Moscow, 16 December 2004. In connection with publication by some mass media of information regarding reduction of power supply to some units of the Baltic Fleet, the Executive Director of Business Unit No. 1 of RAO "UES of Russia" Vladimir Kimerin stated:

OAO "Yantarenergo" did not limit the power supply to the strategic entities of the Baltic Fleet and the Defence Ministry of the Russian Federation in Kaliningrad Region despite the fact that the current debt owed by the Navy to the energy company for electricity and heat is in excess of RUB80 million and is continuing to increase.

According to Vladimir Kimerin, short-term limitation of power supply to some entities of the Baltic Fleet in the city of Kaliningrad was of a forced and purely local nature. He emphasized that the power supply was reduced only to the subsidiary and ancillary facilities of two coast units, which, as the navy said, could not adversely affect the alert readiness of the strategic units.

It should be pointed out that the actions taken by OAO "Yantarenergo" to reduce the power supply were in full accordance with the laws regulating the procedure for limiting the amount of power supplied to consumers controlled by the Defence Ministry. Resolution of the Russian Government No. 364 of 29 May 2002 gives energy supply organizations the right to reduce the supply of electricity and heat to such consumers in the event that the budget allocations are exhausted, as was the case with the Baltic Fleet entities.

RAO "UES of Russia" has repeatedly requested the Government of the Russian Federation to sort out the problem of electricity and heat payments by the Defence Ministry entities, including allocating additional funds for 2004. However, this problem is still unresolved. The debt owed for electricity and heat by the Defence Industry entities to RAO "UES of Russia" enterprises is in excess of RUB1 billion. At the same time, the deficit of funds experienced by OAO "Yantarenergo" because of consumer non-payments creates problems in the operation of the Kaliningrad Region energy system during the autumn/winter peak load period and jeopardizes reliable and uninterrupted power supply to the region's disciplined consumers.