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Unified Energy System

July 20, 2005

Record high amount of non-payments by budgetary organizations in the Ulyanovsk Region puts winter preparations at OAO "Ulyanovskenergo" in jeopardy

Moscow. 20 July 2005. The failure by the budgetary organizations in the Ulyanovsk Region to pay for the consumed electricity and heat puts the preparations for the heating season in the Region in jeopardy. Since the beginning of 2005 alone, the payments made by the local housing and utility enterprises to OAO "Ulyanovskenergo" for the energy supplied to them were short of the amount due by over RUB500 million.

The greater part of the debts owed by consumers to the energy company, which is in excess of RUB4 billion, appeared as a result of the actions of the previous administrations of the Ulyanovsk Region. No other region in Russia has such a huge amount of debt.

The new regional administration, despite its numerous promises, has not taken any effective measures to remedy the situation. Moreover, the energy company says that the situation has got much worse compared to the previous years.

In particular, the regional authorities failed to fulfil their obligations to ensure full payment of the energy currently consumed by the budgetary organizations. By now, the payments of electricity bills have fallen to a four-year low, which is not more than 88%.

Besides, the authorities were unable to perform on the agreement between OAO "Ulyanovskenergo" and the City Administration signed in April 2005, under which the administration undertook to pay, in the second quarter of 2005, RUB 344 million of the debt owed by municipal consumers for the previous heating season.

As a result, OAO "Ulyanovskenergo" is short of funds and is unable to carry out the necessary repairs and fully pay for fuel. For instance, in June, the funds used to finance the repairs made a mere 57% of the target amount. July is the peak of the repair campaign to prepare the energy system for winter. Only prompt payment for the energy resources supplied and performance by the regional and municipal authorities of all their obligations will make it possible for OAO "Ulyanovskenergo" to complete the repairs before the first frosts.

This summer, for the first time over the past years, the energy company did not discontinue the hot water supply to city residents on the authorities' request. At present, this service is actually provided at the expense of increasing the debt owed by OAO "Ulyanovskenergo" to fuel suppliers.

In that situation, it is strange to hear some representatives of the regional government say that the energy crisis in Ulyanovsk has been overcome and there are even "signs of increasing stability in the region's development".

RAO "UES of Russia" calls on the region's authorities to fulfil their obligations to pay for the energy. Only prompt action by the regional leaders may help prepare the city for the heating season.




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