The UES board approved a final reorganization scheme earlier this month.
Under the scheme, the Federal Grid Company integrating all transmission networks, Hydro-WGC consolidating all hydroelectric power plants, the System Operator, wholesale and territorial generating companies (WGCs and TGCs) and other elements will become independent entities, and the UES will lose its monopoly status.
The principal idea is to establish a non-commercial partnership where the state will have a deciding vote, an Economic Development and Trade Ministry official said, adding the partnership could be created by mid-2008, when the UES reorganization is complete.
In November 2006, the UES aired plans to hold initial public offerings (IPOs) for up to 15 of its subsidiaries established in recent years through power sector reform.
Russia's power sector has undergone radical changes in recent years designed to streamline it, make it more efficient and attractive to investors, specifically through the creation of specialized setups replacing vertically integrated companies.
At the final stage of reform, generation, sales, and maintenance repair companies will be mostly privatized, competing with each other, but natural-monopoly functions, such as power transmission and distribution, will remain state-controlled.
