MOSENERGO plans to raise power and heating rates in the Moscow region at the beginning of March, said V. Nazin, MOSENERGO's deputy General Director on economics at a briefing held today. The rates will be raised by approximately 25 percent.

Moscow region industrial customers will continue to pay slightly more for heating and power than individuals pay. This will keep the rate increase for individual customers to no more than 20 percent. Electricity rates are higher than heating rates. To overcome losses from producing heat energy, MOSENERGO is making every effort to balance the rates for these two types of energy. In the coming rise heating rates will be increased a bit more than power rates.

Nazin also said that the rate increase would not provide the necessary amount of resources needed to cover the company's costs for ensuring reliable production and supply of power. For instance, the capital construction program still remains under-funded by 700 million rubles. This hampers putting new facilities into operation as well as meeting increased demand for power and heat energy. The demand growth for 2001 is estimated at 3.6 percent.

All discounts on electricity and heating will remain unchanged. "Maintaining the discounts for power and heating for lower income social groups remains one of our priorities," Nazin said.

The final increase ratio and the date new rates will go into effect will be determined by the Regional Energy Committee of the Moscow region at a meeting later this week.