Board of directors’ progress report
2.2.1

Network exploitation

Core production assets of the Company in 2015-2017:

Assets MU 2015 2016 2017
6-220 kV substations pcs 31 716 32 068 32 501
Total capacity installed MVA 30 393 30 611 30 859
35-220 kV substations pcs 1 042 1 048 1 047
MVA 21 639 21 738 21 784
6-10(35)/0.4 kV transformer substations pcs 30 658 31 002 31 438
MVA 8 754 8 873 9 075
6-10 kV distribution stations pcs 16 18 16
0.4-10 kV aerial power lines km 119 251 120 206 121 310
220 kV and over 220 kV km 27 27 27
110-150 kV km 18 138 18 131 18 132
35 kV km 8 059 8 061 8 005
6-10 kV km 50 831 51 004 51 258
0.4 kV km 42 196 42 983 43 888
0.4-110 kV cable power lines km 6 365 6 476 6 641
220 kV and over 220 kV km - - -
110 kV km 76 77 78
35 kV km 110 110 108
6-10 kV km 3 662 3 736 3 845
0.4 kV km 2 517 2 553 2 610

The Company’s repair target for 2017 was RUB 4,145 million. Real expenses in 2017 totaled RUB 4,184 million or 101% on the targets.

Total repair costs of the branches in 2017 (RUB million):

Target value Real value Percentage completion
Permenergo 1,526 1,558 100%
Sverdlovenergo 1,449 1,486 103%
Chelyabenergo branch 1,138 1,133 100%

The overrun was mainly influenced by recovery and unscheduled works. Total costs of the branches spent on outsourcing repair works totaled RUB 531 million or 13%, with RUB 3,653 million or 87% spent on in-house repair works.

Description MU 2015 real values 2016 real values 2017 target values 2017 real values 2017 percentage completion
Power line corridor clearing ha 11,414 10,825 10,583 11,070 105%
Groundwire replacement km 84.5 91.1 124.6 169.4 136%
Insulator replacement pcs 72,099 78,387 72,121 81,830 113%
Transformer overhaul pcs 33 41 35 42 120%
Switch overhaul pcs 1,542 1,618 1,506 1,611 107%
Overhaul of isolating switches, short circuitors, disconnecting switches pcs 1,583 1,348 1,469 1,530 104%

Changes in repair scope stem from natural oscillations based on repair cycles. We intensified power line corridor clearing since 2014 ending up with 5.5-year clearing cycle. The repair target value for 2018 is RUB 3,410 million or -18% YoY, with RUB 2,862 million (84%) to be spent on in-house works and RUB 548 million (16%) to be spent on outsourcing works.

Description of per-unit incident rates in 2015-2017.

Incidents on 6kV+ networks of the Company’s branches are on a downward trend. Per-unit incident rate from incidental and urgent disturbances in 6kV+ networks shows a decline as well.

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Primary incident factors of 2017 are shown by the chart below:

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In 2017 all branches of the Company achieved reliability targets set by the regional regulators. Target and actual values of average power outage duration of the Company’s branches are presented in the chart below.

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To reduce incident rates and to enforce reliability of network performance the 2016 decree[6] has approved a set of special-purpose programs on technical development, namely:

  1. Refurbishment of 35-110 kV substations
  2. Refurbishment of 35-110 kV power lines
  3. Refurbishment of 10-6 kV backbone power lines
  4. Replacement of 6-10 kV bare wires
  5. Liquidation of injury-risk equipment
  6. Program on widening of 35-110 kV power line corridors
  7. Refurbishment of 0.4-10 kV distribution power lines
  8. Greenfield construction of 35-110 kV substations
  9. Greenfield construction of 35-110 kV power lines
  10. Construction of 0.4-10 kV distribution power lines
  11. Expansion of production and repair depots (incl. customer service centers)
  12. Crafting of integrated development programs
  13. R&D Program
  14. Development of telecommunications
  15. Development of ASTM
  16. RPA Upgrade Program
  17. Perspective Development of Metering Systems Program
  18. Special-purpose programs of the Corporate and Technical Control Systems Department
  19. Development of corporate computer network
  20. Development of distributed data center
  21. Build-up of integrated IT security system
  22. Acquisition of motorized transport and special-purpose machinery
  23. Enforcement of Counter-terrorist Security and Anti-diversionary Protection on Grid Facilities Blueprint
  24. Enhanced Fire Safety on Grid Facilities Blueprint
  25. Training Area Arrangement Program.

Implementation of the special-purpose programs resulted in reduction of disturbances in the networks during 2015-2017 from 7,152 incidents down to 4,957 incidents (- 2,195 incidents or 30.6%).

Property portfolio management:

Physical terms: Aerial and cable power lines (km); substations and other facilities (pcs) Book (residual) value as of 01.01.2017 (RUB thousand) In 01.01.2017 -31.12.2017 (RUB thousand) Out 01.01.2017 - 31.12.2017 (RUB thousand) Charged amortization 01.01.2017 - 31.12.2017 (RUB thousand) Book (residual) value as of 31.12.2017 (RUB thousand)
Assets, classified as grid facilities, namely: 44,194,749 4,526,514 76,979 4,643,907 44,000,377
220+ kV aerial power lines 49 171,414 0 0 50,177 121,237
110 kV aerial power lines 25,977 8,664,687 312,293 5,339 747,542 8,224,099
35 kV aerial power lines 9,187 1,192,742 255,326 2,822 109,768 1,335,478
0-10 kV aerial power lines 95,371 8,436,984 1,859,351 27,989 950,095 9,318,251
220+ kV substations 3 246,608 0 1 46,768 199,839
110 kV substations 636 4,821,563 147,000 1,838 617,065 4,349,660
35 kV substations 408 824,429 42.466 4 122,593 744,298
0-10 kV substations 31,454 7,382,462 865,721 15,672 682,838 7,549,673
Cable power lines (all voltage classes) 6,640 6,316,604 30,005 11,974 238,756 6,095,879
Other assets, designed for electric connection 6,137,256 1,014,352 11,340 1,078,305 6,061,963
Non-core assets enlisted in the non-core asset register 40 130,439 9,758 3,663 4,012 132,522
Other assets, namely: 4,367,028 1,430,762 6,875 412,719 5,378,196
Owned land plots 465 79,920 1,574 0 0 81,494
Fixed assets (line in the balance sheet) 48,692,216 5,967,034 87,517 5,060,638 49,511,095
Rented assets, classified as grid facilities, namely: 3,053,289 159,596 36,112 1,651 3,175,122
220+ kV aerial power lines 0 1,254 2,294 0 0 3,548
110 kV aerial power lines 88 28,047 0 0 0 28,047
35 kV aerial power lines 46 2,056 0 246 20 1,790
0-10 kV aerial power lines 4,644 273,937 19,951 25,132 647 268,110
220+ kV substations 1 116,149 0 0 0 116,149
110 kV substations 19 133,251 2,059 3,223 0 132,087
35 kV substations 8 348 0 0 21 327
0-10 kV substations 2,081 1,822,561 723 330 0 1,822,954
Cable power lines (all voltage classes) 2,578 365,929 45,013 3,656 199 407,087
Other assets, designed for electric connection 309,756 89,556 3,525 764 395,023
Other rented assets, namely: 4,710,080 2,486,044 953,785 0 6,242,339
Land plots 25,400 3,991,757 2,470,792 895,620 0 5,566,929
Assets, used under leasing agreements, classified as grid facilities, namely: 0 0 0 0 0 0
220+ kV aerial power lines 0 0 0 0 0 0
110 kV aerial power lines 0 0 0 0 0 0
35 kV aerial power lines 0 0 0 0 0 0
0-10 kV aerial power lines 0 0 0 0 0 0
220+ kV substations 0 0 0 0 0 0
110 kV substations 0 0 0 0 0 0
35 kV substations 0 0 0 0 0 0
0-10 kV substations 0 0 0 0 0 0
Cable power lines (all voltage classes) 0 0 0 0 0 0
Other assets, used under leasing agreements, designed for electric connection 0 0 0 0 0 0
Other assets, used under leasing agreements 0 0 0 0 0 0
Total rented assets, including those used under leasing agreements 0 7,763,369 2,645,640 989,897 1,651 9,417,461

Sale of non-core assets:

Pursuant to the President Edict[7], Directive[8] and Decree[9] of the Government, the Dec.29, 2016 Board of Directors meeting[10] adopted OAO IDGC of Urals Non-Core Asset Sale Blueprint. The Blueprint was revised by the Board of Directors on 22 February 2018[11]. The Blueprint stipulates principal approaches, philosophy and mechanism of exposure and sale of OAO IDGC of Urals’ non-core assets, sets criteria for counting OAO IDGC of Urals’ assets as non-core assets, maintenance of the non-core asset register, principal provisions on non-core asset sale and reporting on the progress regarding non-core asset register execution. The Dec.29, 2016 Board of Directors resolution [12] adopted the OAO IDGC of Urals’ non-core asset register (sales plan) as of Sep. 30, 2016, prepared in line with the program requirements. The most up-to-date version of the OAO IDGC of Urals’ Non-core Asset Register as of Dec. 31, 2017 was approved by the Feb.22, 2018 Board of Directors resolution [11].

Sale of non-core assets in 2017:

Asset Book value, RUB thousand Real sales value, RUB thousand Spread, RUB thousand Spread factors
A motorway in Artemovsky, the Sverdlovsk region 0.00 0.00 0.00 The property was transferred to the municipality without compensation
A motorway in Artemovsky, the Sverdlovsk region 0.00 0.00 0.00 The property was transferred to the municipality without compensation
Production and repair depot in Yukseevo, the Perm region 1,561.49 1,610.17 48.68 The sales value was defined as a result of the auction
Asbestos-cement sewerage network in Artemovsky, the Sverdlovsk region 1,748.03 0.00 -1,748.03 The property was transferred to the municipality without compensation
Nonresidential production building of Berezovo substation with a fence in Oktyarskyi, the Chelyabinsk region 312.20 321.00 8.80 The sales value was defined as a result of the auction
Nonresidential building of production and repair depot in Muslyumovo, the Chelyabinsk region 41.57 81.00 39.43 The sales value was defined as a result of the auction
Ballast road in Sazhino, the Sverdlovsk region 0,00 0,00 0,00 The property was transferred to the municipality without compensation
Total: 3,663.29 2,012.17 -1,651.12

Consolidation of grid assets:

OAO IDGC of Urals consolidates grid assets to shape a united grid area on the territory of the Company’s operations helping create a single point of responsibility for reliable and high-quality electricity supply and providing additional possibility to connect new consumers to the consolidated networks. Primary means of grid asset consolidation in 2017 were:

  • For non-commercial organizations and individuals: donation agreements. Conditions of grid asset transfer are very simple for a filer, transfer applications may be accepted in electronic form through the corporate web-site. Volume of donated grid assets in 2017 totaled 340 c.u.;
  • For commercial organizations (developers, industrial enterprises, etc.): acquisition of grid assets on account of debt repayment on contracts regarding on-line maintenance and other services (206 c.u.);
  • Acceptance of no-man’s grid assets under court decisions (240 c.u.).

Grid assets were consolidated pursuant to OAO IDGC of Urals special-purpose program on grid asset consolidation, adopted by the Board of Directors, compliant with the Company’s business plan and investment program for 2017-2020.

2015 г. 2016 г. 2017 г.
Consolidation of grid assets
MVA Km c.u. MVA Km c.u. MVA Km c.u.
OAO IDGC of Urals 1,684 4,806 31,321 2,158 5,666 38,232 2,117 5,627 38,586
Acquisition of grid facilities 6 29 183 34 40 352 16 71 244
Rented grid facilities 1,649 3,832 26,587 2,103 5,397 37,243 2,072 5,335 37,543
Other (permanent rights of ownership and use) 0 3 9 13 103 329 18 193 585
Other (temporary rights of ownership and use) 29 942 4,543 8 126 308 11 28 214
AO EESK 51 1,163 7,461 431 1,162 7,880 443 1,173 7,338
Acquisition of grid facilities 1 8 164.4 0.3 723 0.88 0 12
Rented grid facilities* 12 1,163 6,907 255 1,162 6,966 435 1,173 7,233
Other (permanent rights of ownership and use) 38 546 11.56 191 7 0 93
Other (temporary rights of ownership and use)
* No reports on rented facilities (incl. contract concluded earlier) in terms of MVA have been prepared prior to 2016.
NOTES:
Acquisition – all grid assets acquired during the reported period;
Rentals – all grid assets, rented as of the year-end (i.e. all running contracts, incl. contracts concluded earlier, transactions in force as of the year-end);
Other (permanent rights of ownership and use) - all property acquired during the calendar period;
Other (temporary rights of ownership and use) – all running contracts as of the year-end, incl. contracts concluded earlier.
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Full report or any of its chapters can be downloaded as pdf files on this page.
1About company
1.1Mission and strategic goals
1.2Market share
1.3Management systems
1.4Key 2017 events
2Board of directors’ progress report
2.1Letter to stockholders
2.2Production capital formation
2.2.1Network exploitation
2.2.2Electricity transmission
2.2.3Technological connection
2.2.4Development of telecommunications and IT systems
2.2.5Investments
2.2.6Innovations
2.2.7Efficacy enhancement
2.3Financial capital formation
2.3.1Description of tariff policy
2.3.2Analysis of revenues and expenses
2.3.3Analysis of receivables and payables
2.3.4Credit ratings and bonds
3Corporate governance
3.1Corporate governance practices
3.2Corporate governance system
3.2.1General meeting of stockholders
3.2.2Board of Directors
3.2.3Board of directors’ committees
3.2.4General director and executive board
3.2.5Remuneration and compensation policy
3.3Oversight system
3.3.1Board of internal auditors
3.3.2Independent auditor
3.3.3Internal control
3.3.4Security and anti-corruption
3.3.5Risk management
3.4Investor and stockholder relations
3.4.1Shareholder capital structure
3.4.2 Shareholder rights
3.4.3The company and stock market
3.4.4Communications with market participants
3.4.5FAQ
3.4.6Allocation of profit
3.4.7Contact information
4Stakeholder
4.1Human resources management
4.2Customer support
4.3Supplier relationship management
4.4Public and goverment relations
4.5Company’s transactions
4.6Subsidiaries and financial investments
4.7Environment protection
5Appendices
5.1Prepared under Russian accounting standards
5.2Prepared under international financial reporting standards
5.3Corporate governance code compliance report
5.4References
5.5Abbreviations and acronyms
5.6Sitemap