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. Last Updated: 07/27/2016

Senators Approve 5 of 6 Energy Sector Reform Bills

The Federation Council on Wednesday passed five of six bills needed to restructure the country's power sector, voting down a law on energy efficiency because it limits the power of the regions.

"I think the main reason behind my colleagues' objection was that the tariffs that used to be regulated by regions would now pass to the center," Federation Council Speaker Sergei Mironov was quoted by Interfax as saying after the session.

The package of bills, which create the legal framework for restructuring national electricity monopoly Unified Energy Systems and liberalizing the electricity market, was approved by the State Duma last month after years of heated debate.

Mironov said earlier this week that he was sure the upper house would send the electricity package to President Vladimir Putin for final approval by passing all six bills.

But senators voted down the energy-saving bill because it would give the federal government centralized control of the funds where up to 1 percent of electricity tariff revenues are put aside for use in boosting the efficiency of the energy complex. Regions currently oversee how this money is spent and the proposed legislation would take away their control.

The Federation Council's 177 senators represent Russia's 89 administrative districts and have sought to retain regions' regulatory power, despite insistence from Moscow that all regulatory functions be concentrated at the federal level.

Economic Development and Trade Deputy Minister Andrei Sharonov, the government's pointman for energy reforms, tried to reassure senators that the money would stay in the regions while the government would only control its collection and use.

Sharonov said earlier this week that only five regions -- Kemerovo, Sverdlovsk, Omsk, Penza and Murmansk -- properly collect and spend money from the energy saving funds now under their control. Federal control is needed to prevent corruption, he said.

To hammer out a compromise, the Federation Council established a conciliation commission that will work together with representatives from the State Duma and the government. The law should be ready for reconsideration in two weeks, First Deputy Federation Council Speaker Valery Goreglyad said.

The five bills that passed include the bill on electricity, a bill implementing the electricity law, changes to the second part of the Civil Code, and amendments to laws regulating electricity and heating tariffs as well as natural monopolies.