Goals and Tasks of Restructuring

The main goals  and tasks, approaches and principles, stages and mechanisms of reforming of the Russian grid complex are set out in the Government Order of the Russian  Federation № 526 as at 11 July  2001 “On electric power industry reforming in the Russian Federation”, counting  the subsequent changes in its regulatory and legal framework, and the tasks of reforming are set out in the 5+5  Strategy Concept of JSC of RAO UES of Russia for 2005-2008.

Reforming process involves JSC RAO UES of Russia joint-stock company of power industry and electrification, its affiliated and dependent companies, municipal power enterprises and other organisations that own electric networks and offer services on electric power transfer and distribution, particularly reforming of the federal, state unitary enterprises of atomic engineering.

Transformation of the existing federal (Russian national) electric energy (capacity) wholesale market to the high-grade competitive electric power wholesale market  and formation of the effective electric power retail markets providing reliable power supply of consumers will become one of the main results of the electric power industry reforming.

Main goals of the grid branch reforming are:

• Increase of the grid entities efficiency;
• Creation of conditions for branch development on the private investment basis.

Thus the reform primary goals are the following:

• Division of the branch into  natural monopole (in general, electric power transfer and distribution, dispatching) and competitive (electric power distribution, sale) kinds of activity;
• Creation of system of effective market relations in competitive kinds of activity; 
• Maintenance of non-discriminatory access to natural monopolies' services;
• Effective and fair state regulation of natural monopolies that creates stimulus to cost decrease and provides investment appeal of natural monopolies.

Russian JSC RAO UES of Russia will aim to achieve the specified reform goals, taking into account:

• Performance of reliable and unfailing power supply of law-abiding consumers of electric and thermal energy in short  and long-term prospect;
• Performance of balance between execution of the interests of the company's proprietors, state and other interested persons, including consumers of production and  services made in the branch and the company's employees.

Grid complex reforming

According to the legislation on electric power industry and 5+5 Branch Reforming Strategy, Russian grid complex along with objects of dispatching is a natural monopole kind of activity and is the basis of the future electric power market infrastructure.

The reforming increases and organises state control over electric power industry infrastructure - electric power transfer through transmission networks, functions and assets of the operational and dispatching management. At the same time (within the limits of market development) modernisation of energy accounting and control systems is being performed. All this contributes to increase in the power supply system controllability and reliability of power supply.

Market creation will raise investment appeal of the network infrastructure. Development of the network complex will create additional possibilities for electric power transfer and increase their volume. This will expand the sales area the electric power trade including export and import transactions and will make it more complicated.

Division of the former monopoly into separate companies by kinds of their activity will allow to consolidate management of isolated assets. This may be achieved through creation of operating companies instead of the holding ones. Similar re-structuring will raise controllability of new entities of the branch, simplify realisation of the uniform strategy, allow to consolidate and involve considerable amount of external financial resources.

The main goals and tasks of the grid complex:

• To provide reliable functioning of the grid complex that is a technological basis for electric power industry functioning;
• To provide non-discriminatory access to the electric networks;
• To provide the state control over functioning of the Unified National Power Grid;
• To increase capitalisation of the uniform company in comparison with the sum of DGC’s capitalisations;
• To perform effective regulation of electric power transfer on the basis of rates that provide necessary return on the active money;
• To provide increase in economic efficiency of the network companies' activity at the expense of cost decrease, outsourcing of service kinds of activity, purchasing on the competitive basis;
• To attract into the grid complex modernisation and technical re-equipment means on the basis of high technologies and according to the modern quality standards.

To speed up development of electric network and attract investments for this purpose private building of transmission lines is made possible according to the order and terms set out in the Russian legislation.