Energy price reforms, which have raised Russia's energy prices to world levels or higher, have made energy-efficient technologies more attractive. Energy is now a major share of Russian production costs, and in some factories costs per unit of output are higher than in the West because of high energy prices. High costs give energy-intensive industries strong incentives to save. Production stoppages are now less frequent because of improved power quality, and Moscabelmet is not in debt to power and water utilities. Cities also subsidize heat and hot water services with heat subsidies now dominating many municipal budgets.
Some Russian cities spend a third of their budget subsidizing citizens' heat and hot water.
The financial burdens imposed by these obligations have led cities to seek ways to reduce their energy consumption. The money saved from the efficiency program will be re-invested in further improvements to the system. U.S. Companies U.S. companies have been in Russia's energy-efficiency market for many years. Honeywell, Inc., for example, has been doing business in Russia since 1968. Other U.S. companies have entered the market more recently, including Johnson Controls, Armstrong International, EMCO, Bacharach, Fissenko Transsonic Corporation, Teledyne Laars, Fulton, and Environmentally Safe Products.