As of today, pursuant to Russian Government Resolution No. 529 of August 31, 2006, "On Improvement of the Procedure for Functioning of Wholesale Electric Power Market," Sales System Administrator of the Wholesale Market of Power and Energy of the Unified Energy System Nonprofit Partnership (NP ATS) has launched a new liberalized model of the wholesale electricity (capacity) market (NOREM).
The new wholesale market model provides for a transformation of the regulated sector into a system of regulated bilateral contracts between power suppliers and consumers, making it possible to come closer to the target structure of the wholesale market. In the transformation process, it is intended to transfer to limited electricity purchases at regulated prices through the bilateral contract system, with the possibility of buying the remaining electricity volumes at free unregulated prices. In addition, according to the new Wholesale Market Rules, the free trade sector is to be transformed into the one-day-ahead market, which will afford the market participants greater flexibility in reacting to supply and demand changes.
Even before the launch of NOREM, Generation Company Four of the Wholesale Electric Power Market (OGK-4) had been active in preparing for operating under the new wholesale market model. The OGK-4 power plants participated in the imitation trading from the first day – March 16, 2006 – such trading was arranged by NP ATS. After the consolidation of its assets, OGK-4 was granted the "wholesale power market participant" status and, from July 1, 2006, participated in the imitation trading as a unified production company. The Company has entered into all relevant agreements with NP ATS for operating under the new wholesale market model in both the Russian European and Uralian price zones and the Siberian price zone. In addition, OGK-4 has entered in regulated bilateral contracts for power purchases under NOREM with its counterparties.