Electricity distribution

OPERATING RESULTS IN 2012

The Company’s total electricity delivery to customers and allied territorial grid organizations in 2012 was 597,249.4 million kWh, or 1.25% more than in 2011 (589,870.9 million kWh).

CHANGES IN ELECTRICITY DELIVERY FROM NETWORKS IN 2011–2012

CHANGES IN ELECTRICITY DELIVERY FROM NETWORKS IN 2011–2012 ON A COMPARABLE BASIS (I.E. INCLUSIVE OF ELECTRICITY DELIVERED TO LAST MILE CUSTOMERS IN 2012)

Excluding the portion of electricity redistributed to FGC UES in 2012 and delivered to customers connected to electric grid facilities that are part of the Unified National (All-Russian) Electric Grid (so-called last mile customers), electricity delivery showed a 1.95% increase.

ACTUAL ELECTRICITY LOSSES IN 2011–2012

Holding’s total actual electricity losses were 52,696.9 million kWh, or 8.11% of electricity delivered to networks. With electricity delivery to networks increased by 1.57% on 2011 (on a basis comparable with 2012), electricity losses in 2012 fell by 1,405.2 million kWh, or 0.35% against 2011 on a comparable basis. The reduction in electricity losses was due primarily to the measures implemented under the Consolidated Energy Conservation and Energy Efficiency Enhancement Program for Subsidiaries for 2012–2017 approved by the Company’s Board of Directors.

CHANGES IN REVENUES FROM ELECTRICITY DISTRIBUTION SERVICES IN 2011–2012

Holding’s total revenues from electricity distribution services in 2012 reached 540,690.3 million rubles (exclusive of VAT), which is a 4.25% decrease as compared with 2011. Revenues from electricity distribution services went down mainly due to:

• Lower electricity distribution tariffs of Nizhnovenergo, a branch of IDGC of Center and Volga Region, and Orenburgenergo, a branch of IDGC of Volga, because of changes in the mechanism for returning cross-subsidies to suppliers of last resort;
• A reduction in the average electricity distribution tariff of Buryatenergo, a branch of IDGC of Siberia. This was caused by the fact that the volume of electricity distribution services used to calculate electricity distribution tariffs for 2012 included the last mile volume (in accordance with Order No. 374 of August 25, 2011, of the Ministry of Energy of the Russian Federation). In 2010–2011, the last mile volume was not included in the planned volume of electricity distribution services used to calculate tariffs.
• Customers’ refusal to accept electricity distribution services provided by subsidiaries using last mile facilities as ordered by courts to force FGC UES to enter into direct electricity distribution services agreements with these customers (IDGC of Siberia, TDC, IDGC of Urals, and IDGC of North-West);
• Changes in Moscow’s tariff and contract model;
• The separation of retail operations from Yantarenergo’s business (in 2011, revenues were based on electricity tariffs whereas, in 2012, revenues came from tariffs of electricity distribution services).