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Annual report 2012

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Consolidated Investment Program

The 2012 consolidated investment program of the Company takes account of Holding subsidiaries’ current capex programs approved in accordance with Resolution of the Government of the Russian Federation No. 977 of December 1, 2009, including with respect to the facilities necessary for power supply for preparations for and holding of the 2014 Winter Olympics in Sochi.

The capex programs of Holding subsidiaries take into consideration the following principal requirements:

  • Compliance of investment projects with the models and programs of electricity industry development of the of the constituent entities of the Russian Federation (prepared and approved in accordance with Resolution of the Government of the Russian Federation No. 823 of January 17, 2009) or the models of 0.38–20 kV electric grid facility development (if available);
  • Inclusion of the facilities initiated in the previous years;
  • Inclusion of the facilities intended for preventing (reducing) long-lasting power outages that affect socially important facilities and vital infrastructure;
  • Inclusion of the facilities in an unsatisfactory technical condition, whose routine maintenance and repair are economically and technically infeasible;
  • Inclusion of the facilities from target-oriented programs;
  • Ensuring that metering instruments close boundaries with large customers, including the 100% closing of boundaries with consumers of over 750 kVA and allied grid organizations (TGOs);
  • Implementation of measures to build/modernize the Automated Information System of Electricity Billing Metering of the Retail Electricity Market at metering points;Inclusion of the facilities necessary to perform obligations under network connection contracts; inclusion of the facilities ensuring that generators deliver capacity under capacity supply agreements.

Furthermore, pursuant to Resolution of the Government of the Russian Federation No. 977 of December 1, 2009, the consolidated investment program contains the facilities ensuring the implementation of the following programs:

  • Energy conservation and energy efficiency enhancement;
  • Creation of the system of automated emergency and process control equipment;
  • Implementation of programs for creating the telecontrol and communication system;
  • Installation of voltage regulators and reactive power compensators.

The Company subsidiaries’ capital investment is the capital expenditures that include expenses related to new construction; rehabilitation, expansion, and technical upgrading of production and non-production facilities; acquisition of buildings, structures, equipment, land, and facilities intended for the use of natural resources; acquisition and creation of intangible assets, and other capital investment expenses.

In 2012, the amount of invested funds was 136,459 million rubles (exclusive of VAT), with financing of 148,577 million rubles (inclusive of VAT), while commissioned fixed assets totaled 137,229 million rubles. Commissioned capacity in 2012 reached 14,119 MVA and 28,790 kilometers.

KEY INDICATORS OF THE CONSOLIDATED INVESTMENT PROGRAM IN 2012

Company Capital Investment (million rubles, exclusive of VAT) Financing (million rubles, inclusive of VAT) Commissioned Fixed Assets (million rubles, exclusive of VAT) Commissioned Fixed Assets (MVA) Commissioned Fixed Assets (kilometers)
IDGC of Siberia 4,995 5,867 6,372 633 1,487
TDC 397 551 401 115 793
Tyumenenergo 10,904 9,293 11,417 865 716
IDGC of Urals 7,037 7,898 6,863 621 1,242
IDGC of Volga 9,246 11,089 8,741 780 1,753
IDGC of South 5,127 5,223 3,455 203 1,316
Kubanenergo 8,523 9,158 4,587 666 241
IDGC of Northern Caucasus 5,504 5,830 3,186 242 1,469
NURENERGO 243 339 177 31 178
IDGC of Center and Volga Region 9,458 10,873 10,049 693 3,603
IDGC of North-West 6,792 8,157 6,277 469 1,836
LENENERGO 14,891 16,000 16,075 1,911 1,581
Yantarenergo 420 517 434 23 105
IDGC of Centre 15,847 19,193 16,929 1,518 8,026
MOESK 36,095 37,425 39,095 4,792 4,320
Tyvaenergo 108 71 69 5 34
ENCE 872 1,095 3,101 553 90
Total for Holding 136,459 148,577 137,229 14,119 28,790

CHANGES IN COMMISSIONED CAPACITY UNDER THE CONSOLIDATED INVESTMENT PROGRAM FOR 2010–2012

Company 2010 2011 2012
MVA kilometers MVA kilometers MVA kilometers
IDGC of Siberia 424 1,060 349 1,548 633 1,487
TDC 85 627 5 43 115 793
Tyumenenergo 741 256 624 166 865 716
IDGC of Urals 669 1,670 424 1,169 621 1,242
IDGC of Volga 520 1,144 700 1,544 780 1,753
IDGC of South 296 467 408 1,185 203 1,316
Kubanenergo 265 166 258 240 666 241
IDGC of Northern Caucasus 216 600 316 845 242 1,469
NURENERGO 64 49 41 200 31 178
IDGC of Center and Volga Region 711 2,226 1264 3,086 693 3,603
IDGC of North-West 299 897 540 1,485 469 1,836
LENENERGO 932 1,508 996 1,713 1,911 1,581
Yantarenergo 126 64 118 154 23 105
IDGC of Centre 1,050 4,155 1490 4,630 1,518 8,026
MOESK 2,276 2,005 1597 2,726 4,792 4,320
Tyvaenergo 0 0 9 61 5 34
ENCE 95 22 166 52 553 90
Total for Holding 8,770 16,915 9,304 20,848 14,119 28,790

The fact that some of the Company’s subsidiaries began to employ the return on invested capital method (RAB) for tariff regulation was the main contributor to increased capital investment, which enabled subsidiaries to raise the value of their capex programs and expand their network connection services, including for customers qualifying for preferential terms. Capital investment in 2012 grew by 4.8% on 2011.

CHANGES IN CAPITAL INVESTMENT UNDER THE CONSOLIDATED INVESTMENT PROGRAM FOR 2010–2012 (RUBLES IN MILLIONS, EXCLUSIVE OF VAT)
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CHANGES IN COMMISSIONED CAPACITY UNDER THE CONSOLIDATED INVESTMENT PROGRAM FOR 2010–2012 (MVA AND KILOMETERS)
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BREAKDOWN OF FINANCING SOURCES FOR INVESTMENT PROGRAM IN 2010–2012 (RUBLES IN MILLIONS, INCLUSIVE OF VAT)

Source 2010 2011 2012
Tariff-based revenues 38,759 41.5% 59,728 45.9% 58,107 39.1%
Borrowed funds 15,929 17.1% 37,116 28.5% 35,849 24.1%
Connection fees and other sources 37,213 39.9% 26,533 20.4% 44,929 30.2%
Additionally issued shares 1,450 1.6% 6,779 5.2% 9,693 6.5%
Financing (million rubles, inclusive of VAT) 93,351 100% 130,156 100% 148,577 100%

The principal financing sources for the 2012 investment program were tariff-based revenues (39.1%), borrowed funds (24.1%), additionally issued shares (6.5%), connection fees and other sources (30.2%).

AREAS AND STRUCTURE OF CAPITAL INVESTMENT UNDER THE CONSOLIDATED INVESTMENT PROGRAM (RUBLES IN MILLIONS, EXCLUSIVE OF VAT)

Areas of Capital Investment 2010 2011 2012
1 Technical upgrading and rehabilitation 44,947 51.6% 76,015 58.4% 74,985 52.2%
2 New construction 37,162 42.7% 50,664 38.9% 54,497 37.9%
3 Other 4,915 5.6% 3,476 2.7% 14,190 9.9%
Total 87,023 100% 130,156 100% 136,459 100%
CAPITAL INVESTMENT STRUCTURE IN 2012
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In 2012, the principal areas of capital investment were technical upgrading and rehabilitation (54.7%) and new construction (39.9%).