Moscow. 11 January 2006. The generation companies established in the course of restructuring of RAO UESR regional energos started trading on the wholesale electricity (capacity) market (OREM) effective 1 January 2006. Those generation companies have been granted the status of direct participants of the wholesale market.

Since the beginning of the year, 44 generation companies have become OREM participants, including 6 wholesale generation companies (WGCs), 6 territorial generation companies (TGCs), and 32 regional generation companies (RGCs).

Entry of the generation companies into the wholesale electricity market will help streamline the planning and scheduling processes and improve the market performance of certain power plants. Moreover, this step boosted the trading volume in the free market segment of the wholesale electricity (capacity) market. In the first few days of January the trading volume grew 1.5-2% compared to the same period of 2005.

The market entry of the regional generation companies of RAO "UES of Russia" is part of the measures designed to develop and improve the functioning of the wholesale and retail electricity market as provided by the Electricity Reform Plan for 2005-2006 approved by the Russian Government on 15 April 2005.

This was preceded by the work of the Federal Tariffs Service of Russia to draft the necessary amendments to regulatory documents, as well as organizational and other arrangements required to take the relevant decisions on tariffs and balances. For new OREM participants, new tariffs were established for electricity supplied by each individual power plant and regional tariffs for capacity provided by thermal generators and hydropower generators, as well as the power plants included in the WGCs.

In order to prevent a sharp increase in retail electricity prices for the regions, individual tariffs for purchasing electricity on the wholesale market were set for 2006. Those tariffs are based on the weighted average price of electricity supply by the power plants formerly owned by the regional energos and electricity purchase on the wholesale market before the entry of regional generation companies into the wholesale market.

Where regional energos are still undergoing restructuring, individual tariffs and balances will be set for the consumption and generation of electricity (capacity) by those regional energos' power plants.