Perspective

Social and political attitudes toward cheap power were a major obstacle to electricity liberalization in Poland; they also may be one in Russia.

The Feb. 1, 2003, edition of Public Utilities Fortnightly contained a pair of articles (Competition Lost, and Superpower Opportunities) about utilities that invested abroad during the 1990s. The pairing of the articles leads to the question of what can be learned from the past to facilitate investments in future opportunities.

The experience from Poland is especially applicable for the future of restructuring the power sector in Russia. Poland, the third largest Warsaw Pact country (after Russia and Ukraine), is the most advanced in the restructuring process, and it bears many structural similarities to the power sectors in both Russia and Ukraine. But Poland was quicker to undertake market economy reforms and, consequently, first to encounter problems. An understanding of those problems can guide investors to a better appreciation of some of the issues that will arise during the upcoming reforms in Russia.