This was stated by the general director of AO MOSENERGO Arkady Yevstafyev during an internet-conference held by AO MOSENERGO at www.finam.ru—the website of Finance Analitic. RAO UES had previously approved the preparation program.

Replying to a question about implementing the repair plan, Yevstafyev said that AO MOSENERGO has had to abandon a number of other programs needed for the development of the company. In 2002 Moscow Electricity Regulator (REC) set tariffs which made it impossible for the company to cover reasonable costs and ensure the company’s profitability. For the same reason, AO MOSENERGO expects that its net profit will decrease this year.

To ensure that the required tariff be approved, AO MOSENERGO has sent a letter with justification to the Federal Energy Commission (FEC). “We hope for an objective approach on behalf of regulators to the issue of approving justified tariffs,” Yevstafyev said. If the tariffs are increased, AO MOSENERGO will expand its repair program.

During the internet-conference the head of AO MOSENERGO said that the cost of equipment repairs had skyrocketed from $99 million in 2000 to $175 million in 2001 resulting from inflation and the need to meet terms of the agreement with the electricity trade union. AO MOSENERGO has additionally allocated $37 million for unscheduled operations.