Population	142,2 mln
GDP	$ 1093,1 bln
Generation	Fossil fuel: 69,07 % Hydro: 12,03 % Nuclear: 18,9 %
Electricity Market Size	979,6 TWh/year
Surplus installed capacity over demand	86 806 MW
Net Electricity Exporter	10,8 TWh

• Established in 2004
• Sergey Novikov - the Head of the FTS.
• The Head and his deputies are appointed by the Government of the RF on a permanent basis (indefinite terms of office).

• The Federal Tariffs Service is a federal body of executive power that is authorized to carry out legal regulation in the field of state regulation of prices (tariffs) for goods (services) according to the legislation of the Russian Federation, and to enforce them, except for prices (tariffs) that are in the competence of other federal bodies of executive power, or in the competence of a federal body of executive power dealing with regulation of natural monopolies having the function of determining (setting) prices (tariffs) and enforcing prices (tariffs) in the fields of activities of subjects of natural monopolies.

• The FTS is financed from the federal budget funds.

Functions:

• Determines (sets) prices (tariffs) and controls issues related to determination and application of prices /tariffs/ in the electric power industry; gas industry; transmission of oil and oil derivatives through main pipelines; railroad transportation; services of cargo terminals, ports and airports; services on generally available electric and postal communications; products of nuclear fuel cycle; defense products; vodka, liquor and other alcoholic beverages with concentration of alcohol above 28% produced in the territory of the RF or imported to the customs area of the RF; ethyl alcohol from food raw materials, produced in the territory of the RF.
• Examines disputes between executive power bodies of the constituents of the RF in the field of the state regulation of tariffs, regulated organizations and consumers.

• The FTS sets tariffs for electricity (capacity) supplied by the federal electricity (capacity) wholesale market, tariffs on electricity with due account for capacity, and electric power and capacity prices for the participants of the regulated segment of the wholesale market. Besides, setting tariffs or their cap values on electric power (capacity), delivered to the electric power (capacity) wholesale market by generators is also in the competence of the FTS, except for their sales of energy at non-regulated prices in the volume and according to the procedures set by the Government of the RF.
• Electricity (capacity) market in the RF has two-level system of specific product an electricity (capacity) circulation. The first level of electricity (capacity) market - electricity (capacity) wholesale market (EWM) includes the regulated sector, deviation sector and free trade sector. Electricity trading in the regulated sector is carried out at the tariffs set by the FST calculated based on the relevant regulatory documents. The second level of electricity (capacity) market is a retail electricity (capacity) market. The tariffs in the retail market are regulated by means of setting economically feasible electricity and heat tariffs and /or/ their marginal levels by relevant regulatory bodies (the FST, the executive power bodies of the constituents of the RF in the field of the state regulation of tariffs). Tariff regulation is strictly governed on each level (federal, regional) by the relevant legislation.
• The FTS of Russia also sets fees for services provided to the participants of the wholesale electricity (capacity) market by system organizations: JSC «RAO UES of Russia», JSC «SO-TsDU UES», NP «ATS», JSC «FSK UES».
• The FTS exercises the state regulation of: gas wholesale prices; tariffs on services of transmission of gas through main pipelines for independent entities; tariffs on services of transmission of gas through pipelines which belong to independent gas transmission entities; tariffs on services of transmission of gas through gas distribution networks; size of payments for the supply-sale services provided by gas suppliers to end-users (in the course of regulation of gas wholesale prices)
• Natural Gas Sector is dominated by the joint-stock company Gazprom, the Russian Federation owns more than 50% of its ordinary shares. Gazprom produces about 85% of the country's gas (natural, oil gas) and also owns the unified gas supply system located in the European part of the Russian Federation, through which also gas of independent gas producers and oil companies is supplied. The share of independent gas producers is about 8% of gas production, the largest being that of NOVATEC. About 7% of the total volume of gas produced in Russia is that produced by oil industry enterprises.

• In 2006, it is expected to convert to the new wholesale market model, under which the regulated segment of the wholesale market would be transformed into a system of regulated bilateral contracts, where financial obligations of buyers are determined based on the suppliers’ tariffs and planned mandatory volumes of electricity supply under a set of contracts concluded between the buyer and suppliers.
• In 2006, it is planned to start implementing investment guarantee mechanism for projects related to formation of long-term technological power reserves for electricity generation.
• In В 2006, unbundling of energy enterprises by types of activities would be completed (generation, supply and transmission of electricity), and that results in appearance of new participants in the electricity market and in changes of financial flows, which would also affect setting of tariffs in the energy sector.