Abstract. We develop a method of creating skew congruences on subpowers of finite algebras using groups of twin polynomials, and apply it to the investigation of residually small varieties generated by nilpotent algebras. We prove that a residually small variety generated by a finite nilpotent (in particular, a solvable Eminimal) algebra is weakly abelian. Conversely, we show in two special cases that a weakly abelian variety is residually bounded by a finite number: when it is generated by an E-minimal, or by a finite strongly nilpotent algebra. This establishes the RS-conjecture for E-minimal algebras.