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. Last Updated: 07/27/2016

Electricity Watchdog Given More Bite

Itar-TassKhristenko talking to officials shortly before a government meeting in the White House in Moscow on Thursday.
The Federal Energy Agency, in its new role as watchdog for the electricity sector, will enforce investment commitments and break up ventures that stifle competition, Industry and Energy Minister Viktor Khristenko said Thursday.

"The new [watchdog] will be given new powers to enforce anti-monopoly laws, up to forcing the breakup of ventures that threaten competition," Khristenko told a news conference.

The influence of the Federal Energy Agency is being expanded as the country's state-controlled utility, Unified Energy System, prepares to be broken up and partially privatized by July 1.

Khristenko's remarks appeared to be a thinly veiled warning to state-controlled Gazprom, which has been the largest player in the scramble for UES assets. If it carries out a planned joint venture with the Siberian Coal and Energy Company, analysts say it stands to control some 40 percent of Russia's gas-and coal-based electricity production.

It already has effective control of four major power producers, including the main utilities in Moscow and St. Petersburg, Mosenergo and Lenenergo.

"The barrier defining a dominant position on the [electricity] market has been lowered from 35 percent to 20 percent," Khristenko said. "From our point of view, this is principally important."

On Monday, Dmitry Akhanov, the head of UES's strategy department, was assigned the top post at the Federal Energy Agency, which previously had limited regulatory power over oil and gas firms and was responsible for the monthly oil export schedule.

Khristenko also said the government would set up a market to sell power capacity from Jan. 1 after approving the necessary regulations.

The market will be "the most vital way for regulating the bringing on line of new capacity," Khristenko said.

(Reuters, Bloomberg)