OGK-4 BOARD OF DIRECTORS APPROVES REGULATED CONTRACTS WITH ELECTRICITY BUYERS

Today, the OGK-4 Board of Directors has approved the regulated power purchase and sale contracts entered into between OGK-4 and participants of the wholesale power and capacity market. The regulated contracts provide for guaranteed payment for power and capacity supplied by OGK-4 to its counterparties at regulated prices in accordance with the Federal Tariff Service Plan.

At present, OGK-4 has entered into contracts with 72 buyers, participants of the wholesale power and capacity market. The Company has also signed all relevant documents with the infrastructural organizations of the wholesale market (NP ATS, SO – CDA, FGC UES, and Financial Settlement Center JSC). Such documents enable the Company to operate under the new wholesale market model in both the Russian European and Uralian price zones and the Siberian price zone.

The regulated bilateral contracts were adopted when the new liberalized model of the wholesale electricity (capacity) market (NOREM) was launched on September 1, 2006, pursuant to Russian Government Resolution No. 529 of August 31, 2006, "On Improvement of the Procedure for Functioning of Wholesale Electric Power Market."

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. Under this system, the market participants can buy additional power 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, OGK-4 had been active in preparing for operating under the new conditions by participating in the imitation trading organized by NP ATS, which enabled the Company to start successful operations under the new wholesale market model.