Unified Energy to Spend 50.5 Bln Rubles in 2005 on Repairs

RAO Unified Energy System, Russia's national power utility, will spend 50.5 billion rubles ($1.77 billion) this year repairing and upgrading equipment to avoid electricity shortfalls.

OAO Mosenergo, Moscow's main electricity supplier, will be among the Unified Energy units to complete the most work this year, Unified Energy said today in an e-mailed statement.

Russia needs to add generators and replace or enhance existing equipment, much of which was built in the Soviet era. Mosenergo, which has some gear that is more than four decades old, said it needs to spend $285 million a year to modernize its network after blackouts disrupted the Russian capital on May 25.

Russia is breaking Unified Energy up into generation, transmission and distribution businesses to attract investment and boost competition in the industry

Unified Energy said units based in the Russian cities of Samara, Krasnoyarsk, Belgorod, Lipetsk and Perm will be among the energy producers to complete the most repair work this year.

A fire late on May 24 at Mosenergo's Chigano substation triggered rolling blackouts that cut electricity to a quarter of Moscow, disrupting the cities subway, water supplies and Internet traffic.

Unified Energy, which is 53 percent government owned, produces about 70 percent of Russia's electricity. The rest comes from nuclear power plants and some smaller thermal plants owned by other companies.

To contact the reporter on this story: Michael Teagarden in Moscow at mteagarden@bloomberg.net.

To contact the editor responsible for this story: Tim Coulter at tcoulter@bloomberg.net

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