Board of Directors approves Kolskaya Heating Company Ltd. foundation

09.06.2011

As a part of the cost control policy of Murmanskaya CHP the Board of Directors of TGC-1 approved foundation of Kolskaya Heating Company Ltd., Murmanskaya CHP subsidiary.

The top management considers transferring electricity powered boiler facilities of Murmanskaya CHP under control of the brand-new entity. It makes possible separation the fuel-oil generating capacities. As a result the new asset profile will contribute to the Company's transparency, improve the efficiency of cost control along with introduction of economically reasonable tariffs for generation of heating Murmansk Oblast.

Reference

Murmanskaya CHP JSC is a subsidiary of TGC-1 JSC. It covers approximately 75% of the Murmansk heating market. The power plant runs 13 steam boilers and 11 water boilers, 2 turbine generators and 43 electricity-powered boilers. The company owns 50 kilometers of heating grids in Murmansk and 10 kilometers of heating grids in Murmashi, Murmashi-3 and Verkhne-Tulomskiy cities.

Currently assets of Murmanskaya CHP JSC include 10 electricity powered boiler facilities in townships of Murmashi, Verkhne-Tulomskiy with installed capacity 49.79 GCal/h. The generated heat is used mainly for utility heating and hot water supply.

The actual production cost of 1 GCal of heat generated on electricity-powered boilers is 4.113  rubles while the tariff imposed by the government of Murmansk Oblast is 1.480 rubles/GCal.

The resulting losses from utilization of electricity-powered boiling facilities amount to 59% of total losses of Murmanskaya CHP JSC.