Shaping of united grid area

Consolidation of grids, pursuant to President’s Decree #1567 dd. 22.11.2012 on Russian Grids, became an irreversible process engaging all interregional distributive grid companies, including IDGC of Urals. The process is focused on the shaping of a united grid area on our service area and point of responsibility for energy supply. This helps to solve several problems by:

  • increasing reliability of operations and ensuring faultless supply to residential consumers and socially vital facilities;
  • eliminating patchwork in the networks and lifting restrictions on quick connection;
  • vanishing unfair regional grid companies to make regional tariff model more transparent and less burdensome for consumers;
  • providing possibilities for connection in a minimum of time;
  • enabling the increase of the Company’s assets and public utilities market share on the whole.

Actions under UGA-shaping strategy comprise the conclusion of rental or public-private partnership contracts, acquisition of grids or separate facilities, fee-free transfer (from natural persons) as well as take-over, acceptance of municipal unowned grid facilities into service or ownership.

Through grid consolidation program our branches acquired over 2 250 c.u. (393 km of aerial lines, 52 km of cable lines, substations with overall capacity of 86 MVA). Acquisition costs totaled approx. RUR 190 mln. The largest acquisitions of 2013 are Arti grids (Sverdlovenergo), Zlatoust grids (Chelyabinsk) and Osa grids (Permenergo), formerly rented by the Company.

The growth of grid asset base due to new rental contracts in 2013 totaled 870 c.u. As of 31.12.2013 we rented 36 municipal and institutional grid facilities on the service area. The volume of rented property reached 29 000 c.u. (approx. 5% of overall conventional units). In 2014 we plan to consolidate over 6 700 c.u.

Key problems arising during planning procedures for 2014 are:

  1. Tariff restrictions for current regulation period, considerable sequestering of the Company’s investment program and reallocation of investment program priorities for other target programs;
  2. Uncertainties over terms and purchase price in discussions with facility owners;
  3. High percentage of municipal grid facilities with improperly registered titles for property and land plots as well as lack of monetary resources for state registration of title in municipal, regional or federal budgets.