It's official (or as official as anything gets in politics, especially in Russia). The Chubais-headed electricity monopoly, Unified Energy Systems of Russia (UES), is slated to go the way of all things on March 31, 2004.

Reform of the power industries is controversial for several reasons. In the present case, there is the fact that UES is headed by Anatoly Chubais, a co-founder of the plan and a man whose name in Russia is synonymous with insider deals and illegitimate sell-offs (and, some would say, simple robbery). This, and the nature of the current schemes for restructuring, lead many to worry that what we are in store for is nothing other than a repeat of the loans-for-shares scams (sorry, privatization plans) of the 1990s. This concern, while hopefully in the end unjustified, is a very real one and the circumstances around restructuring certainly insist upon a careful, close observation of a process that should be made as transparent as humanly possible; we need to see exactly where everybody's hands are at all times.

Another bone of contention in reform of the power industries lies in whether and to what extent the government should subsidize utility prices. People in Russia pay significantly lower rates for energy than they would in a fully operational market system. This is one of the main problems of the economy – power companies can't turn a profit selling energy. However, many people are concerned that, if such subsidies are lifted, many Russian citizens will simply be unable to pay to heat and light their homes.

According to Prime-Tass, State Energy Commission chief Georgy Kutovoi said on Wednesday that tariffs for electricity would rise by 100 percent by 2005, reinforcing earlier statements by Economic Development and Trade Minister German Gref that they would rise by 100-120 percent by 2004.

This is not just an issue being raised by populist demagogues like Communist Party head Gennady Zyuganov. Populist demagogues are only able to get away with what they do because they are in fact "populist" – that is, they are perceived by large segments of the population as representing their interests (or at least as being better than the other guy). It is emblematic of the level of the population's concern that, in a recent poll, 60 percent of respondents indicated that they would prefer to see the electricity-generating and -distributing industry entirely in state hands, and only 10 percent believed the country will be better off with UES privatized and broken up into several companies.

There is little doubt, however, that proper reform of the electricity monopoly – like that of the other monopolies, particularly gas, the backbone of the Russian economy – is essential. This is especially true given predictions that the country will face a shortage of electrical power as early as in 2003. And an integral part of any reform carried out along market lines must, of course, aim at the goal of eventually demanding market prices for goods and services. However, acting as if the concern of the people about what will happen to them is a mere "political obstacle" – a common euphemism for "the fact that the people don't want to do what we want them to" – is the very antithesis of democracy.

This is a very important issue for a large number of Russians. Russia is not exactly a balmy tropical country in which people can easily survive without heating and power. For this reason, subsidies should not be lifted in one fell swoop and without targeted exceptions. Far better would be a graduated system of sliding subsidies aimed at alleviating the burden of people at the lower end of the income scale – and let's face it, that is much of the Russian population. On the other hand, the middle class – however one chooses to define this concept in Russia – could surely pay market rates. Not to mention the rich. Surely there is enough handy cash floating around Rublyovskaya Shosse to pay market rates for power, and maybe – heaven forbid – some taxes, too.