SverdlovEnergoSbyt, the region’s heat and electricity supplier, will have to cut electricity consumption by Serov Ferrous Alloys Plant, reports the company’s press officer.

According to SverdlovEnergoSbyt, this has been brought about by unpaid electricity bills which, in their turn, were left unpaid as a result of certain violations in the supplier-changing procedures. The plant announced it was going to cancel its agreement with SverdlovEnergoSbyt at the beginning of 2007. The latter spent two months discussing the procedure of transferring the plant from one supplier to another; these meetings involved the plant’s management, the would-be supplier’s executives, and some representatives of the executive branch. Serov Ferrous Alloys Plant refused to comply with the legal supplier-changing procedures (that is, to provide for the separate accounts for electricity consumption, pay off all of their current debts, and compensate SverdlovEnergoSbyt for the profits they would lose in 2007).

‘SverdlovEnergoSbyt was asked to pay 118,994,000 RUR in compensation for the damage allegedly sustained by the plant when its transformer units were broken and the power was cut off in May-June 2006. The plant’s management decided to lay a claim against the supplier more than six months after the event actually occurred and the investigation was conducted. This could be explained by the fact that the plant will have to pay more to the new supplier; the company might want to make up for these losses by reconsidering last year’s accident and getting money from SverdlovEnergoSbyt. This would allow the plant to demonstrate the cost-cutting effects to their shareholders,’ says the spokesperson for SverdlovEnergoSbyt.

The supplier also believes Serov Ferrous Alloys Plant currently owes them about 280 million RUR.