Moscow, 3 October 2005. OAO "Territorial Generation Company No. 1" (OAO "TGC-1") started its operating activities effective 1 October 2005.

Thus, today as many as five Territorial Generation Companies are carrying out operations on the basis of lease arrangements. Previously, on 1 February and 1 April this year, operations were started at OAO "TGC-14" and OAO "TGC-9", respectively, and on 1 July 2005, at OAO "TGC-5" and OAO "TGC-8".

By now, OAO "TGC-1" has completed all corporate procedures required to start operations.

The functions of operational dispatch and technological control of the thermal and hydraulic power plants located in St.-Petersburg, the Leningrad Region, the Murmansk Region, and the Republic of Karelia, have been transferred to OAO "TGC-1". The Company's functions cover generation of electricity and heat, transmission and distribution of heat to consumers in St.-Petersburg, the Leningrad Region, and the city of Petrozavodsk.

OAO "TGC-1" was registered on 25 March 2005 by the Interdistrict Inspectorate of the Federal Tax Service of Russia in the city of St.-Petersburg. The Company's share issue and share placement report were registered by the FSFM of Russia on 20 May 2005.

On 26 November 2004, the Board of Directors of RAO "UES of Russia" approved the lease by OAO "TGC-1" of the generation assets currently owned by OAO "Karelenergogeneratsiya", OAO "Lenenergo", and OAO "Kolenergo" (except for the Murmanskaya CHPP and Apatitskaya CHPP).

The Director General of OAO "TGC-4" is Andrey Likhachev. Alexander Chikunov, member of the Management Board and Executive Director of Business Uni1 No. 1 of RAO "UES of Russia", was appointed Chairman of the Board of Directors of OAO "TGC-1"; and Tapio Kuula, President of Fortum Power and Heat Oy, was appointed Deputy Chairman of the Board of Directors.

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