Utility sold heat cheaper than it bought, debts top billion rubles

The Arbitration Court of Novosibirsk Region has begun considering a bankruptcy lawsuit against MUP «Energia». The claim was filed by a large plant over a debt of nearly 100 million rubles (approximately $1.1 million at current rates). The total accounts payable of the municipal unitary enterprise (MUP) has already exceeded 1 billion rubles (approximately $11.1 million at current rates). Budget funds are being allocated to pay off the debts, but these infusions won«t be enough to cover even half the sum. NGS looks at the possible scenarios, the reasons for the crisis at »Energia«, and how to revive the enterprise.

Debts and layoffs

The overdue accounts payable of MUP «Energia» as of 1 January 2026 amounts to 1.1 billion rubles (approximately $12.2 million at current rates). NGS was informed of this by the Department of Energy, Housing and Communal Services and the Department of Land and Property Relations of the Novosibirsk Mayor«s Office.

According to the energy department, there are six main creditors: JSC «NMZ »Iskra«», LLC «Gazprom Mezhregiongaz Novosibirsk», LLC «SIASK-Energo», the Novosibirsk city MUP «Gorvodokanal», LLC «Siberian Heat Supply Company», and LLC «Gazprom Gazoraspredelenie Sibir».

MUP «Energia» has existed since 1998 and is managed by Sergei Orlov. The MUP operates 27 boiler houses in the Sovetsky, Kalininsky, Pervomaysky, and Leninsky districts of the city. It also has boiler houses in the Novosibirsk District of the region. For 2024, «Energia»s« revenue was 785 million rubles (approximately $8.7 million at current rates), with a net loss of 476 million rubles (approximately $5.3 million at current rates). Enforcement proceedings totaling 258 million rubles (approximately $2.9 million at current rates) have been opened against the MUP, according to the Federal Bailiff Service (FSSP) database.

The municipality has been trying to stabilize the MUP«s debt situation through budget injections for the last two years. From 2024 to 2025, subsidies totaling 678 million rubles (approximately $7.5 million at current rates) were directed from the city treasury to compensate for lost income. For 2026, the Novosibirsk budget has allocated another 300 million rubles (approximately $3.3 million at current rates) to repay accounts payable.

The municipal enterprise«s own funds are barely sufficient to settle with creditors. According to Rusprofile, »Energia«s» net loss from 2022 to 2024 is 1.106 billion rubles (approximately $12.3 million at current rates). The MUP«s revenue shrank from 946 million rubles in 2022 (approximately $10.5 million at current rates) to 785 million rubles in 2024 (approximately $8.7 million at current rates). In 2025, four creditor notifications of intent to file for bankruptcy were published in the Unified Register of Legally Significant Information. The applicants include the companies listed by the energy department.

JSC «Novosibirsk Mechanical Plant »Iskra«» was registered in 2011; the enterprise has been operating since 1942. Since 2020, the JSC has been managed by Sergei Kondratyev. The joint-stock company is 100% owned by the Moscow-based LLC «Spetsvmtekhn», which in turn is part of the state corporation Rostec. There is no data on the plant«s income.

In addition to allocating money from the budget, the authorities have resorted to other methods to «rehabilitate» the enterprise — layoffs have begun at MUP «Energia».

«In 2025, 18 staff positions were cut at the enterprise, 16 of which were vacancies. The layoffs were carried out to optimize headcount,» the mayor«s office reported.

The Department of Energy clarified that in the event of MUP «Energia»s« bankruptcy, the enterprise»s heating networks would be incorporated into another municipal institution. The mayor«s office did not specify which particular enterprise this refers to.

Unfavorable terms

The MUP«s main creditor is JSC »NMZ «Iskra»«, located in Pashino. The joint-stock company did not respond to NGS»s request by the time of publication. The JSC filed a lawsuit to declare the debtor bankrupt in October of last year over a debt of 91.6 million rubles (approximately $1.02 million at current rates).

The debt arose in 2023, according to case materials on the website of the Arbitration Court of Novosibirsk Region. There was a contract between MUP «Energia» and the «Iskra» plant, under which the plant supplied thermal energy to the MUP. «Iskra» has its own boiler house with an area of 6.6 thousand square meters, running on natural gas.

According to the contract, the plant supplied energy in the form of hot water to «Energia»s« connected networks. The MUP, in turn, supplied the heat to the end consumer. The main debt of 80.5 million rubles (approximately $894,400 at current rates) accumulated in just half a year — from June to December 2023.

The municipal enterprise tried to contest the cost of the energy. According to the case materials, the MUP sold heat to consumers cheaper than it purchased it from the plant. «Iskra» sold hot water at 2395.67 rubles per Gcal, while «Energia» considered 1278.9 rubles per Gcal an acceptable price. The tariff did not allow selling to the public at a higher price. An expert examination showed that the price set by the plant was justified.

In June 2025, the court satisfied the claims of the «Iskra» plant and ordered the recovery of the 80.5 million ruble debt (approximately $894,400 at current rates). The claimant also demanded penalty payments of 20 million rubles (approximately $222,200 at current rates), but the court took into account that the MUP was forced to sell energy at a reduced rate and had no other sources of income. The penalty was reduced to 11 million rubles (approximately $122,200 at current rates).

The overdue debt of 91 million rubles (approximately $1.01 million at current rates) became the reason for JSC «NMZ »Iskra«» to file a bankruptcy lawsuit. Other creditors — LLC «SIASK-Energo» and «Siberian Heat Supply Company» — are participating in the case as other interested parties. The application was accepted for proceedings on 28 November. The last hearing was held on 23 January.

This is not the only lawsuit by the plant against MUP «Energia». The total amount of claims in similar cases exceeds 330 million rubles (approximately $3.7 million at current rates). In total, last year creditors filed lawsuits against the municipal enterprise for 1.1 billion rubles (approximately $12.2 million at current rates) due to non-fulfillment of obligations.

«Bankruptcy cannot be allowed»

The mismatch between the purchase and sale price of thermal energy is one of the main causes of the financial crisis at MUP «Energia», believes Andrei Gudovsky, deputy chairman of the Novosibirsk City Council.

«The enterprise»s revenue is less than its expenses, which is why the enterprise has been generating losses for more than a year. And today, the losses are already over a billion. Unfortunately, it turns out that at the local boiler houses on the MUP«s balance sheet, the cost of producing thermal energy is higher than the established maximum price levels. This is where the imbalance between income and expenses comes from,» he explained.

In the deputy«s opinion, other factors also played a role — an overly large staff and, accordingly, inflated expenses that could have been avoided.

«Since the MUP»s management is not conducting any program to reduce expenses, personnel, and losses, and is not conducting any, in my opinion, normal negotiations with creditors, we ended up in this situation. From the mayor«s office, there is certainly weak control over this enterprise,» added Andrei Gudovsky.

There are few possible scenarios for development, and bankruptcy should not be among them, the politician is convinced. He believes the mayor«s office is obliged to settle the issue with the creditors.

«Bankruptcy cannot be allowed, and accordingly, the municipality must make any decisions, somehow reach a settlement with the owner and creditors to repay the debt. The life support of tens of thousands of citizens depends on this enterprise,» the deputy stated.

The question of the advisability of further injections of money from the budget to pay off debts is moot, Andrei Gudovsky believes, since the MUP«s debts will fall on the municipality one way or another. »Rehabilitating« the enterprise could involve not only staff reductions but also cutting back on services provided by the MUP, the deputy concluded.

What to do with «Energia»?

In 2023, the Novosibirsk authorities, together with Siberian Generating Company (SGC), began a large-scale investment campaign to reconstruct the heating networks and boiler houses of MUP «Energia». On 8 February, the mayor«s office signed a concession agreement with SGC for the development of heating networks. It was reported at the time that the company would invest 4.9 billion rubles (approximately $54.4 million at current rates) by 2032.

The funds were allocated for modernizing about 7.5 thousand meters of main heating networks, as well as 19 thousand meters of intra-block communications. Furthermore, the company planned to reconstruct 80 central heating stations by 2031.

The mayor«s office signed a second agreement in the summer of 2024 with an SGC subsidiary — »Novosibirsk Heating Network Company« pledged to build eight gas boiler houses within ten years. The agreement amount at that time was nearly 750 million rubles (approximately $8.3 million at current rates).

In the opinion of Mikhail Mikhailov, chairman of the Regional Public Organization «Center for Consumer Legal Initiatives», a new concession agreement could help solve the problem, but today it is not the most profitable offer for SGC.

The public figure primarily links this to the fact that all heating networks and boiler houses of MUP «Energia» are located on the outskirts of the city. On the other hand, such a solution would help get rid of dependence on the «Iskra» plant«s boiler house, he believes.

«Networks from the combined heat and power plant don»t reach there, so these facilities are not of interest. Of course, in the future, SGC could be persuaded to take all the MUP«s networks under concession, but then they would have to think first about their own efficiency. It would even be easier for them to consider laying a pipe from the Kalininskaya gas boiler house, which is closest to Pashino, to disconnect the »Iskra« heat source,» explained Mikhail Mikhailov.

Mikhail Mikhailov believes that the only way to save the enterprise from bankruptcy with subsequent transfer of assets to a concession is to clear the debts to major creditors.

«Neither Gazprom nor Iskra want to suffer because some municipal enterprise is inefficient. Most likely, money will have to be allocated from the budget, taking it from some other pressing problems. At least this way the large debts that could lead to bankruptcy can be paid off,» added the public figure.

Last week, we reported on how SGC supplies heat to Novosibirsk homes — an NGS correspondent visited a pumping station and learned how it works.