PRESS: Econ, energy ministries disagree on power plant upgrade plan

MOSCOW, Aug 22 (PRIME) -- Russia’s Energy and Economic Development ministries have failed to settle their disputes on a 1.4 trillion ruble upgrade program for old thermal power plants, and now the government is to solve them, Kommersant business daily reported on Wednesday.

A a protocol of a meeting of Deputy Energy Minister Vyacheslav Kravchenko and Deputy Economic Development Minister Mikhail Rasstrigin was sent to the government on August 10. Now Deputy Prime Minister Dmitry Kozak is to hold a government meeting on Wednesday to solve the disputes and submit a final edition of the upgrade plan to an August 27 meeting of the presidential commission for the fuel and energy sector.

The Energy Ministry sees return of investment into upgrades of thermal power plants in 16 years, the level of localization for equipment at no less than 90%, and an increase of prices for the power produced by old plants by 6–7 percentage points.

The Economic Development Ministry wants the rate of return to fall, and suggests a floating rate of weighted average capital cost of 8–12% depending on the ratio of own and borrowed capital, the cost of borrowing, and other factors. The Energy Ministry wants the weighted average capital cost to stand at 14%.

The Energy Ministry also suggested an indefinite grace period for the launches of gas turbines with capacities of over 65 megawatts without any fines for delays in launches, meaning that consumers would have to pay for non-existing capacities. The Economic Development Ministries suggested a grace period of only one year, and a compensation of fines for companies from the federal budget.

(67.1783 rubles – U.S. $1)

End