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. Last Updated: 07/27/2016

Electricity Sales Surge to 6-Year High

Moscow energy monopoly Mosenergo sold 4.5 percent more electricity in 2000 than it did the year before, the company said this week — the highest rate of sales growth of any Russian utility in six years.

Analysts said the growth in energy sales is a result in a rise in consumer purchasing power and industrial production.

"Higher electricity production is a direct result of a growing economy, especially production," said Troika Dialog energy analyst Kakha Kiknavelidze.

"This is a very important performance," said Mikhail Seleznyov, energy analyst at United Financial Group.

Mosenergo sold local consumers a total of 51.2 billion kilowatt-hours, or kWh, of electricity and exported an additional 17.7 billion kWh to neighboring regions — a total production increase of 5.2 percent over 1999.

The ability to provide nearly all of the electricity for Moscow and the Moscow region and still be able to export nearly a quarter of its overall output was the result of an aggressive investment program, the company said in a press release this week.

Several foreign companies and banks invested more than $211 million in Mosenergo last year to modernize the plant's aging equipment and boost its production capacity.

The utility's largest investor, the European Bank for Reconstruction and Development, issued a $50 million credit to the company for the completion of a pump storage power plant in Zagorsk.

With the EBRD planning to invest an additional $100 million in the Zagorsk project this year, and with domestic producers of high-tech heavy machinery willing to offer attractive financing for the purchase of their products, Mosenergo said it should be able to boost production another 3.3 percent in 2001.

Higher electricity production is a direct result of economic growth, analysts said.

Mosenergo chief Alexander Remezov said that domestic machine builders have "new amazing, modern technology" that should help the company optimize efficiency.

The Aton brokerage said in a morning comment that the 3.3 percent figure is realistic, considering that currently the company is operating at only 80 percent of capacity and the effects of the updated Zagorsk facility have yet to be fully felt.

Mosenergo outperformed energy giant Unified Energy Systems and is now roughly one-ninth the size of the national power grid in terms of production.

UES generated 607 billion kWh of electricity in 2000 for a year-on-year increase of 3.6 percent, said UES spokeswoman Tatyana Milyayeva. 1999 was the first time in a decade that UES boosted output, she added.

The lone piece of bad news for Mosenergo was that the amount of heat it produced declined 5 percent, which analysts attributed to an unusually warm winter and supply restrictions to debtors.

UES has not released its heat figures for 2000.