In my opinion, the electricity sector reform carried out in 2000 to 2008 can only be appreciated by managers and owners of the companies who will come after us. For today's Russia, it is a reform which directly influences the fundamental system of the economic relations which evolved in our society. The energy workers' slogan "Reliable and safe electricity supply" can now be supplemented with one more adjective — "and efficient".

The reform has given the sector a most important thing — incentives to invest in the creation of new generation and distribution facilities. Today, we are seeing that "energy worker" as a profession is regaining its respect and prestige which it lost back in mid-1990s. Such terms as "market", "competition", and "IPO", which are new for the sector, have now become common in the energy lexicon. It means that the sector is finally turning from a state monopoly into a market-based sector of the economy. For me personally, the electricity reform is one of the projects I am not ashamed of.

I think we have seen something unbelievable happen: the electricity reform, the most large-scale restructuring reform in the country in recent years has been completed practically according to the schedule. The very fact is unprecedented in the history of reforms in Russia.

Also, we have to take into account the scale of the work done — valuation of assets, unbundling of the vertically-integrated regional energos, establishment of new companies — these processes took place in all of Russia's regions. Add the creation of the regulatory and legal framework, because most changes are unprecedented.

I should note that it is one of the few cases when those who planned and implemented the reform were guided by the sector's long-term interests. Unfortunately, such approach is a rare thing these days, especially in the private sector. Probably, this is why the investment programme in the electricity sector is the most large-scale one compared to all other economy sectors. And this is what we dreamed about at the dawn of the reform.

Today, we can confidently say that the primary objectives of the reform have been achieved: energy businesses have improved their efficiency and the conditions have been created for the sector development on the basis of private investments. I believe that this success is primarily due to the well-coordinated work of the Government, RAO UES entities, and other participants in the process. I remember very well that just about two years ago the text setting out the points of disagreement between the Government and RAO "UES of Russia" about the introduction of a new electricity market model was much longer than the text of the proposed new regulations. We had to start thorough work to come to agreement. I would compare the complexity of the discussion which ended up in approval of the new regulations to the initial discussion "the electricity industry reform in Russia: to be or not to be".

All these discussions have something else in common — that is, a successful "full stop". Now, when we have put down the last full stop — the completion of reorganization of RAO "UES of Russia", we are much more confident that the reform is a success. I would like to thank all the authors and active participants of the electricity reform who have done such fundamental work to turn the electricity industry, a technologically complex sector which has historically been a monopoly, into a sector based on modern principles.

I believe that the implementation and completion of the restructuring in the electricity sector is now one of the priority tasks in the development of Russia's economy.

The significance of the electricity industry reform is demonstrated by the level of the governmental authorities where the key decisions are made.

The reform in the electricity industry was designed to improve the sector's efficiency and ensure its steady development by dividing the sector into natural monopolies and competitive businesses.

I hope that as a result we will see a higher level of competition in various areas of electricity generation and sales and reliable generation and distribution due to a significant growth of investments in the industry. I also believe that it is necessary to preserve state control over electricity transmission, dispatching and hydro power generation.

The reform we have implemented in the electricity sector will give Russia a competitive edge in the global economy.

The sector is now able to carry out modernization, create new capacity and ensure steady production growth. The sector will have economically justified pricing, and our society will have effective mechanisms in place to stimulate energy saving.

As we all remember, the need to reform the electricity industry to ensure reliable energy supply to Russia's economy and population as well as to attract investments into the sector was primarily dictated by the predicted growth of the demand for electricity and heat and anticipated capacity shortfall.

The work done so far has laid a solid regulatory, economic, technological, and infrastructure basis for the completion of the structural reform and created efficient, reliable, and competitive electricity industry.

The sector reform is nearing completion. Among the most important interim results, I would like to note the creation of the new sector structure, attraction of large-scale investments and determining the parameters of the stepwise liberalization of the electricity market.

But much is still to be done. Among the priority tasks is the creation of the regulatory framework needed for the successful completion of the reform and further operation of the target electricity market model. Special attention is to be given to the development of antimonopoly controls on the wholesale electricity and capacity market and the conditions for the industry operation after the reorganization of RAO "UES of Russia" is completed.

I am convinced that the electricity reform is a successful large-scale restructuring project which helped eliminate the threat of decline and collapse in one of the basic sectors of the Russian economy. Besides, over these years, RAO "UES of Russia" has given the country a pool of talented, highly professional, and, which is especially important, market-oriented managers.

Due to the fact that the electricity industry began to be regulated by standard economic laws, it attracted investment that seemed unrealistic not so long ago. It created the conditions for innovative modernization of energy enterprises that was aimed at energy saving and rational use of fuel resources.

Chairman of the Management Board of RAO "UES of Russia" Anatoly Chubais and his energetic and highly professional team have—without exaggeration—done a tremendous amount of high-quality work. Certainly, the Russian energy industry still has to implement a lot of important and large-scale tasks after the reorganization of RAO "UES of Russia". But the key thing is that a solid basis for an efficient market-based energy industry has been created and it gives us confidence that we will accomplish all these tasks.

I think that the reform in RAO "UES of Russia" and the Russian electricity industry is the most large-scale and fundamental reform in the world's history of corporations. Its key elements are adherence to the principles in the process of creation of the electricity market and its mechanisms, democracy, involvement of a wide range of stakeholders in the discussions and development of key provisions of the reform.

It is curious that while the European Commission is only issuing its recommendations on the electricity sector reform in the EU member states, Russia has already implemented its energy reform. The sector's investment attractiveness has increased greatly, and what is the most important thing, it is sure to increase many-fold.

For me it is especially important that the reform at RAO "UES of Russia" and its subsidiaries was implemented taking into account minority shareholders' interests. And that was a big accomplishment of Anatoly Chubais and his team, as well as the representatives of the Government on the Board of Directors of RAO "UES of Russia".

I believe that the reform in the electricity industry is one of the major reforms implemented in Russia over the past ten years and has radically changed the national energy sector.

Lack of reform acted as a constraint on the development of energy companies. Owing to the reform, the sector has entered a new phase of its evolution. However, I believe that it is too early now to evaluate it. Time will show how efficient was the reorganization model implemented by the management of RAO "UES of Russia".

As for me, the developments in the electricity industry over the past few years gave me a lot of information to think over.

Great changes have taken place in the electricity sector during the reform years. This occurred without a slightest loss in manageability of the Unified Energy System of Russia or any decrease in the system's reliability. Certainly, this partly is an accomplishment of the Government, which has created a solid regulatory framework for the sector's development in a new environment.

The legal framework created practically from scratch made it possible to implement the corporate restructuring smoothly: carry out functional unbundling at the regional energos, establish a new generation and power grid companies, launch a new electricity market model, and ensure influx of investments.

I'd like to make special mention of the market regulations. After long discussions, the Interagency Commission for Electricity Reform with active cooperation from colleagues from the RAO UES Reform Management Center approved two key governmental regulations — regulations of operation of wholesale and retail electricity markets. As a result of the reform, the Russia's electricity industry has become completely different and the major Russian and foreign investors have started to believe in it.

The electricity industry reform is a major project involving simultaneous transformation of a non-market vertically-integrated state-run organization into groups of unregulated non-affiliated private companies and regulated infrastructure entities. It was implemented in a complex economic and political environment and the industry had to ensure reliable electricity and heat supply. In other words, it was a very hard and risky undertaking. Though it is not completed yet, its first results demonstrate great possibilities of private capital in addressing serious infrastructure issues, emergence of competition, and efforts taken to achieve efficiency, importance of price signals, and competition control.

This reform is a benchmark for the other natural monopolies and other projects seeking to reduce the state's involvement in key economic areas.

For me, it is in many respects my personal project I have been involved in since 2000. I was an Official Representative of the Government of the Russian Federation in the State Duma during the period when the legislative package on the reform was passed and adopted, oversaw the reform of natural monopolies in the Ministry of Economic Development and Trade, and for many years was Member of the Board of Directors of RAO "UES of Russia". I can say that I have learned a lot from the reform.

The electricity industry reform for Russia, without exaggeration, is a vital issue for our country. When back in the early 1990s we started the first market reforms, it was obvious that our economy would not be able to develop efficiently without a reform of natural monopolies, primarily, the electricity industry.

Transformation of such a complex industry into a market-based sector is an extremely difficult task from the economic, legal, technical, and political perspective. Not everything went smoothly and without problems. But our key task, the attraction of vitally important investments in the industry, started to be addressed.

My participation in the reform process might be divided into two periods. When I was head of the Antimonopoly Ministry, I spent a lot of my time and efforts to create the regulatory framework for the electricity industry reform. And over the past four years, as a member of the Board of Directors and Chairman of the Appraisal Committee, I tried to accelerate, and make more transparent, the mechanism of transition to new forms of ownership in the energy industry, and ensure capital inflow in the sector through a market-based process.