#8 - JRL 7059
Russia PM demands parliament pass power reform laws
By Darya Korsunskaya

MOSCOW, Feb 12 (Reuters) - Russian Prime Minister Mikhail Kasyanov demanded on Wednesday that parliament approve a radical reform of the electricity industry, saying delays would bring the country's power suppliers to ruin.

"Any further foot-dragging on the reform is fraught with big risks and will worsen the quality of life of our people," Kasyanov told the State Duma lower house during a hearing on housing and public utility reform.

The Duma is due on Friday to return to the power reform in a crucial second reading of laws that underpin restructuring measures at state power giant Unified Energy System and spell out the country's future free power market.

Lawmakers are nervous about the reform, especially the potential for price spikes on a liberalised market. Parliamentary elections are due in December and Russians are furious at rising charges and the appalling state of the country's utilities.

The Duma has repeatedly delayed the second reading amid pre-election political horse trading and accusations of influence peddling. President Vladimir Putin eventually said he wanted the reform passed and made Kasyanov responsible for it.

"We are ready to bear the responsibility and are asking the Duma to approve the amended laws," Kasyanov said.

UES stock, recently enveloped in a cloud of uncertainty over when the reform would go ahead, rose 3.89 percent to $0.1283, its second day of strong gains.

HARD LESSON FROM HEAT CUTS

The underfunded, poorly run state public utilities which deliver heat and sometimes power produced by UES have had to cut energy supplies several winters running, leaving thousands of Russians without heating in their homes.

Putin recently said the system was "in ruins."

"Reform measures for the power industry, unlike housing and public utilities, may not seem urgent, but that is deceptive," Kasyanov told parliament.

"We should learn the lesson of housing and public utilities and avoid the old Russian saying 'a fellow doesn't cross himself until the thunder rolls'. If we don't start acting now, thunder will be rolling in five years," he added.

Late on Tuesday, the government's top official on economic reform, Economic Development and Trade Minister German Gref, said the power laws had high chances of passing.

They have been amended to include consumer protection measures such as a cap on the amount of power to be sold on the free market for the first three years after liberalisation.

"At the moment there is a high degree of consensus and there is hope that they will be approved on the 14th," Gref said after a series of meetings in parliament. "They (the amendments) significantly improved the laws, and lowered the risks."

But key centrist legislative groups kept up the suspense. Russia's Regions said only about a quarter of its 47 members would vote for the bills, and Fatherland All-Russia said an unspecified majority of its 50 members favoured them.

Russia's Regions and Fatherland-All Russia are members of a pro-Kremlin coalition that controls about 250 votes, over half the lower house. Perennial reform opponents, the liberal Yabloko faction and the Communists, will vote against.