Since late 2002, Mosgorteplo, a municipal supplier of heat and hot water to most of Moscow's population, has been violating payment agreements by delaying payments to AO MOSENERGO. Mosgorteplo resells AO MOSENERGO's heat to Moscow's enterprises, organizations and consumers. As of early May, Mosgorteplo owed AO MOSENERGO 1,707 million rubles. Mosgorteplo has not yet paid for April. If Mosgorteplo does not pay for April, its debt to AO MOSENERGO will reach the critical level – almost 3 billion rubles.

Despite these violations, AO MOSENERGO provided heat to Mosgorteplo (read, all Moscow consumers) during the entire heating season at its own expense. AO MOSENERGO spent its own funds to buy fuel and generate power, to provide heat and hot water to the Moscow population. However, by now AO MOSENERGO has almost exhausted its resources. Mosgorteplo's refusal to pay for consumed power puts under risk AO MOSENERGO's summer maintenance campaign, which is financed through collecting payments. This, in turn, is fraught with delays in resuming hot water supplies after regular summer 3-week repairs.

Earlier, AO MOSENERGO had several times asked Mosgorteplo's management to settle the problem of payments. However, numerous negotiations have not brought positive results. The Moscow government would not intervene in the situation despite Mosgorteplo's actions threatening the heat supply to Muscovites. Payments not paid in full or on time lead to the accumulation of arrears. In addition, Teploremontnaladka, another municipal reseller, which provides heat to the eastern part of Moscow, also delayed payments to AO MOSENERGO. As of May 1, Teploremontnaladka's debts have reached 180 million rubles. Much like Mosgorteplo, Teploremontnaladka's debts may increase to 341 million rubles unless it pays for April.

Currently AO MOSENERGO is going to forward a letter to the Moscow government, asking for help in settling the situation with Mosgorteplo's debts and bringing order to the company's settlements. Mosgorteplo's negligence may disrupt AO MOSENERGO's preparation for the next heating season, leaving Muscovites without hot water and heat.