Chubais Unplugged
// Electricity blackout in Moscow turns into a criminal case for Anatoly Chubais
Yesterday, because of an electric lines accident, a severe power loss happened in Moscow, Moscow suburbs, Kaluga, Ryazan and Tula regions. More than 20,000 people were stuck in elevators. The stock exchanges trading and banking were paralyzed as well as the work of many commercial and state structures (see page 4). Anatoly Chubais, head of the Russian Corporation “United Energy Systems” (UES) already claimed responsibility for the accident and the chaos that followed. The Prosecutor General office already brought up charges against Chubais, accusing him of criminal negligence and abuse of power. The prosecutors said that they intend to question the head of UES and noted that “he is not rejecting the accusations and is ready to bear full responsibility for that.”
Everything started with the fire
The technical accident happened in the electric power supply station #510 “Chagino”, which belongs to the Moscow Regional Electric Company (part of the Mosenergo) and located in the southeast outskirt of Moscow in the Kuzminki forest-park. According to Chubais, about two million people suffered from the temporary loss of power. The Chagino electric station transforms electricity current from 500 kilo Volt (kV) to 220kV and 110 kV and sends the lower current to the capital. For that purpose, Chagino has six transformers. Beside Chagino there are six other electric power supply stations that are located around the Moscow Beltway. They are all connected to each other and create a so-calling energy ring which maintains power supply to Moscow and its suburbs and also neighboring regions. Chagino was built in 1964. The station’s lifecycle was supposed to end in 1997, but the plant refurbishment was done in 2003.
The problems in Chagino started not on Tuesday evening, as was reported by UES officials, but the day earlier.
“The first time we were called to the station was Monday about 20:00 in the evening,” Mikhail Antonchenko, chief of the search and rescue squad #4 of Southeast Moscow municipality, told Kommersant. “We arrived and saw nobody there who needed to be rescued. It was a regular fire in a one-story brick building and all employees had already left the building. However, there were many high-voltage wires attached to the building, so we had to wait until the engineers will disconnect the power supply. Then everything went the routine way – firefighters covered one of the burning transformers with foam and we left. We couldn’t even imagine that such a small fire would lead to such big consequences.”
The accident happened due to the several factors. The specialists named old equipment and hot weather in Moscow as the main two. Probably, a sudden electrical surge within the “power ring” played its role as well. However, the situation in that moment did not require emergency measures: only one transformer burnt and power to the Moscovites was sent through the remaining five.
However, on Tuesday evening around 21:00 there was another call from Chagino to the fire station search and rescue service. This time four transformers had the caught on fire. The fire was extinguished pretty fast, but it was the beginning of the collapse. The only working 110kV transformer could not provide all necessary electric supply to the population and businesses in Southeast municipality of Moscow that were connected to the Chagino circuit. So, the biggest consumer of Chagino electricity, Moscow Oil Refinery Plant (MORP) in Kapotnya, had to be unplugged.
Chubais takes the blame
“Turning off electricity from the MORP could have led not only to colossal economical losses, but to a catastrophe of a state scale,” Nikolay Frolov, representative of Moscow Oil-Gas company, which owns the MORP, told Kommersant. “The thing is the oil refinery a constant technological process and you cannot just turn it off. If you will shut down the main machines that turn the oil into high octane gasoline, then the machine catalysts will oxidize and fall apart. As a result, these expensive machines can be thrown out to the junkyard. But even that is not a main problem. The pumps on MORP work from electricity. They supply oil and pump out the gas which is being created during the refinery process. Also, they bring special water that cools off the gas which is heated to a tremendous temperature.”
The turning off of the oil supply pumps, according to Frolov, could be economically problematical, but not catastrophic—the unplugged plant would stop receiving and loading up the oil. However, the turning off of gas sucking and water pumps could bring Moscow to the edge of catastrophe. “If the water pumps stop, the refinery process continues for sometime,” he explained. “It means the gas is still being produced, heated and expanding because of that. The problem is there is nothing to cool it off. So the gas pressure increases in the reservoir and at some moment, there will be an explosion. The consequences of the explosion and fire in the oil refinery, I think, are evident even for the regular person.”
Considering the difficult situation, several hours after the second accident in Chagino, the oil refinery plant had to be plugged in again. Partially electricity to MORP was supplied by Heat Power Plant #22 that is located in the village Kraskovo outside of Moscow. And another part of the electricity of the oil refinery plant had to be taken from the only remaining transformer in Chagino.
The electrical current, according to representatives of the plant, was barely enough to partially re-establish the cooling and change the main machines into a recirculation regime. At the same time, employees were able to drop the increased gas pressure—it was sent to the atmosphere and burned. All night long, the flame from the MORP pipe was going up 100 meters.
Thus, MORP was able to narrowly escape a major catastrophe. But the problems were still far from over. At 5:30 a.m. Wednesday, the last transformer of Chagino could not hold the charge and blew up. As a result, the whole electric power supply station came to a grinding halt. And that, according to one of the UES directors, Andrei Trapeznikov, led to the problems in the entire Moscow energy ring as well as all the European part of Russian connected to it. At 10:10 a.m. when there was a peak of energy consumption, four out of seven Moscow electric power supply stations crashed—“Noginsk” that supplies Southeast Moscow, “Pakhra” (Southwest of Moscow), “Kaluzhskaya” (Kaluga region) and “Mikhailovskaya” (Tula region). Also five Moscow power plants (No. 1, No. 17, No. 9, No. 11 and No. 22) and 15 more supply centers stopped. Thus, the electric accident went to the domino effect and hit the Moscow suburbs, Tula, Kaluga and Ryzan regions. Only by 15:00 energy was restored at the most important places.
Chubais “from himself and from the company” apologized to all people who suffered from the power shortage. He said “There is no question that UES and me personally as chairman, are fully responsible for the accident.”
Wolfgang Skribot, managing director of the Gazprom Bank, which is part of Mosenergo Group, explained that in the Soviet time the energy system had huge capacities in case of electrical accidents like this one. However, in the last 15 years, the connection to the power supply went up dramatically and reserve capacities went down because of the lack of investment.
The Criminal Case
The general prosecutor representative Natalya Veshnyakova said yesterday that because of mass shortage of the power supply in Moscow and other subjects of the Russian federation, the prosecutor officer brought up the charges according to two articles of the criminal code of the Russian Federation—293 (negligence) and 201 (abuse of power) toward the leadership of UES. “We understand that Anatoly Chubais is currently busy liquidating the consequences of the accident and restoring the energy supply. However, right after that, he will be subpoenaed to the prosecution investigators for questioning,” Veshnyakova said yesterday. Also, she noted, that Anatoly Chubais does not reject the blame and aid that he is ready to bear the responsibility.
These criminal code articles, especially in the case of hard consequences, carrying a prison term of up to 10 years and prohibition to hold any state commanding position up to three years. The hard conditions can be considered not only economical losses that were caused by the disruption of the power supply, but also serious harm to the health of the people or their death. Although there were no deaths registered yesterday at 20:00 p.m. said the Ministry of Extreme Situations. Besides, representatives of the UES mentioned that according to the agreement with consumers they have to fix any power shortage within 24 hours. Thus, yesterday Chubais and his subordinates still had enough time to avoid the problems which they would face right now with consumers and investigators.
“The criminal case was opened,” précised Anatoly Kurcherena, Chubais’ attorney, “and the case was opened for the purpose of investigation and establishing the culprits. But it doesn’t mean that my client will be among them. It’s evident he will be questioned but so far we did not receive any subpoenas.”
“We think the prosecution office is working within its competency,” Trapeznikov commented. “It was a very serious accident and it’s important to find out all the facts, the reason for the accident and who is to blame. UES is doing its own investigation of what happened. Also, our company has a working staff to take care of the consequences of the electrical accident. The Ministry of Industrial Energy also created a special group to investigate the reasons of what’s happened.” According to Trapeznkiov “First of all, we have to evaluate the actions of the heads of the enterprises. Were there actions adequate to the situation and if they had human error involved.” “Despite the world experience that shows that electric energy is a high technology industry, for that matter it can be considered pretty dangerous. We can name much more serious accidents in the world. If for instance, we’ll compare, the blackout in the East Coast of the U.S. and Canada several years ago, there were more than 50 million people left without power. In our case, it is only 1.5-2 million, though it doesn’t relieve us from responsibility,” admitted one of the directors of UES.
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The Energy Crisis of Trust?
Anatoly Chubais, Chairman of the Board of Directors of UES of Russia:
“Soviet energy systems were highly centralized. And the high degree of centralization with such our domestic specific as – long distance high-power lines – means that emergency automated relays were the main factor of reliability. In United States the energy systems were developed within the regions. Each region had its own system, which was connected with others. In that sense, each system is more stable, but the connections between them are more defenseless than ours. Such major accidents like it was in the USA couldn’t be and would not possible in Russia. Our basic principle is provision of reliable and accident free power supply.”
Arkady Evstafiev, General Director of Mosenergo:
“In Moscow region it is hard to imagine large scale power losses. Mosenergo has power generators which in case of emergency allow switching power and heating supply through alternative channels.”
Andrey Rappoport, head of the Federal Network Company:
“The history of Russia and Soviet Union did not have such massive blackouts like it was in the US and Canada. Even the chance of such accidents was pretty small. The networking systems of power supply provide reliable and constant current for the big cities, industrial objects, transportation, state organizations and state security. The automatic emergency systems used all along the Russian power lines allow fast and efficient localization of the problem and immediate repair. All this is supervised by hierarchy of the control points and also cooperation with other services. All these things together will permit some small power supply accident to grow to the country wide scale, like it was in the North-American continent.”
All these promises and assurances were spoken on August 15, 2003 – the next day after American and Canadian blackout.
The Traders Shared The Responsibility
The electric blackout did not lead to significant tendencies change in stock market. The RTS showed just a little drop –0.06%, to 669.24 points. Among the Blue Chips the biggest fall took UES shares (-1.52 %), though, during the trade the company stock drop once by 2,5%. And that was expected.
The minimal cost per UES share -- $0,289 – was recorded right after President Vladimir Putin stated that the UES management is responsible for the blackout. “The UES stocks went down right after Putin statement. But it was purely emotional speculative sale,” thinks Andrey Kuk, senior trader of FK “Uralsib”. By the evening situation leveled up and prices per company shares went up to $0.292. “I don’t think they will replace Chubais after that. Although, the first market reaction was to sell,” said Dmitry Kulyashenets, trader of Renaissance Capital.
Majority of other energy corporations felt the price drop. It affected the most: Mosenergo (-3.9%), Yakutskenergo (-3.4%), Irkutskenergo (-2.2%). However, it did not looked like a panic, but rather planned withdraw.
Sergey Dyupin, Natalia Grib, Alyona Kornysheva, Alexei Sokovnin
All the Article in Russian as of May 26, 2005
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