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. Last Updated: 07/27/2016

UES to Restrict Power in 16 Regions This Winter

Unified Energy Systems has endorsed a list of 16 regions where power supplies will be restricted this winter to head off shortages, CEO Anatoly Chubais said Wednesday at a conference at which he also said investors were showing a keen interest in restructuring the sector.

Chubais, speaking at an investment conference in Moscow, did not name the 16 regions but said the list would be made public later.

"We will limit the consumption of energy to avoid any emergency situation in the power supply network," Chubais said, adding that similar restrictions had been introduced in three regions last winter, one of the coldest on record, which put a huge strain on the country's antiquated power grid.

Freezing temperatures led to huge demand for electric-powered heating, causing frequent power outages as temperatures in Moscow dropped to minus 30 degrees.

Growing energy consumption has also exacerbated the deficit in electricity generation capacity, Chubais said, adding that demand for energy had soared, increasing 150 percent in the last eight months.

Chubais is seeking billions of dollars of investment into the country's power sector to restructure UES and renew its Soviet-era infrastructure.

"Between 16 and 25 percent of Russian power consumption is now [deregulated]," he said.

Chubais has begun unraveling UES's vast empire to create a competitive market and plans to spin off subsidiary companies in a series of public share offers over the next few years.

He said UES foresaw a gradual move toward an unregulated market, starting from 5 percent in 2006 and rising to 25 percent in 2008.

Asked about a roadshow for share offerings in UES subsidiaries, he said: "The feedback was very good. I met a couple of hundred investors."

Asked if investors were concerned about a lack of full liberalization for electricity prices, he said, "This is no longer a concern. This is an issue no more. The market is liberalized."

UES is seeking to attract portfolio and strategic investors, Chubais said.

"The strategy is to have a balanced list of investors -- strategic and financial, Russian and non-Russian," he said.

He said Germany's E.On and Italy's Enel were among those interested, but that there were others as well. He declined to give further details.

Finland's national power grid service said Wednesday that seven firms had applied for transmission capacity in 2007 via its cross-border power link with Russia.

Fingrid director Matti Tahtinen said a final decision over the firms and their transmission capacity would be made in November. Fingrid commercially offers a total of 1,300 megawatts of transmission capacity through its link to Russia, which has exported electricity to the Nordic region in past years.

An unusually dry summer in the hydropower-reliant Nordic region signals more imports during the coming cold season.

Fingrid said the seven firms, which have requested in total 1,350 megawatts of capacity include Norway's Nordic (250 MW), Norsk Hydro (250 MW), Statkraft SF (250 MW), Finland's Nordic Oy (250 MW).