Tuesday, June 19, 2018

Appraisal leads to disagreement over power plant

Integrated Energy Systems and UC Rusal are disagreeing about the proposed sale of the Bogoslovsk combined heat and power plant following a recent Ernst & Young appraisal of the plants value.

The sale was originally announced by Prime Minister Vladamir Putin in December as a way to ensure the stable operation of Rusal's Bogoslovsk Aluminum Smelter, which is the power plant's largest customer, COSPP.com reports.

Rusal was not satisfied with Ernst & Young's report and plans on appealing to the Economic Development Ministry and Federal Environmental, Technological and Atomic Oversight Service for a revaluation. IES, however, dismissed Rusal's concerns over the appraisal.

"We will decline a reappraisal, we believe it is unnecessary," Yakov Tesis, IES' deputy CEO for corporate governance, said, according to COSPP.com.

Ernst & Young valued the old plant at approximately $42 million and the new plant at approximately $67.8 million, while the installed heat network is valued at $2.3 million.

Rusal deputy CEO Vladislav Solovyov said that the evaluation is highly inflated, and is concerned that the CHPP's current thermal capacities are insufficient to cover the smelter's needs. The two parties have signed a memorandum allowing six weeks to settle these disagreements.