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IDGC of Volga

August 13, 2015

Debt of power companies to IDGC of Volga, PJSC is equal to cost of four annual repair programs

The debt of Ulyanovsk power companies for electricity supply services delivered by IDGC of Volga, PJSC (a member of Rosseti Group of Companies) totals almost half a billion rubles which, on a conservative estimate, could be the source of financing of a four-year repair program of Ulyanovsk Distribution Grids (UDG). Today, one of major non-payers is Ulyanovskenergo, JSC acting as a guaranteeing electric power supplier in the Ulyanovsk region. In July, Ulyanovskenergo paid only 92 million rubles instead of 180 million rubles. Despite all agreements for debt restructuring and repayment in regular installments, MUP UlGES which owes 310 million rubles has not made a single payment to IDGC of Volga still refraining from discharging its contractual obligations. Inzenskiye Regional Electric Grids owes 18.5 million rubles to IDGC of Volga. Increased credit interest rates prevent electric grid companies from using borrowed resources. By contrast, the late payment penalty payable to the grid companies is significantly lower than bank interest rates. Therefore, non-payers use money of IDGC of Volga, PJSC and fair consumers on an interest-free basis saving sizable amounts on bank interest rates. Non-payers ignore the fact that the branch has to discharge its own financial obligations to taxation authorities, allied grid companies, contractors and personnel. In addition, money received from electric power consumers are used to finance regular maintenance to ensure smooth operation of the sophisticated electric grid facilities. Legal proceedings remain a main method to deal with non-payers as most companies partially repay their debts only upon receipt of the relevant court decision. However, litigation often takes a long time preventing UDG from satisfying its urgent financial needs during the period of implementation of the investment and repair programs to prepare for upcoming autumn and winter season. This year, UDG's repair campaign will cover twenty-seven 35-110 kV substations, four hundred transformer substations and 2,119 km of power transmission lines of different voltage classes.




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