OREANDA-NEWS. On 03 February 2009 was announced, that OJSC Sverdlovenergosbyt has unilaterally rescinded contracts with LLC Metallenergofinans, which used to buy power for EvrazHolding's businesses, including OJSC Nizhny Tagil Iron and Steel Plant, OJSC Kachkanarsky Ore Mining and Processing Enterprise and OJSC Vysokogorsky Ore Mining and Processing Enterprise. LLC Metallenergofinans has fallen into arrears on payments for supplied power amounting to over RUR 538 million as of December 31, 2008.

In December the amounts owed by LLC Metallenergofinans prevented OJSC Sverdlovenergosbyt for the first time ever from making a timely payment for the power acquired in the wholesale market. The payment was delayed by thirteen days with ensuing penalties reaching RUR 3 million.

At the end of December, OJSC Sverdlovenergosbyt filed a number of lawsuits to recover the reseller's debts under two contracts. The first main court hearing to consider these lawsuits is scheduled for January 22, 2009.

In the current financial situation, OJSC Sverdlovenergosbyt is unable to credit resellers to the detriment of bona fide consumers. Continued violations of the wholesale market regulations may result in penalties imposed on the company. As a consequence, this may cause damage to consumers, who make timely and full payments to the power supplier. Malpractice by power resellers failing to comply with payment discipline creates a real threat to the region's energy security.

As noted by OJSC Sverdlovenergosbyt General Director Boris Bokarev, it is important now to ensure reliable energy supplies to bona fide subscribers. At the same time, there are plans to work out solutions for those companies whose energy security is threatened by the defaulting power reseller.