One of the key arguments for starting reforms of Russian power industry is “poor financial condition” of electric power companies. Large physical depreciation of capital assets is commonly admitted; principal discussions held about the possibilities of electric power companies to draw investments.
In this paper following problems (by the example of Omsk region electric power company - Omskenergo) are viewed:
- Is financial condition of electric power companies really poor?
- Basic reasons of unfavourable financial condition.
- General estimation of regional electric power system financial condition from the point of view of their ability to draw investments.
Here are some of the main conclusions:
There are reasons for concerns about fixed assets condition: their deterioration rises (especially deterioration of their active part). Liquidity and paying capacity of Omskenergo since the beginning of 1990-s became worse noticeably, there is lacking of owned current assets. Current activity became less profitable, cash flow needed for capital investment is lacking.
The main factor of unfavourable financial condition of Russian electric power companies is problems in payment and account sphere – nonpayments and payments with discount from active tariffs (by industrial users). Accepted variant of reform (division of activities) can not help to solve the problem of payments, moreover it can aggravate it. Under implicit contract conditions electric power industry payment system is an instrument of value redistribution between different economy sectors (cross-subsidizing) and discount between electric power companies managers and state officials behaviouring opportunistically.