Measures to improve payment discipline

RusHydro Group’s retail companies use the following three approaches to improve debt recovery:

  • outreach measures aimed at consumers and executive authorities to improve payment discipline;
  • recovering debt through court;
  • restrictions and fines (for households and management companies, until restrictions are introduced).

Outreach

Raising customer awareness about timely payments for the energy supplied is a major measure to improve payment discipline. While a moratorium on any limitations in utility supplies and fines for non-payments were in place as a result of the COVID-19 response measures in line with the Russian Government’s Resolution No. 424 of April 2, 2020, outreach efforts were especially relevant and proved an effective way to encourage timely payments on the part of households, entities and businesses.

ESC RusHydro Subgroup companies organized publicity campaigns aimed at improving payment discipline. By developing interactive services, the companies managed to stay in touch with consumers at all times, thus minimizing the risk of non-payments. In order to strengthen payment discipline and encourage corporate consumers to discharge their contractual obligations, ESC RusHydro Subgroup has been actively involved in the regional phase of the Reliable Partner, an annual federal campaign, for several years now.

Debt recovery

In 2020, RusHydro’s debt recovery actions for non-payments translated into 19 court awards for a total of RUB 1.6 bn, including arbitration awards of RUB 928.6 mn. Of the total amount, guaranteed suppliers of the North Caucasus Federal District account for 59.2%. Taking into account carry-over balances, RusHydro actually received RUB 1,502.5 mn under court awards in the reporting period.

Besides, in 2020:

  • RAO ES East Subgroup filed 233,800 claims to recover debt on energy consumed (electricity and heat) for a total of RUB 10.2 bn and actually received RUB  7.4 bn under court awards.
  • ESC RusHydro Subgroup filed 78,800 claims to recover debt on electricity consumed for a total of RUB 3.66 bn and actually received RUB 1.14 bn under court awards.

After sanctions were temporarily disallowed between April 6 and December 31, the Group’s affiliates stepped up their efforts to file claims with magistrates courts to recover debt owed by individuals. As part of this work, the number of claims filed in 2020 was 66.4% more than in 2019, with the total claims value reaching RUB 413 mn, also an increase of 63.9% y-o-y.

Limitations on energy supplies to consumers for failure to pay for electricity and heat

Limitation of electricity and heat consumption for non-payment is an effective measure, but a last resort in ensuring debt recovery. The procedures of notifying consumers in arrears of any limitations in consumption and actual implementation of the same are in full compliance with applicable lawsProcedure for Consumption Limitations in Circumstances Other Than Power Facility Repairs or (Risk of) Emergency Operating Modes as per the Russian Government’s Decree No. 624 of May 24, 2017.. After disconnection, the electricity supply may not be resumed until the debt has been paid in full (or a debt restructuring agreement has been signed), including the penalties and reconnection fees.

After limitations of supplies and fines for households and utilities provides became partly unavailableAs per the Russian Government’s Resolution No. 424 On Specifics of Utilities Provision to Owners and Users of Premises in Apartment Blocks and Houses of April 2, 2020. in 2020, the total number of disconnections stood at 58,200. Electricity supplies were limited for 55,100 households and 3,100 legal entities. For heat supplies, the figures stood at 157 and 1,081, respectively. In 2020, ESC RusHydro Subgroup sent 244,200 notifications about limitations for a total of RUB 20.7 bn.