Investments

2014 investment programs of our branches were approved by the regional authorities. Sverdlovenergo investment program was approved by Sverdlovsk Government Act #1200-RP dd. 30.09.2014, Permenergo investment program was approved by the Perm Ministry of Construction and Utilities on 30.09.2014, Chelyabenergo investment program was approved by Chelyabinsk Tariff Regulator Act #39/2 dd. 30.09.2014);

Cost and physical parameters of 2014 investment program are disclosed in the table below:

 CapexCapital Expenditures, RURRussian ruble mnMillion, excl. VATCommissioned, RURRussian ruble mnMillion, excl. VATFinancing, RURRussian ruble mnMillion, incl. VATCommissioned
MVAMegavolt amperekm
Sverdlovenergo 3,006 2,924 3,199 155 758
Permenergo 2,239 2,389 2,590 141 742
Chelyabenergo 1,911 2,017 2,155 130 560
Headquarters 11 10 13  -
IDGCInterregional Distributive Grid Company of Urals 7,166 7,339 7,956 426 2,060

Financing of the Company’s investment program during 2012-2014 is displayed on the chart (RURRussian ruble mnMillion, incl. VAT):

Financing of the investment program

During 2014 the capexCapital Expenditures totaled RURRussian ruble 7,166 mnMillion, excl. VAT. Financing totaled RURRussian ruble 7,956 mnMillion, incl. VAT. Commissioning in monetary terms totaled RURRussian ruble 7,339 mnMillion, excl. VAT. In physical terms commissioning totaled 426 MVAMegavolt ampere and 2,060 km.

Directions of investments are:

Directions of financing are:

Information on our largest investment projects in 2014 is presented below:

Permenergo: Construction of 110/10-kVKilovolt Kochkino substation (2x16 MVAMegavolt ampere), 1 phase

Location: Perm
Goals and objectives: energy supply of settlements in the Perm district located in the area serviced by Perm Urban Grids.
Project design: construction of a 110/10-kVKilovolt substation with 2x16 MVAMegavolt ampere transformers and 10-kVKilovolt, 110-kVKilovolt switchgears.
Project duration: 2011-2015.
Facilities intended for commissioning in 2015: 3.92 km.

By the end of 2014 we prepared construction documentation, constructed and launched into operation 1 phase of the project: 4.8 km of a 110-kV power line (2.5 km of 110-kV double-circuit cable line and 1.68 km of a 110-kV double-circuit aerial line) and 110/10-kV Kochkino substation (open-type, total area 6,003 m², 2х16 MVAMegavolt ampere).

In 2015 after procurement procedures we concluded a 3-phase construction contract for construction of 2 10-kV cable lines from Kochkino substation to Lobanovo substation (overall line length - 2х3.926 km). Overall expenditures in 2013-2014 totaled RURRussian ruble 406 mn, excl. VAT. Financing totaled RURRussian ruble 411 mn, incl. VAT. 3-phase facility commissioning is scheduled for October 2015.

Sverdlovenergo: Reconstruction of 110-kVKilovolt Ferrosplav substation.

Location: Serov, the Sverdlovsk region.
Goals and objectives: To improve reliability and quality of energy supply to Serov Ferro-Alloy Plant.
Project duration: 2011-2014гг.
Planned commissioning 143 MVAMegavolt ampere

Capital expenditures in 2014 totaled RURRussian ruble 100 mnMillion, excl. VAT. Financing totaled RURRussian ruble 87 mnMillion, incl. VAT. We accomplished design and survey works and obtained positive state expertise findings, construction documentation and construction permission. In 2013 we replaced 14 110-kVKilovolt switches, 110-kVKilovolt transformers and several 110-kVKilovolt disconnectors. We also replaced line and transformer RPA panels, 2 110-kVKilovolt power transformers with overall capacity 143 MVAMegavolt ampere (63 and 80 MVAMegavolt ampere respectively). Commissioning in monetary terms in 2013 totaled RURRussian ruble 355 mnMillion. In 2014 we replaced the rest of 110-kVKilovolt disconnectors, 110-kVKilovolt voltage transformers and steelworks for bus bars. We also reconstructed a substation control house and switchgear. We obtained permissions from Russian Technical Supervision Service and Russian State Architecture and Construction Inspectorate to put the facility into operation. Overall commissioning totaled RURRussian ruble 454.7 mnMillion.

The financing structure in terms of investment types is presented in the table below (RURRussian ruble mnMillion, incl. VAT):

 201220132014
actualactualactual
Total 7,898 10,088 7,956
Important projects, including 1,304 2,091 651
Reconstruction and upgrade 3 410 233
New construction 1,301 1,681 418
Primary concern programs 0 0 7
Reconstruction and upgrade 0 0 0
New construction 0 0 7
Programs, including 1,959 1,717 1,249
Reconstruction and upgrade 1,475 1,210 1,243
New construction 485 507 6
Technological connection, including: 2,112 3,751 5,016
- Facilities with capacity over 670 kW; 0 995 1,290
- Facilities with capacity 150- 670 kW; 1,234 643 833
- Facilities with capacity 15-150 kW; 107 241 545
- Facilities with capacity below 15 kW; 771 1,658 2,348
- Generation   213 1
Distributive grids 616 575 222
Reconstruction and upgrade 904 321 198
New construction 261 254 24
IT 0 92 0
Automated control (except automated utility metering systems) 412 336 149
Metering and control devices 526 414 106
Safety programs 108 75 15
Acquisition of grid assets, land plots and other facilities 190 170 15
Other programs and measures 672 866 527
For information:      
Reconstruction and upgrade 4,054 4,096 3,354
New construction 3,654 5,822 4,588
Acquisitions 190 170 15

2014 financing structure:

In 2014 the key financing source was technological connection program. During 2015-2018 this trend will continue. Our financing in 2014 was mainly focused on new construction of grid facilities and development of grid infrastructure.

Our investment program for 2012-2019:

 Measurement unit2012 actual2013 actual2014 actual2015 forecast2016 forecast2017 forecast2018 forecast2019 forecast
TOTAL
Capital expenditures RURRussian ruble mnMillion, excl. VAT 7,037 9,079 7,166 6,959 5,448 5,692 6,133 4,320
Financing RURRussian ruble mnMillion, incl. VAT 7,898 10,088 7,956 8,175 6,631 6,698 7,171 5,063
Fixed asset commissioning RURRussian ruble mnMillion, excl. VAT 6,863 9,078 7,339 7,287 5,639 5,952 6,367 4,360
Capacity commissioned km 1,242 1,854 2,060 1,083 502 601 642 390
MVAMegavolt ampere 621 644 426 255 281 278 254 262
including
Permenergo (investment program was approved by the Perm Ministry of Construction and Utilities on 30.09.2014)
Capital expenditures RURRussian ruble mnMillion, excl. VAT 2,573 3,436 2,239 2,260 1,790 1,867 1,956 2,052
Financing RURRussian ruble mnMillion, incl. VAT 2,960 3,821 2,590 2,582 2,165 2,210 2,269 2,395
Fixed asset commissioning RURRussian ruble mnMillion, excl. VAT 2,604 3,484 2,389 2,411 1,727 1,997 2,016 2,052
Capacity commissioned km 422 598 742 499 169 233 247 254
MVAMegavolt ampere 248 168 141 133 141 31 71 123
Sverdlovenergo (investment program was approved by Sverdlovsk Government Act #1200-RP dd 30.09.2014)
Capital expenditures RURRussian ruble mnMillion, excl. VAT 2,571 3,503 3,006 3,033 1,954 2,077 2,200 2,268
Financing RURRussian ruble mnMillion, incl. VAT 2,693 4,000 3,199 3,583 2,443 2,436 2,583 2,668
Fixed asset commissioning RURRussian ruble mnMillion, excl. VAT 2,358 3,582 2,924 3,141 2,202 2,222 2,379 2,308
Capacity commissioned km 497 783 758 466 205 234 151 136
MVAMegavolt ampere 124 308 155 70 49 170 137 140
Chelyabenergo (investment program was approved by Chelyabinsk Tariff Regulator Act #38/10 dd. 26.09.2013)
Capital expenditures RURRussian ruble mnMillion, excl. VAT 1,884 2,130 1,911 1,666 1,704 1,747 1,977 -
Financing RURRussian ruble mnMillion, incl. VAT 2,237 2,251 2,155 2,009 2,023 2,052 2,319 -
Fixed asset commissioning RURRussian ruble mnMillion, excl. VAT 1,891 2,000 2,017 1,734 1,710 1,732 1,972 -
Capacity commissioned km 324 473 560 118 128 134 244 -
MVAMegavolt ampere 249 167 130 52 91 77 46 -
Headquarters
Capital expenditures RURRussian ruble mnMillion, excl. VAT 10 11 11 - - - - -
Financing RURRussian ruble mnMillion, incl. VAT 8 16 13 - - - - -
Fixed asset commissioning RURRussian ruble mnMillion, excl. VAT 10 11 10 - - - - -
Capacity commissioned km - - - - - - - -
MVAMegavolt ampere - - - - - - - -

Chelyabenergo investment program was approved by the regulator till 2018.

To cut investment costs per unit we took the following measures in 2014:

  • approval and control over the execution of Company’s Decree #275 dd. 24.07.2014 on targeted construction costs per unit;
  • approval of a compilation on consolidated grid (re-)construction costs for Rosseti’s needs to determine variable-based approach to construction costs per unit;
  • execution of 2014 efficiency control program, including construction costs per 1 km of power lines and 1 MVAMegavolt ampere of substations;
  • drawing up of new requirements to an internal administrative document on the approval of construction documents on start-up facility.

Information on connection under the investment program:

Reported periodConnection of consumers
Execution of connection contractIncluding preferential connection (up to 15 kW)
pcsPiecesMWpcsPiecesMW
2012 4,641 115 4,460 44
2013 9,497 398 9,062 101
2014 15,178 460 14,412 181

Loss volume in 2014 totaled:

BranchLosses, mnMillion kWhKilowatt/hourLosses, %
Permenergo 2,095 11.05
Sverdlovenergo 1,835 5.75
Chelyabenergo 1,661 7.56
Total 5,591 7.68

Control measurements performed at the end of 2014 show the Company has 130 closed main substations – 68 110-kVKilovolt substations and 62 35-kVKilovolt substations. Overall capacity utilization during the reported period totaled 31%.

 2012 investments (actual)2013 investments (actual)2014 investments (actual)
Number of closed main substations as of the reported period 86 142 130

The implementation of investment program in 2014 has not lifted limitations from 35-kVKilovolt and up main substations. Deterioration of fixed assets depends on the quantity of newly-commissioned facilities (connection, new construction or upgrade) as well as complete overhaul of facilities. The share of life-expired equipment depends on the quantity of newly-commissioned facilities (connection, new construction or upgrade), newly-acquired facilities (as a rule, previously used) and written-off fixed assets.

Indicator201220132014
Deterioration of fixed assets 63% 57% 60%
Share of life-expired equipment 55% 59% 52%

Financing of the Company’s investment program in 2012-2019:

2015-2019 investment program of the Company contains RURRussian ruble 33,738 mnMillion of financing, incl. VAT and RURRussian ruble 28,551 mnMillion of capital expenditures, excl. VAT. Actual financing during 2014 totaled RURRussian ruble 7,956 mnMillion, incl. VAT, actual capital expenditures totaled RURRussian ruble 7,166 mnMillion, excl. VAT.

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