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. Last Updated: 07/27/2016

Energy Use Down 4.8% in February

Electricity consumption fell 4.8 percent in February, much less than in the previous month, official data showed Thursday, signaling that January's industrial collapse may have begun to ease.

Electricity use is a forward indicator of economic activity, and January's 7.7 percent drop in power consumption augured the worst fall in industrial output ever recorded.

But analysts have said factories, steel mills and other engines of industry appeared to have regained momentum in February, as electricity use in some regions did not see a significant fall year on year.

Last month, power consumption in the Far East and the regions around St. Petersburg were in line with February 2008, when the global financial crisis had not yet impacted Russia, data from the central dispatcher of the power system showed.

But overall, electricity use in the year to date has fallen 6.3 percent, one of the steepest drops since the collapse of the Soviet Union, as major industries continue to idle machinery and slash output because of a lack of demand.

Plummeting consumption has also threatened the growth plans of Russia's electricity producers, which were privatized over the past few years to foreign and local investors such as E.ON, Enel and Gazprom.

Former state electricity monopoly Unified Energy System, which organized the privatization, had predicted annual growth of 4 percent to 5 percent through 2011.

This prospect, which has now been reversed, attracted a wave of investor interest to the sector from 2005 to 2007. All of Russia's electricity producers, formerly subsidiaries of UES, drafted their expansion plans based on this growth forecast.

These plans are likely to be slashed in light of the decline in demand for power, analysts have said.

Data from the dispatcher, known as the System Operator, also showed that power output had fallen 4.3 percent in February year on year, with a total of 86.3 billion kilowatt hours produced and 85 billion consumed across the country.