Developing territory

Intensive residential construction accompanied by infrastructure development, industrial-production growth and greenfield development of manufacturing facilities in the latter half of 2000-s has lead to critical loads in the networks. Even now, when consumption decreased, the load of several 35-110 kV substations exceeds critical levels. We can easily specify definite 110-220 kV deficit zones: Serovo-Bogoslovskyi and Sverdlovsk load nodes in the Sverdlovsk region; Chelyabinsk, Chebarkul-Miass and Zlatoust-Kropachevo load nodes in the Chelyabinsk region as well as Perm-Zakamye and Berezniki-Solikamsk load nodes in the Perm region. Low speed of new construction and network update causes physical wearout and depreciation of our facilities. Average depreciation of substations, cable and aerial lines is around 67%.

Therefore, we highlighted the following key directions for grid development:

• Construction of energy facilities to liquidate deficit zones and ensure reliable and trouble-free supply
• Grid asset consolidation (creation of united grid area) on our service area to ensure reliable supply and create conditions for efficient regional grid development.
• Connection of new consumers to ensure the advancement of the Urals economy and boost of energy sales.

In this context we outline the following strategic goals:

1. Increased quality and reliability of services

The goal comprises a system created for reliable IS-based measurement of supply quality and reliability, and used during the preparation of our investment and repair programs. Besides, it also implicates raised responsibility for the achievement of quality-reliability targets within gridcos regulation system as well as satisfied connection demand of regional economies. Targets achieved by 2016 are as follows:

a) SAIFI: up to 2 times per consumer p.a.
b) SAIDI: up to 60 minutes per consumer p.a
c) Incomplete metering data outages: up to 3%
d) Voltage stability: not less than 95%
e) Incoming calls from residents missed by call centers: up to 5%
f) Average operator’s time to answer: up to 15 minutes for 20% of the longest answering intervals
g) Overdue connection applications/Overall applications – up to 5% per annum

2. Retained investment tariff component for network update and development

The goal comprises retention of adjusted RAB-system, increased transparency of tariffs and investment programs of all gridcos and supplier payment failure decisions (strengthened responsibility for owners, contractual system aligned by IDGC, liquidation of unfair suppliers). Targets achieved by 2016 are as follows:

a) Market share in terms of RGR: no less than 80% (including RGR of EESK, OAO)
b) Overdue receivables: up to 2% of the RGR

3. Increased investment efficiency

This goal comprises increased efficiency of investments into the networks (efficient ranking and selection of projects, outcome monitoring), high load of commissioned facilities (more precise demand plans, revised criteria for closing power centers, stage-by-stage construction as well as strengthened motivation of various IDGC divisions). Besides, it also implicates decreased construction costs (typical technical solutions, increased transparency of unit costs) and increased investment efficiency (CPM system). Targets achieved by 2016 are as follows:

a) Unit capex costs per one applicant: 30% decrease by 2014 (in real terms)
b) Load of new substations within 4 years after the launch (n-1 calculation): no less than 45%
c) Capital charges: at least 2% below the regulator’s quota

4. Energy-saving and loss decrease

This goal comprises launched metering systems complying with the Regulations on technical metering policy in grid segment (in a volume stipulated by the approved perspective metering programs, metering infrastructure reaching 19.8% by 2017). Besides, it also implicates a united system on energy saving and efficiency increase created in our branches (target loss indicator decreasing from 9.7% in 2012 to 9.2% in 2015) as well as measures taken to find reserves for loss decrease down to 8.2% by 2020 (in comparable conditions, last mile consumers excluded).

5. Increased opex efficiency

This goal includes optimized expenses on repair, exploitation, control and auxiliary functions (asset management program and increased labor productivity), personnel development (training and exchange of knowledge, increased KPI and professional growth orientation, effective evaluation and promotion of best employees).

We plan to reduce opex per a consumer in 2016 by 20% on 2011

6. Increased transparency on IDGC operations

The goal includes increased transparency on operations of IDGC and its SACs (information transparency, implementation of negotiation principle – tariff vice quality and reliability - with regulators) and focused policy to enhance confidence in IDGC.

Targets achieved by 2016 are as follows:

a) Completeness of information disclosed by branches and IDGC via the Internet - 100% of the branches disclose key information via the Internet
b) Increased share of consumers with positive perception of IDGC (its branches): no less than 50% of consumers recognizing the brand