Complicated Sale

The MAIN JOURNAL for POWER GRID SPECIALISTS in RUSSIA

42

COMPLICATED SALE

Bills receivable is a heavy load 

to bear for “RAO Energy System 
of the East” af

fi

 liates – in the 

whole Far Eastern Federal District 
consumers are short in electricity 
and heat payments for about 28 
bil lion rubles. The leader for the 
debts is the Kamchatka Region 
(more than 6.5 billion rubles). 
Moreover, the main nonpayers 
are intermediators – housing stock 
managing companies. However, 
reservation is needed, rates in this 
region are traditionally the highest 
in the Far East: it is about three 
times higher than the national 
average. And the human wellbeing 
is obviously not on the same level.

Tangled situation is in the East 

interconnected system site area. 
As of June 1, 2016 households and 
legal entities gross debt for hot wa-
ter and central heating of the Amur 
River and the Jewish Autonomous 
Regions, the Khabarovsk and the 
Primorye Territories and the South 
of the Republic of Sakha to JSC 
“Far East Generating Company” 
(included in the “RAO ES of the 
East” corporate group) exceeded 
7 billion rubles. 72% of this amount 
(about 5.04 billion rubles) is house-
hold debt, most in the Khabarovsk 
(3.4 billion rubles) and the Pri morye 
Territories (1.5 billion rubles). Com-
panies and state-

fi

 nanced  organi-

The presidential decree of PJSC “RusHydro” additional capitalization for 50 billion 

rubles, signed in November 2012, no doubt embarked on a new page in the Far 

East energy sector. Due to this decree 4 the most essential to the region thermal 

power plants got necessary 

fi

 nancing. One power station is ready, the other three 

are under active construction. It is time to think – will power engineers have 

fi

 rmness if consumers of new capacity pay bills for the light and heat properly? 

Unfortunately, the current state of affairs spawns a considerable doubt.

New Energy

of the Far East

43

zations (especially at the municipal 
level) are also underpay.

Annually “RAO Energy System 

of the East” makes a list of 
persistent non-payers for electricity 
and heat. This list includes about 
50 companies and organizations 
from 8 regions of the Far  Eastern 
Federal District. In total subsidiary 
corporations have almost 100 000 
contracts for electricity supply with 
legal entities.

2015 year-end rating of the 

worst Far East consumers of heat 
and electric energy included com-
panies and organizations that are 
in “RAO ES of the East” subsidia-
ries collective debt for more than 
950 million rubles. These organi-
zations are not only late with pay-
ments, but also retain signi

fi

 cant 

amounts of debt for a long time.

Annually under the federal 

action “Reliable Partner” power 
engineers of each region make 
2 lists: the best and the worst energy 
consumers. Members of the Far 
East defaulter list consistently are 
on the federal rating of the worst 
energy consumers and regions with 
maximum debt burden on heating 
and electric power enterprises.

Energy Security 

Threat

Considering the fact that during 

the current year “RAO Energy 
System of the East” spends 
11.26 billion rubles on repair and 
sites preparation for autumn-winter 
period, consumers’ debts, that are 
almost three times greater, appear 
a real energy security threat.

“We have to compensate for 

short payments for the already 
supplied heat energy by taking out 
bank loans with high credit interest. 
We ride these means at the repair 
campaign, which is already under-
way. We can’t procrastinate it, be-
cause quality repairs are 

fi

 rst-order 

conditions for the uninterrupted 
supply of heat energy during our 
long winter”, Deputy Gene ral Di-
rector for sales of JSC “FEGC” 
Dmitry Bogdanovsky says. Moreo-
ver “RAO Energy System of the 
East” corporate group requires 
means both for modernization of 

energy facilities and long-term 
growth, which are also neces-
sary to obtain in the form of loans. 
“RusHydro” also has to bear the 
loan debt burden: pa rent corpora-
tion re

fi

 nances “RAO Energy Sys-

tem of the East” debts or becomes 
security in banks.

However, we can’t say that the 

fault entirely rests with intermedia-
tors. Oftentimes consumers are of 
the opinion that heat and electri-
city may not be paid. These peo-
ple don’t understand that energy is 
the same product as bread or milk. 
Moreover, those people are not 
dropouts, who live in poverty. Most 
often persistent non-payers are 
experienced managers who think, 
that it is irrational to pay for energy 
resources. That’s why plasma TVs, 
business class cars and even luxu-
ry animals can be attached. Some-
times news about debts meets with 
non-payers trying to leave country 
by means of “savings”.

Of

fi

 cial “FEGC” site reports how 

the company confronts with non-
payers. For example, in Khabarovsk 
persistent non-payers were caught 
in the parking: unlucky man had 
“scratched up” 17 000 rubles debt 
for heat energy, and had met with 
bailies carring new monitor. This 
product was immediately attached 
for repayment.

“We are 

fi

 ghting with all avai-

lable means – from the conclusion 
of agreements for the debts pay-
ment by installments and claim-
related work to the most unpopu-
lar. For natural persons it can be 
attachment of properties or cars, 

bank levy, ban on travel abroad, 
hot water-off and even eviction 
from non-privatized apartments; 
for legal entities – imposition of lim-
itations, hot water-off and charging 
a penalty clause” Dmitry Bogda-
novsky continues.

By All Legal 

Means

Permanent war on non-payers 

is a “circle pit” even at such a high 
return of short-received facilities. 
Therefore power engineers try 
to affect in different ways. The 
most effective method is consum-
ers transfer to direct payments to 
resource providers. Sometimes 
“RAO Energy System of the East” 
subsidiary retail companies have 
to buy guaran 

teeing suppliers 

due to persistent debts. So in July 
2014, PJSC “FEEC” (included in 
the “RAO ES of the East” corporate 
group) acquired JSC “Energokom-
fort” AMUR”, the guaranteeing elec-
tricity supplier in Blagoveshchensk. 
After that more than 75 thousand 
inhabitants and 2.4 thousand legal 
entities were transferred to direct 
payments. “We are working for the 
widespread transfer of customers 
to direct payments, because the 
principal debt forms by manage-
ment companies and homeowners 
associations”, Sergey Tolstoguzov 
points out.

Oftentimes under the auspices 

of power engineers unconscien-
tious management companies are 
at focused attention of investiga-

Growth of debit indebtedness to PJSC “RAO Energy System of the East” 

(as of January 1 of relevant year)

0

2 000

4 000

6 000

8 000

10 000

12 000

14 000

16 000

2009

2010

2011

2012

2013

2014

2015

2016

For electricity

For heat energy

5 426

7 018

7 145

8 045

7 648

7 393

9 753

11 829

4 972

6 130

7 194

8 786

11 004

12 017

13 001

14 381

Year

Mln rubles

44

tion agencies. For instance, at one time “Kam-
chatskenergo” trade security service accompa-
nied more than 20 criminal proceedings against 
the management companies executives who il-
legally used the consumers debts. “For us tighten 
the legislation in the sphere of housing and public 
utilities, enactment of the demand of necessity for 
licensing of the management companies activi-
ties may assist with combating of unfair Housing 
and Utility Infrastructure organizations. Inevitably, 
it will be possible to reduce the problem of debts 
growth”, “RAO Energy System of the East” repre-
sentatives tell.

Tit for tat

In the Far East the payment discipline is 

so low that power engineers annually write off 
hundreds of millions bad debts. It’s clear why 
“RAO Energy System of the East” wants to 
eliminate debts malpractice. Payments massively 
stay in unfair intermediators pockets. In instance 
for Kamchatka it became a household name: 
a few years ago “Kamchatskenergo” was forced 
to go out of service of the region, as collection of 
payments did not exceed 35-40%. Obviously, with 
such payment discipline any business economics 
is out of the question.

For such “hot spots” power engineers of the Far 

East has one recipe – transfer to direct payments 
between suppliers and consumers. In another 
area of the same Kamchatka where municipal 
authorities lent more support to power engineers 
it was able to transfer 89 multi-family housings to 
direct payments. At one payments raising growth 
from 35% to 84%. Power engineers incessantly 
go into litigation with municipal service providers 
and their owners, archive penalties, but new 

fi

 rms 

focused on such business continue to register, 
just like heads of the Lernaean Hydra: for every 
“head” chopped off, it would regrow two “heads”.

However leverage on debtors is very small. 

Essentially power engineers can only adjudicate 
their rights, and in critical incidents employ power 
cuts. “We don’t have any leverages, except claim 
settlements and restrictions.” Ilya Lishansky, 
“RAO ES of the East” Deputy Director General 
for energy marketing says. “Oftentimes debt 
is formed precisely by intermediators, just as 
ultimate customers pay on time. That’s why we 
call all prompt payers for transferring to direct
payments”.

Power engineers see the ultimate purposes of 

their proposals in the sphere of retail companies’ 
operations as encouragement of consumers 
responsibility for non-payment and transfer to 
prepayments for electricity and heat bills. Such 

fi

 rmness will work in favor not only for power 

engineers – primarily consumers will bene

fi

 t,  as 

they won’t be worried about outdated equipment 
on the local CHP. 

Territory electricity debit indebtedness structure,

mln rubles (as of June 1, 2016)

Total for PJSC “RAO Energy System of the East”– 11 476

2996

2072

2035

1585

995

778

535

203

124

154

  Primorye Territory

  Khabarovsk Territory 

  Sakha Republic (Yakutia)

  Amur Region

  Sakhalin Region

  Kamchatka Territory
 Magadan Region

 Jewish Autonomous

 Region 

  Chukotka Autonomous 

 District

  Other territories

Total for PJSC “RAO Energy System of the East”– 16 629

687

2023

1976

3921

795

5728

1121

378

Territory heat energy debit indebtedness structure,

mln rubles (as of June 1, 2016)

 Primorye Territory

 Khabarovsk Territory

 and 

Jewish 

Autonomous 

 Region

  Sakha Republic (Yakutia)

  Amur Region 

  Sakhalin Region

  Kamchatka Territory
 Magadan Region

  Chukotka Autonomous 

 District

Total for PJSC “RAO Energy System

of the East”– 11 476

1141

907

2878

3422

1199

606

549

106

70

403

195

Consumers electricity debit indebtedness structure,

mln rubles (as of June 1, 2016)

 Industrial facilities

 Transport and 

 telecommunication

 services

 Agriculture

 Network organizations

 State-

fi

 nanced organi-

zations (federal budget)

 State-

fi

 nanced organi-

zations (local budget)

 Bulk intermediators

  Housing and Utility 

 Infrastructure

 organizations

  Inhabitants on direct 

 payments

 Management companies,

 homeowners 

associations

 Others

Total for PJSC “RAO Energy System of the East”– 16 629

3675

8808

2425

61

197

464

98

Consumers heat energy debit indebtedness structure,

mln rubles (as of June 1, 2016)

 Industrial facilities

 Agriculture

 State-

fi

 nanced organi-

zations (federal budget)

 State-

fi

 nanced organi-

zations (local budget)

 Heating suppliers

 (bulk 

intermediators)

 Inhabitants

 Management companies, 

 homeowners
 associations)