Moscow, 27 December: The Russian government has asked the Economic Development and Trade Ministry, the Industry and Energy Ministry, the Finance Ministry, the Federal Tariff Service and the Federal Antimonopoly Service to draft a comprehensive plan for the reform of the power sector and to submit it to the government in the first quarter of 2005, the government's press service reported on Monday [27 December].

The decision was made at the government's meeting on December 24.

The plan is to specify exactly how the generating, grid, distribution and other companies in the energy sector are to be created, together with a specific timetable for the reform. The plan should also specify mechanisms for reducing or increasing the state's stake in the companies, the press service said.

The plan should take into account the reorganization of Russia's power grid monopoly UES [Unified Energy System of Russia], which envisages a proportional distribution of shares in the newly created companies among UES shareholders, the press service said. The reform of UES is due to be completed by the end of 2006.

The government also asked the interested ministries and services to submit in two months proposals to improve the federal wholesale power market, which is expected to start functioning from 1 January 2006.

Russia is currently reforming its power sector. The reform envisages breaking up the UES-controlled power industry into separate generation, transmission and sales branches in order to create competition in the sector.