezniki. Specifically, within a very short timeframe of one week, the pipeline supplying gas to the Bereznikovskaya CHPP-4 was moved from the dangerous area. Moreover, maximum fuel stockpiles have been created to ensure stable operation of the CHPP during the 2006/2007 autumn-winter period.

Under the Programme, by 1 December, TGC-9 is to prepare the CHPP-4 equipment to meet the peak demand in 2007-2008 winter as a backup source of heating and build a heating main connecting the CHPP-4 with Berezniki's centralized heating system outside the potentially dangerous area. TGC-9 also plans to implement a number of measures to ensure delivery of additional heating capacity from CHPP-2.

Permenergo Distribution Company is implementing a number of projects to develop the grid links with Berezniki. Specifically, it will modernize the Berezovskaya substation supplying electricity to a significant part of the city and build additional overhead cable transmission lines.

In order to prevent the dam destruction at the Seminskoye reservoir, RAO "UES of Russia" has proposed to drain the water from the reservoir before the first frosts. RAO "UES of Russia" plans to submit its proposal to the Russian Federal Service for Environmental and Atomic Supervision and the Federal Service for Supervision of Natural Resource Usage.

After the meeting, RAO UES Management Board Chairman Anatoly Chubais said, "We view this situation as a very serious one. The key decision is to be made about the following: even in the event of an accident and failure of the CHPP-10, we have to ensure 100 percent supply of heat and hot water to the residential consumers from the reserves, as well electricity from the city's other power plants owned by TGC-9. In other words, if a worst-case scenario develops at CHPP-10, we should be prepared to use other sources to supply both heat and electricity."