ANNUAL
REPORT
20
09
RELIABILITY
MODERNISATION
INNOVATION
20
09
Инвестиционная деятельность
CONTENTS
1_ _ Chairman of the Board of Directors and Chairman
of the Management Board Statements
1–1. Chairman of the Board of Directors
1–2. Chairman of the Management Board
2_ _ Key Developments in 2009
3_ _ About the Company
3–1. Our Business
3–2. Strategic Priorities
3–3. Structure
3–4. Key Performance Indicators
3–5. Key Financial Indicators
4_ _ Business Overview
4–1. Production
Delivering a Dependable Supply of Electricity
Power Transmission and Technological Connection Services
Improving Energy Efficiency and Mitigating Losses
Maintenance and Servicing
Workplace Safety
Environmental Policy
4–2. Innovation
4–3. Investments
Development of the Unified National Electric Grid (UNEG)
Investment Programme
Development of IT network
4–4. Commercial and Operating Activity
Tariff Regulation
Cost Optimisation
Procurement
Risk Management
5_ _ Financial Performance Overview
5–1. Financial Highlights
5–2. Net Profit Distribution
5–3. Loan Portfolio and Liquidity
5– 4. Credit Ratings
6
8
10
12
16
18
20
20
23
24
26
28
28
35
37
40
41
42
46
55
55
57
63
70
70
71
71
75
80
82
86
87
89
6_ _ Corporate Governance and Management
6–1. Corporate Governance Principles
6–2. Board of Directors
6–3. Management Board
6–4. Compensation of Members of the Board of Directors
and the Management Board
6–5. Internal Control
6–6. HR Policy
7_ _ Corporate Social Responsibility and Accountability
7–1. Commitment to Sustainable Development
7–2. Social Policy
8_ _ Finance
8–1. 2009 RAS Financial Statements and Audit Report
8–2. Management Discussion and Analysis (MD&A)
9_ _ Shareholders and Investors
9–1. Equity
9–2. Stock Market
9–3. Dividend Policy
9–4. Taxation Matters for Shareholders
9–5. Investor Calendar 2010
10_ _ Attachments
10–1. Subsidiaries
10–2. Transactions
10–3. Audit Commission Conclusion on the Veracity
of Information in the Annual Report
10–4. Branches
11_ _ Glossary
12_ _ Contact Details
90
92
94
98
104
105
106
110
112
114
116
118
134
148
150
152
155
156
157
158
159
160
167
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170
174
4
Federal Grid Company Annual Report 2009
5
Federal Grid Company Annual Report 2009
CHAIRMAN OF THE
BOARD OF DIRECTORS
AND
CHAIRMAN OF THE
MANAGEMENT BOARD
STATEMENTS
_ Chairman of the Board
of Directors
_ Chairman of the Management Board
1
CHAIRMAN
OF THE BOARD
OF DIRECTORS
Federal Grid Company is one of the fundamental pillars of
the economy of the Russian Federation. The Company is
responsible for the dependable operation and day-to-day
functioning of Russia’s unified electric energy grid. Indeed,
the grid is a unique infrastructure that, along with the
country’s transportation routes and pipelines, comprises
the tangible economic framework of Russia, uniting the
majority of the country’s regions. Federal Grid Company
plays a major role not only in the electric energy industry,
but also in the social and economic growth of the country
as a whole.
In 2009, the Company achieved impressive production
results and laid a solid foundation for continued growth.
The achievements were mostly a result of the favourable
collaboration between management and the government,
with the goal of gradually overcoming the infrastructure
limitations of the Russian economy. Two decisions taken
at the government level are of particular importance, and
they have substantially increased the potential to modernise
Federal Grid Company in the immediate future.
First and foremost, Federal Grid Company was given the
green light to switch to a new tariff system for billing electric-
energy transmission services rendered within the backbone
grids. Prior to and including 2009, the cost-plus method used
for billing stalled the attraction of necessary investment in grid
development, and did not provide incentives for cost saving.
Today, in accordance with the decision of the government of
the Russian Federation, the Company has fully switched to
the Regulatory Asset Base (RAB) regulation of tariffs, which
guarantees a fair rate of return on invested capital, increases
the Company’s efficiency, as well as improves the reliability
and quality of consumer services. The promising outlook of
this model of regulating tariffs has already been demonstrated
worldwide.
The importance of the government’s other decision and its
effect on the future growth of Federal Grid Company cannot
be overstated: in 2009, the Russian government approved
the Company’s 519.4 billion rouble investment programme for
2010–2012. These funds are earmarked for the technological
renovation and modernisation of the Unified National Electric
Grid (UNEG) units, the creation of the possibility of connecting
new generation units and consumers to the grid, as well as
the development of innovative technology.
The revival of growth in the Russian economy following
the economic crisis will lead to an increase in demand for
electric energy. In line with this, I am certain that Federal Grid
Company is fully ready to meet the demand and continue to
be a sturdy pillar supporting Russia’s economic surge.
Sergey Shmatko,
Chairman of the Board of Directors
Minister of Energy of the Russian Federation
8
Federal Grid Company Annual Report 2009
9
Federal Grid Company Annual Report 2009
CHAIRMAN
OF THE MANAGEMENT
BOARD
My first year as the Chairman of the Management Board of
Federal Grid Company coincided with a rather challenging
economic period for Russia. This meant great responsibility
for Federal Grid Company and for me personally, because
the Company is part of the backbone of the Russian economy
directly responsible for strengthening the country and
assisting domestic companies in overcoming the aftereffects
of the economic crisis. Today, we can confidently say that
we handled the challenge that was set before us by the
government in 2009 well, and placed the Company squarely
on the path to continued growth and improvement.
We moved forward significantly in all of the top-priority areas
of our activity, from increased reliability of electric energy
transmission to technical modernisation and innovation
and improved economic efficiency. We continued to grow
the Company, which, on the one hand, should anchor the
country’s economic growth and modernisation, and, on the
other hand, should meet the expectations of our shareholders
and investors.
Federal Grid Company finished 2009 with positive production
and financial results. Indeed, total real output of electric
energy from the UNEG to distribution grid companies, direct
consumers and players on the wholesale electricity market
(WECM), as well as unreformed energoes, was 452,662.172
mln kWh. Also according to the results of 2009, the UNEG
transmitted a total of 13,628.309 mln kWh of electric energy
to neighbouring countries. Total energy loss in the UNEG for
2009 was 22,120.61 mln kWh. Federal Grid Company’s 2009
revenue increased by 24% (by RUB 16.6 bln) vis-àa-vis RUB
85 bln in 2008.
One of the Company’s 2009 operating highlights was its
15.9-bln-rouble operating profit, which exceeded the 2008
operating profit three-fold by RUB 10.7 bln. We firmly believe
that these financial results strengthen the Company’s growth
platform going forward.
the Company’s 2010–2012
The key developments determining the growth prospects of
Federal Grid Company were the switch to RAB regulation of
tariffs as well as the Russian Federation Government’s approval
of
investment programme.
Jointly, these provide us with a powerful instrument for
planned development and modernisation, lowering wear-
and-tear and depreciation, and improving the reliability and
quality of electric energy transmission throughout the UNEG.
Consequently, the Company’s overall length of transmission
lines is expected to increase by 10% on the back of the
2010–2012 investment programme.
During the fiscal year, we invested significantly in the country’s
economic growth as well as in the completion of important
national projects. Facilities to supply energy for the XXII
Winter Olympic Games in Sochi in 2014 were constructed at a
quick pace. Backbone electric grid (MES) South, a Company
demonstrated by the Company in 2009 are the direct result
of their hard work, and the solid professional potential of our
entire team lets us look to the future with confidence.
We see our priorities in 2010 as providing reliable and
uninterrupted operation of the backbone electric grids, the
continued modernisation of the entire grid via technical
innovation, and the improvement of the Company’s economic
and operating efficiency. We have also set ambitious long-
term goals and priorities for 2010–2020, such as the set-up
and completion of a ‘Smart Grid’ that will significantly improve
the reliability and efficiency of the UNEG.
Oleg Budargin,
Chairman of the Management Board
branch, brought the 220-kV Poselkovaya substation on line,
with transmission lines from Psou to Poselkovaya. The MES
North-West branch continued construction on the Northern
Transit to Karelia and completed the project to supply electricity
to Valaam Island, which is an important religious centre in
Russia. MES West supplied electricity to the first stage of the
East Siberia-Pacific Ocean oil pipeline (ESPO). The 500-kV
Far East-Vladivostok transmission lines were connected with
the Vladivostok substation, providing the southern area of the
Primorsk Territory with 350 MW of additional capacity.
We continued delivering power from new generating sources:
reconstruction was completed at MES Centre, Moscow
Region, on the 500-kV outdoor switchgear at the Kashirskaya
state regional power plant (Kashirskaya GRES), with the
formation of the 500-kV Novokashirskaya substation. Work
was begun on new power units to deliver reliable electricity
supplies in the large industrial and oil-production centres of
the Urals and West Siberia. Particularly, construction was
completed on the 500-kV Emelino substation in the Sverdlovsk
Region, and the 500-kV Somkinskaya-Peresvet line was put
into service in the Khanty-Mansiisk autonomous region.
In order to improve economic efficiency and decrease
the Company’s dependence on foreign manufacturers of
electricity equipment and facilities, we have begun establishing
innovation centres to produce such equipment in Russia’s
regions. To this end, the Company has signed cooperation
agreements with 65 leading domestic manufacturers of
electricity facilities in Siberia, Urals, Volga, North-West and
Centre regions of Russia.
As an electric energy company, we were put to a serious
test last year as a result of the tragic accident that occurred
at the Sayano-Shushenskaya hydro-electric power plant
(HPP). The Russian government required Federal Grid
Company to re-route power from other regions at the same
time as the autumn-winter peak-demand period of power
transmission in Siberia. In order to fulfill this task, we built the
220-kV Beya-Askiz transmission lines in short order and put
into operation capacitor banks at the 500-kV Oznachennoe
and Alyuminievaya substations in the Republic of Khakassia.
Additionally, we organised the operation of mobile quick-
response teams and provided for enhanced emergency
supplies. A mobile gas-turbine electric power plant was set
up in Kyzyl. Consequently, the autumn-winter period was a
resounding success.
I thank all the employees of Federal Grid Company for their
highly professional and single-minded effort. The results
10
Federal Grid Company Annual Report 2009
11
Federal Grid Company Annual Report 2009
KEY
DEVELOPMENTS
IN 2009
2
25.12.2009
Completion of additional share placement
The actual number of placed securities is 80,047,137,190
ordinary shares with a nominal value of 50 kopecks per
share.
28.12.2009
Increase in voltage class from 220 kV to 500 kV
in the south of the Primorsky region
The new 500-kV Vladivostok substation and 500-kV Far East-
Vladivostok (Primorsky region) transmission lines were put
into operation.
KEY
DEVELOPMENTS
IN 2009
12.02.2009
Federal Grid Company shares included
in the MSCI Russia and MSCI Emerging
Markets indices
On 11.02.2009, MSCI Barra – a leading provider of investment
decision support tools, as well as securities markets indices –
included Federal Grid Company’s shares in the MSCI Russia
and MSCI Emerging Markets indices. Correspondingly, the
Company’s shares comprise 0.8036% of MSCI Russia and
0.045% of MSCI Emerging Markets. This event demonstrates
the international investment community’s recognition of the
Company, thus ensuring an increase in its attractiveness for
many foreign institutional investors.
03.04.2009
Construction completed on the 220-kV
Poselkovaya substation to supply electricity for
the 2014 Winter Olympic Games in Sochi, Russia
Federal Grid Company continues preparations for the Sochi
2014 Winter Games. The new substation is intended to supply
electricity to the Krasnaya Polyana resort village, which is
set to be the main venue for the Games. Specifically, the
substation will provide electricity to the skiing, sledding and
bobsled facilities, as well as the mountaintop Olympic village,
the cross-country (Nordic) skiing trail, and the Krasnaya
Polyana complex.
30.04.2009
Construction completed on the 500-kV Emelino
substation with overhead transmission lines of
500 and 220 kV
The 500-kV Emelino substation became the most vital source
providing electric energy to the short-supply Ekaterinburg-
Pervouralsk power district in the Sverdlovsk Region. Putting
the substation in service assisted in expanding electric-
furnace steelmaking production at the Pervouralsk new-
pipe and Nizhneserginsky metallurgical plants, as well
as increasing power at the Revdinsky metallurgical and
Sredneuralsk copper-smelting plants. The new power facility
met the requirements of these metallurgical companies,
which, in line with their growth, will be 400 MW. Additionally,
the Emelino substation has helped reduce the burden on the
500-kV Yuzhny substation, which is Yekaterinburg’s main one
and is currently working at full capacity.
22.08.2009
The 500-kV Sayano-Shushenskaya HPP
outdoor switchgear put into operation
Federal Grid Company signed an agreement with RusHydro on
putting the Company’s 500-kV Sayano-Shushenskaya hydro-
electric power plant (HPP) outdoor switchgear into operation.
15.09.2009
Government approves the Company’s 2010–
2012 investment programme
The investment programme for 2010–2012 is RUB 519.4 bln
and will be financed from the Company’s own funds, the federal
budget and the sale of RAO Unified Energy System of Russia
(RAO UES of Russia) shares. Funds will also be earmarked from
payment for technological connection, debt and borrowing.
16.10.2009
Construction begins on the transmission line
to supply electricity to the East Siberia-Pacific
Ocean oil pipeline
Federal Grid Company installed the first 100 towers for the
220-kV Neryungrinskaya-Nizhny Kuranakh (Sakha Republic,
Yakutia) transmission lines. Construction was carried out as
part of the second section of the 275-km transmission line.
The new line is slated for activation in October 2010 and
will improve the supply of electricity to consumers in the
Neryungrinsk and Aldansky regions in Yakutsk, including
the republic’s large gold mining companies, and will supply
electricity to the oil pumping station under construction for
the East Siberia-Pacific Ocean oil pipeline. Total investment
in the construction is RUB 4.8 bln.
19.10.2009
Agreements signed with a number of domestic
producers and developers of electricity
equipment
This was an important step in the Company’s innovation.
Cooperation agreements were signed with CPEL, Sevkabel
Holding, Positron, Energomekh, Streamer Electric Inc.,
Elektroapparat, Electronmash System Solutions, Newelectro,
and NFenergo.
27.10.2009
New Chairman of the Management Board
elected
Mr Oleg Budargin was elected as the Chairman of the
Management Board of Federal Grid Company at the
Extraordinary General Shareholders Meeting.
05.11.2009
Federal Financial Markets Service (FFMS)
registers the Company’s 50-bln-rouble bond
issue
The Board of Directors approved the decision for the bond
offering on 21.09.2009. The funds generated from the offering
will be earmarked to finance the Company’s large-scale
investment programme.
16.12.2009
Major reconstruction completed on the 500-kV
Klyuchiki substation in the Ulyanovsk Region
The substation transmits power between the Volga, Centre
and Urals interconnected power systems (IPS). Even
though the capacity of the substation backbone remained
the same, reliability of delivery to Mid-Volga consumers was
substantially improved, and the transmission connection
with the electric energy systems of Russia’s central
regions and the Urals was solidified. Total investment in the
reconstruction was RUB 3 bln.
22.12.2009
New transmission line in the Republic of
Khakassia put into operation
The new line became indispensable because of the intensely
concentrated increased use of available power in Khakassia,
following the tragic accident at the Sayano-Shushenskaya
HPP. Putting the new transmission line into operation
significantly reduced the risk of having to limit the use of
electricity of the 850,000 people living in the republics of
Khakassia and Tyva.
22.12.2009
Federal Tariff Service (FTS) approves the
conditions of the Company’s switch to RAB
regulation of tariffs for 2010–2012
RAB tariffs guarantee investors a return on investment, and
also intertwine service reliability and quality with the tariff level
for consumers.
25.12.2009
Russia’s first superconducting transmission
line successfully tested
The superconducting transmission line is a prospective and
innovative technology that improves the quality and reliability
of the electricity supply.
14
Federal Grid Company Annual Report 2009
Key Developments in 2009
15
Federal Grid Company Annual Report 2009
Key Developments in 2009
ABOUT
THE COMPANY
_ Our Business
_ Strategic Priorities
_ Structure
_ Key Performance Indicators
_ Key Financial Indicators
3
ABOUT THE COMPANY
Unified National Electric Grid
(UNEG):
In accordance with Federal
Law No. 35-FL, titled On the
Electric Energy Industry, dated
26.03.2006, the UNEG comprises
a network of electricity grids and
other electricity-grid facilities;
belonging to electric energy
engineering units on the basis of
ownership rights, or on the basis
of other rights, as stipulated by
federal law; and providing for the
constant supply of electric energy
to consumers, a functioning
wholesale market, as well as the
simultaneous operation of Russia’s
electric energy system and
electric energy systems of foreign
countries.
under the management of Federal Grid Company were
being consolidated. During the reorganisation of the parent
company, RAO UES of Russia, 56 transmission companies
(TC) were created from the units of the national electric
grid. The TC shares owned by RAO UES of Russia were
transferred to pay for an additional issue of Federal Grid
Company shares.
The reorganisation of RAO UES of Russia was completed in
2008, when 54 of the 56 TC were integrated in Federal Grid
Company, with the other two TC remaining subsidiaries of the
Company. As a result, 470,000 former shareholders in RAO
UES of Russia and the TC became shareholders in Federal
Grid Company.
RAO Unified Energy System of Russia (RAO UES of Russia)
were included in the Board of Directors.
When the Company was founded, RAO UES of Russia, which
was then a monopoly on the Russian generation and electric
energy transmission market, owned 100% of its shares.
Considering Federal Grid Company’s keystone position in
the sector, the government’s participation in the Company’s
charter capital was legislatively set at a minimum of 75% + 1
voting share.
From 2007 through 2009, the Russian Federation benefited
from additional share issues of Federal Grid Company, using
funds from the federal budget to purchase the shares. In turn,
the Company used the funds received from the budget to
finance the investment programme and complete federal
target programmes. At this time, the government’s share in
Federal Grid Company’s charter capital is 79.11%.
While restructuring measures in the electric energy industry
were being carried out, electric grid units in the UNEG
RESTRUCTURING OF THE ELECTRIC ENERGY SECTOR IN RUSSIA
2001 as part of restructuring the electric energy sector, which
stipulated the division of the industry into natural monopolies
(transmission and distribution of electric energy, dispatching)
and competitive enterprises (production and sale of electric
energy, repair and service). This was done in order to
improve electric energy company efficiency and seek private
investment to develop the sector more fully.
Federal Grid Company was registered by the government in
June 2002 and was granted the management of assets to
transmit electric energy throughout the country in the form
of backbone transmission grids that today unify the country’s
main electric power plants and load nodes and transmit
electricity between them and are also connected to the
electric energy transmission systems of other countries. Given
the Company’s leading role in restructuring Russia’s electric
energy industry, representatives from the government and
As early as the 1980s,
it was clear that the
country’s electric
energy industry was
stagnating. Production
capacity was upgraded
noticeably more slowly
than the demand for
electric energy rose.
Moreover, while demand
for electric energy
decreased substantially
in the 1990s, capacity
upgrades came to a
virtual halt. According to
technology indicators,
Russian electric
companies lagged their
peers in developed
countries, and there
was a lack of incentive
to improve operating
efficiency and follow
an intelligent plan of
production and electric
energy usage. Blackouts
became a regular
occurrence in a number
of regions, while the
absence of payment
discipline placed the
very possibility of
electric companies being
able to function properly
into question. The sector
was not transparent from
a financial or information
point of view, while
entry was closed to new
market players.
Consequently, it
was paramount to
restructure the electric
energy industry. Sector
restructuring provided
the incentive to improve
the efficiency of electric
companies and also
created the conditions
for development. The
structure of the industry
changed: natural
monopoly functions,
such as transmission
and dispatching, were
isolated from potentially
competitive ones, such
as the production and
sale of electricity. As
a result, companies
concentrating in
individual types of
operation were created
to replace the previous
vertically integrated
companies that had
fulfilled all these
functions at the same
time.
While conditions were
created to develop a
competitive electric
energy market, with
prices based on supply
and demand and players
who were interested in
improving efficiency,
the prerequisites
were also created in
the natural monopoly
sphere for infrastructure
development and
upgrades via effective
government regulation
and disclosure for
outside investors.
3–1. OUR BUSINESS
Federal Grid Company transmits electric energy throughout
the UNEG.
Federal Grid Company is a natural monopoly operating in
Russia. This means that the Company owns and operates
an infrastructure that is impossible for other organisations to
duplicate. Providing the service of electricity transmission is
entrusted to Federal Grid Company at the legislative level, and,
as a monopoly, the Company is regulated by the government.
The Company is one of the main pillars of infrastructure in the
Russian economy. Consequently, its business activity directly
influences the economic growth potential of the country.
The Company transmits electric energy to consumers via
a unified grid, and also connects the power receivers of
consumers to the UNEG. The main consumers of Federal Grid
Company’s services are distribution companies, energy-sales
organisations, as well as large industrial companies.
The number of consumers using the unified-grid transmission
services of Federal Grid Company increases with each
year. As of December 2009, there are 121 companies
connected to the UNEG. In order to increase this figure, the
Company is concentrating on the technological connection
of new consumers to the grid, resulting in 54 contracts being
completed in 2009.
Background
Federal Grid Company was founded as per the decision of
the government of the Russian Federation in the summer of
18
Federal Grid Company Annual Report 2009
About the Company
19
Federal Grid Company Annual Report 2009
About the Company
3–2. STRATEGIC PRIORITIES
We are striving to improve our contribution to the development
of Russia’s economy and to become one of the main drivers
in the modernisation of the country’s infrastructure. Our three
strategic priorities are integral to one another and are aimed
at fulfilling our stated goals.
3–3. STRUCTURE
The General Shareholders Meeting
the supreme
management body of Federal Grid Company. The Board
of Directors gives the Company strategic direction and
oversees the functions of the Management Board, which, in
turn, is entrusted with operating the Company.
is
Federal Grid Company Organisational Structure:
GENERAL SHAREHOLDERS MEETING
BOARD OF DIRECTORS
MANAGEMENT BOARD
FEDERAL GRID COMPANY REGIONAL BRANCHES - BACKBONE ELECTRIC GRIDS (MES)
Reliability
Federal Grid Company’s fundamental importance to the
Russian economy determines our main strategic priority, which
is to transmit electric energy reliably throughout the entire
country. Our technical policy complements the government’s
technical regulation, and it guarantees the use of a technical
solution to deliver a reliable and efficient electricity supply.
Our large-scale investment programme is aimed squarely
at further improvement in reliability. Consequently, we are
instituting a unified technical policy both within Federal Grid
Company and at all of the national electric grid units, which is
the main component in dependable electric transmission.
Modernisation and Innovation
The condition of the UNEG has a direct effect on the rate of
economic development in Russia. Therefore, we are bringing
the electric grid in line with a new technological level by
modernising obsolete facilities and through innovation. The
creation of smart grids – efficient and blackout-proof, steadfast
to hazardous natural phenomena and economically sound in
use – is our most important strategic goal.
that
the Company will meet
Operating Efficiency
The financial standing and steady growth of Federal Grid
Company guarantee
the
expectations of its shareholders, investors, partners and
employees. The size of the Company and its position as a
monopoly provide it with a number of advantages, such as
financial stability and the ability to manage risks effectively.
Our strategic priority is to continue using these advantages to
improve operating efficiency.
Federal Grid Company comprises 44 regional branches.
MES
Centre
MES
North-West
MES
Volga
MES
South
MES
Urals
MES
West Siberia
MES
Siberia
MES
East
Federal Grid Company regional branches - subsidiaries of backbone electric grids (PMES)
Valdaiskoe
Bryanskoe
Lower Volga
Kaspiiskoe
Permskoe
Zabaikalskoe
Amurskoe
Upper Don
Vyborgskoe
Mid-Volga
Kubanskoe
Sverdlovskoe
West Siberia
Primorskoe
Volga-Don
Karelskoe
Rostovskoe
South Urals
Krasnoyarskoe
Khabarovskoe
Volga-Okskoe
Leningradskoe
Stavropolskoe
Auto-transport
Kuzbasskoe
enterprise MES
Urals
Omskoe
Tomskoe
Khakasskoye
Vologodskoe
Novgorodskoe
Moscow
Auto-transport
enterprise MES
Nizhegorodskoe
North-West
Priokskoe
Chernozemnoe
Special purpose
production centre
Bely Rast
In addition, as on 31.12.2009, the Company has 31
subsidiaries and branches operating in various areas,
including the operation of electric energy supply units. Two of
these subsidiaries are MES Tomsk and MES Kuban.
20
Federal Grid Company Annual Report 2009
About the Company
21
Federal Grid Company Annual Report 2009
About the Company
Subsidiaries:
SUBSIDIARIES AND BRANCHES PERFORMING VARIOUS TYPES OF ACTIVITY,
INCLUDING THE OPERATION OF ELECTRIC ENERGY SUPPLY UNITS OF FEDERAL GRID COMPANY (SHARE IN THE CHARTER CAPITAL)
3–4. KEY PERFORMANCE INDICATORS
Number of substations
2009 _ _ 761
2008 _ _ 758
2007 _ _ 150
Scientific and Technical Centre of Electric Power
Centre of Energy
IT Energy Service
Transformer capacity (MVA)
Industry (S&T Elektroenergetika)
100%
Energy Forecasting Agency (APBE)
100%
Verificatory Centre of Electronic Digital Signatures
for Energy (UC Energetika)
100%
Elektrosetservice UNEG
100%
98.56%
Nurenergo
77%
MES Tomsk
52.025 %
39.99%
ENIN
38.24%
Urals Energy Management Company (UEUK)
33.33%
GruzRosenergo IPS
Volga Territorial Generation Company (TGC-7)
50%
GVC Energetiki
50%
32.18%
TGC-11
27.45%
TGC-6
23.58%
Bashkirenergo
21.27%
Moscow Communication Centre of Electric Power
Mid-Volga Interregional Management Company
Industry (MUS Energetika)
100%
Glavsetservice UNEG
100%
Energostroisnabkomplekt UES
100%
Engineering and Construction Management Centre
of Unified Energy System (CIUS EES)
for Energy (SMUEK)
50%
Severovostokenergo
49%
Energotechkomlekt
49%
MES Kuban
48.99%
100%
Schekinskie PGU (steam gas units)
Mobile GTES (gas turbine electric power plant)
100%
Central Scientific Research Institute NPKenergo
45.21%
WGC-1
40.17%
(NPKenergo)
100%
Volgaenergosnabkomplekt
100%
Index of Energy-FGC UES
100%
Chitatekhenergo
100%
2009 _ _ 298,457.6
2008 _ _ 286,184.7
2007 _ _ 139,330
Total length of electric energy transmission lines
(thousand kilometres)
2009 _ _ 118
2008 _ _ 118
2007 _ _ 47
Electric energy output from the UNEG to the distribution
companies, direct consumers on the WECM and
independent energoes (mln kWh)
2009 _ _ 452,662.2
2008 _ _ 471,985.1
2007 _ _ 464,045.5
In 2009, the calculation of substation transformer capacity
factors in the capacity for auxiliary power requirements.
Electric energy output throughout the UNEG to
neighbouring countries (mln kWh)
2009 _ _ 13,628.3
2008 _ _ 16,704.8
2007 _ _ 11,345.2
Total real electric energy loss (mln kWh)
2009 _ _ 22,120.6
2008 _ _ 21,865.7
2007 _ _ 21,401.1
Customer contract demand (MW)
2009 _ _ 94,636
2008 _ _ 90,042
2007 _ _ 87,731
22
Federal Grid Company Annual Report 2009
About the Company
23
Federal Grid Company Annual Report 2009
About the Company
3–5. KEY FINANCIAL INDICATORS
Revenue from operating activities (RUB mln)
Net profit /(loss) for the period (RUB mln)
2009 _ _ 85,078
2008 _ _ 68,485
2007 _ _ 61,385
2009 _ _-59,866
2008 _ _ 4,465
2007 _ _ 2,296
EBITDA* (RUB mln)
Net asset value (RUB mln)
2009 _ _ 40,379*
2008 _ _ 32,718*
2007 _ _ 22,742
2009 _ _ 579,746
2008 _ _ 666,471
2007 _ _ 204,786
EBIT* (RUB mln)
Debt and borrowing (RUB mln)
2009 _ _ 16,962*
2008 _ _ 11,869*
2007 _ _ 6,592
2009 _ _ 13,000
2008 _ _ 32,980
2007 _ _ 30,000
Profit/(loss) before taxation (RUB mln)
Market capitalisation (RUB mln)
2009 _ _-54,049
2008 _ _ 6,177
2007 _ _ 3,900
2009 _ _ 367,971
2008 _ _ 141,882
2007 _ _ –
EBITDA and EBIT
EBITDA and EBIT grew steadily for the calculated period.
The main factors were an increase in profit before taxation
(without taking external factors into consideration) and an
increase in the amortisation expense because of a capacity
injection on the back of fulfilling the Company’s investment
programme.
Net asset value (NAV)
Net asset value dipped by RUB 86,725.2 mln vis-àa-vis 2008
due to depreciation in the value of the financial investments,
leading to a net loss in 2009. In addition, the changes in the
accounting policy of Federal Grid Company when calculating
the creation of provisions for doubtful advance accounts and
other debt caused the reduction in net assets.
Financial Performance Indicators
Revenue from electricity transmission services
revenue grew during 2007–2009.
The Company’s
Specifically, revenue for electric energy transmission for the
past year increased by 21.2% versus 2008, to RUB 14,044.5
mln. According to 2009 results, revenue for electric energy
transmission was 94.2% of the total revenue. The main
factors contributing to revenue growth were an increase
in production capacity on the back of completing the RAO
UES of Russia restructuring and the transfer of shares to the
Company’s balance sheet, as well as a rise in the volume of
grid service and tariff increases.
Profit/(loss) before taxation and net profit/(loss)
According 2009 operating results, the Company had a net
loss of RUB 59,866 mln, resulting from the following factors:
> Write-off of the negative difference resulting from the
re-evaluation of the Company’s financial investments
in securities at market value. As on 31.12.2009, the
Company’s balance sheet included investments in
shares quoted on the market during 2009. As on
31.12.2009, financial investments are entered in the
balance sheet according to market quotes on the
indicated date. The amount of the loss because of the
change in current market value was RUB 79,905.9 mln.
> Loss of RUB 7,017 mln owing to the sale of financial
investments (sale of TGC-12 shares).
> Creation of provisions of RUB 3,502.6 mln in the event of a
decrease in the value of financial investments.
* In order to calculate this figure, external factors are not taken into consideration in terms of the responsibilities of the Company management (revaluation of
financial investments, creation of provisions for doubtful debts).
24
Federal Grid Company Annual Report 2009
About the Company
25
Federal Grid Company Annual Report 2009
About the Company
BUSINESS
OVERVIEW
_ Production
_ Innovation
_ Investments
_ Commercial and Operating Activity
4
BUSINESS
OVERVIEW
4–1. PRODUCTION
Delivering a Dependable Supply of Electricity
Federal Grid Company’s main strategic priority is to deliver
a reliable electricity supply. As part of the backbone of the
Russian economy, the Company has to perform this weighty
responsibility successfully for the entire country, from large
companies to individuals. Consumers must be assured
that they will receive electricity via the backbone grid at full
capacity and that they will be able to fulfill their own obligations
to partners. Consequently, the Company’s technical policy
and efficient process management deliver reliable electric
energy transmission.
Technical Policy
Federal Grid Company’s technical policy stipulates that
electricity transmission has to be delivered reliably year-
round throughout the entire UNEG. The main goals of the
Company’s technical policy are the following:
> develop the electric connections of the UNEG to provide
stable concurrent operation in all the main UES of
Russia service areas and to integrate them with other
interconnected electric systems in Europe and Asia;
> deliver capacity from electric energy stations to the grid
and create equal opportunities for wholesale market
players to connect to the electric grid;
> create grid and technological infrastructure to allow for
the efficient operation of a competitive electric energy
market in Russia and to provide for integration in the
international electric energy markets;
> improve the reliability and manageability of the UNEG
by using new, highly efficient equipment and technology
during both new construction and re-equipment and
reconstruction of the electric grid units;
> develop information and telecommunication
platforms and centralised process management
of the electric grids;
> improve the operating efficiency of the UNEG via proven
optimization of the main electric grid connections and
reduce the occupied territory, operating costs, and
auxiliary power requirements;
> automate the UNEG substations; and implement and
develop the latest troubleshooting and monitoring
systems for technological equipment, relay protection
and emergency control systems (RPEC), engineering
systems, and commercial and technical metering of
electric energy;
> refine operating technology as well as maintenance
and servicing;
> minimise the effects of new construction, reconstruction,
operation and repair of the UNEG units on the
environment.
Provision on Technical Policy
The Federal Grid Company’s Provision on Technical Policy
governs the Company in this area. Indeed, this document
determines the total technical requirements that supplement
the current regulatory documents, emphasising the very
latest technical solutions, as well as providing a list and scope
to apply one or the other technical solution, equipment and
technology.
The current Provision was prepared in accordance with the
instruction of the Management Board of RAO UES of Russia
Automatic Control Systems
(ACS)
Automation of the UNEG
substations is one of the main
focuses of Federal Grid Company’s
technical policy. The Technological
Process ACS provides a unified
system of measurements and
registration of technological
parameters, as well as controls
transfers remotely and monitors
and performs troubleshooting on
the equipment.
Consequently, it is much simpler
to monitor the condition of the
grid connections in real time
and for operating personnel to
take decisions. Installation of
the automatic system improves
productivity and reduces the
number of personnel. In addition,
the system lowers the likelihood of
damage resulting from personnel
error. Additionally, the automatic
system performs required
maintenance and servicing based
on the technical condition of the
equipment rather than according to
a schedule.
Relay protection and control
equipment (RPCE) –
The RPCE technical policy is
aimed at the stable operation of the
UNEG. RPCE lessens the effects
of damage to the grid equipment
and damage to the electric grid
system during emergencies. RPCE
systems remain in full working
order and worn-out and obsolete
ones are replaced. RPCE systems
are installed at all new units.
in 2005. The document is updated on a regular basis and is
directly linked to the results of scientific research in the area
of electric energy. The Provision is valid until 2012, and is
slated for amending in November 2010.
In addition to Federal Grid Company and its branches,
the following organisations are obligated to adhere to the
requirements of the Provision:
> R&D, engineering, maintenance and servicing,
construction and mounting and testing organisations
working at the UNEG units;
> Generation companies, industrial enterprises, R&D and
engineering institutes, and maintenance and servicing,
construction and mounting and testing organisations
working at the electric stations and substation distribution
facilities of consumers connected to the UNEG.
The Company’s technical policy is applied to new construction
projects, reconstruction and technical upgrading of existing
units, installation of new technology, as well as when rendering
scientific and technical services and regulatory and technical
support. The Coordinating Scientific and Technical Board of
Federal Grid Company oversees the technical policy and
provides recommendations. In order to improve reliability and
efficient operation of the UNEG units, the Company forms a
comprehensive research and technical programme for the
following year by October of the current year at the latest.
Technical Monitoring of the Condition of Electric Grid Units
Federal Grid Company has created a functioning internal
monitoring system (IMS), which oversees organisational
and technical, informational and procedural, monitoring and
preventative operations at the Company’s branches and
the UNEG units in order to improve the operating efficiency
of the equipment, develop personnel, as well as decrease
emergencies and the probability of fire and injury.
The multi-level IMS clearly defines and delineates functions
and responsibilities at the various levels of technical
monitoring, and in 2009 was organised as follows:
1. Technical Monitoring and Audit Department of Federal Grid Company
The uppermost echelon of the ITMS which oversees the technical and functional
management of all levels of the system. The Department manages the process
to develop measures to improve the efficiency and quality of electric power
transmission, as well as increase the dependability of the supply of electricity to
consumers of the UNEG. The Department also carries out planned and special audits
of the Company’s branches as part of administrative audits.
2. Subdivisions of the Federal Grid Company branches technical
inspection – MES
3. Structural subdivisions for occupational safety and reliability at the
branches and subsidiaries of Federal Grid Company
28
Federal Grid Company Annual Report 2009
Business Overview
29
Federal Grid Company Annual Report 2009
Business Overview
either on a regular or specific (target) basis.
Regular troubleshooting encompasses testing and measuring
in accordance with the current regulatory documentation.
Specific (target) troubleshooting is conducted to assess
the technical condition of the electric grid equipment not
encompassed in regular troubleshooting and to specify
the level and nature of defects discovered during regular
troubleshooting.
Regular Troubleshooting in 2009
Substation equipment troubleshooting in 2009 was performed
as follows:
> Autotransformers (AT);
and power transformers: 2,990 units
> Shunt reactors: 457 units;
> High-voltage circuit breakers: 4,184 units;
> Current transformers: 3,759 units;
> Voltage transformers: 3,111 units.
According to the data, the technical condition of equipment
following troubleshooting work in 2009 breaks down as
follows:
4. Production supervision
Continuous monitoring of personnel in the production structural subdivisions of
MES, PMES and subsidiaries and affiliates of the line (party responsible for the
direct management of the immediate fulfillment of a type of activity) or functional
(‘central service’) management
5. Production self-monitoring
The basic level of ITMS which the individual employees fulfill during the course of
their job responsibilities.
In 2009, a number of measures were taken to improve the
efficiency of the IMS. Foremost, a procedural and functional
management body was organised at the branches and
subsidiaries of Federal Grid Company. The current regulatory
documents on system management were reviewed with an eye
to the structural changes that have occurred in the Company,
while new regulatory documents were developed. Additionally,
informational and analytical system functional requirements
(IMS Information Field) and a multi-level efficiency assessment
system were developed.
in 2009,
The Technical Monitoring and Audit Department conducted
including comprehensive
all planned events
technical audits of the Company’s branches; a targeted
audit of organisations that are bringing transmission lines
up to standard at a number of branches (MES Volga, MES
East, MES Urals); as well as an environmental audit of MES
East, which was conducted in conjunction with the Technical
Regulation and Environment Directorate. As a result of the
audits, system fluctuations from specified requirements and
typical risks were identified, which, in turn, led to developing
recommendations to improve the operating reliability of the
UNEG units and to minimise risks.
Electric Grid Equipment Troubleshooting
In order to improve the energy safety and energy efficiency of
the UNEG (by order of the Russian Federation Government),
Federal Grid Company in October 2009 organised the Monitoring
of Grid Technical Status and Troubleshooting Directorate.
The Directorate’s main function is to create a unified
policy on organising, monitoring, fulfilling and improving
the troubleshooting system of the Company’s electric grid
equipment. Consequently, a working group was formed as
part of the Directorate to develop a troubleshooting system.
The working group includes dedicated experts, directors
from the troubleshooting departments of the branches, and
representatives from the Company’s scientific and technical
bodies.
troubleshooting encompasses monitoring
Technical
the
working capacity and efficiency of an object by spot testing,
measuring, inspecting and anticipating problems. Technical
troubleshooting of the electric grid equipment is performed
Technical condition
of circuit breakers, %
74.2
8.1
0.5
17.2
Normal
Operational
Deteriorated
Breakdown point
Technical condition of power transformers
(autotransformers), %
Technical condition
of current transformers, %
75.2
16.9
74.8
7.7
0.2
Deteriorated
Breakdown point
Normal
Operational
Technical condition
of shunt reactors, %
8.4
0.1
16.7
Normal
Operational
Deteriorated
Breakdown point
Technical condition
of voltage transformers, %
61.6
23.7
79.3
14.2
0.5
9.4
0.1
11.3
Normal
Operational
Deteriorated
Breakdown point
Normal
Operational
Deteriorated
Breakdown point
30
Federal Grid Company Annual Report 2009
Business Overview
31
Federal Grid Company Annual Report 2009
Business Overview
Special Troubleshooting Programmes in 2009
target
programmes
Federal Grid Company has developed and implemented
specific
comprehensive
troubleshooting to assess the technical condition of electric
grid equipment not encompassed in regular troubleshooting,
as well as to specify the level and nature of defects
discovered during regular troubleshooting.
for
Electric grid overhead transmission line special troubleshooting programme
As of today, the programme is virtually the only tool for
troubleshooting overhead transmission lines, identifying the
start of defects (hidden from view) and providing data for
evaluation in the government monitoring bodies.
The programme is aimed at compiling complete and
qualitative information on the condition of the most important
parts of overhead transmission line towers in order to take
measures to thwart damage to the transmission lines.
Information on the condition of
tower parts and
recommendations allow for timely decisions to be taken
on exact repairs to the tower parts or the comprehensive
reconstruction of the overhead transmission lines based on
their actual condition.
the
In 2009, comprehensive inspections were carried out on
10,942 towers at overhead transmission lines, including 7,322
towers at MES South and 3,620 towers at MES Volga.
In 2009, 7,237 overhead transmission line parts were fixed as
part of the programme, including 4,051 at MES West Siberia,
1,309 at MES Siberia, and 1,877 at MES Urals.
> At MES West Siberia, 310 defective parts were identified,
and 310 parts are slated for repair in 2010–2011.
> At MES Siberia, 495 defective parts were identified, and
435 are slated for repair in 2010, and 60 are slated for
repair in 2011.
> At MES Urals, 237 defective parts were identified, and
124 are slated for repair in 2010, and 113 are slated for
repair in 2011.
Comprehensive inspection programme
for substation grounding
The main goals of the grounding systems are:
> protect electric energy equipment from thunder storms;
> protect electric energy equipment from short-circuit
currents;
> protect substation personnel (electricity safety) from
contact voltage;
> protect dispatch and process management systems
(including RPEC, automated revenue-metering system
(ARMS), automated process-management system
(APMS), the Technological Process ACS).
Regular grounding troubleshooting can not fulfill any of
the goals or bring grounding into standard condition, thus
requiring a specific target programme.
> 247 defective parts have been discovered at MES South,
with 52 parts slated for repair in 2010 and 195 parts in
2011;
> 86 defective parts have been discovered at MES Volga,
with 66 parts repaired in 2009 and 20 slated for repair in
2010.
In 2009, comprehensive inspections were completed on 189
substations, including MES Siberia (72); MES Volga (50);
MES North-West (38); MES South (24); and MES Centre
(5). Repairs are planned on the grounding systems of the
inspected substations as follows:
Top-priority special troubleshooting programme
for overhead transmission line parts
The troubleshooting programme is carried out on the following
overhead transmission lines:
> lines located in hard-to-reach areas, including low
> MES Siberia: 100% (72 substations) slated for 2010;
> MES Volga: 8% (4 substations) slated for 2010; 92%
(46 substations) slated for 2011–2012;
> MES North-West: 34.2% (13 substations) slated for 2010;
65.8% (25 substations) slated for 2011;
temperatures (permafrost);
> MES South: 8.3% (2 substations) slated for 2010; 91.7%
> lines with the largest number of technological
breakdowns during the year;
> backbone lines;
> lines supplying large consumers;
> lines involved in export transmission.
(22 substations) slated for 2011;
> MES Centre: 100% slated for 2010.
to
is designed
in connection due
technological
The programme
breakdowns
the unsatisfactory
condition of the overhead transmission line nodes, including
falling transmission towers, thereby improving the operating
reliability of the UNEG.
repair
to
Special troubleshooting programme
for equipment or units in the worst condition
The special troubleshooting programme for equipment in the
worst condition is implemented with the following goals:
> lower substation equipment breakdown because
of overhead transmission line nodes by conducting
standard routine inspections as well as following
manufacturer recommendations and the instructions of
the regulating bodies;
> improve equipment operating reliability by conducting
timely target inspections with a subsequent return to the
nominal operating parameters;
> improve the reliability of the consumer electricity supply
by providing an equipment operation breakdown
warning.
The units in the inspection programme are the most capital-
intensive types of equipment, for example, power, switching,
measuring and protective equipment.
In 2009, special troubleshooting was conducted as follows:
> power equipment: 192 units;
> switching equipment: 1,392 units;
> measuring equipment: 69 units;
> overhead transmission line towers: 929 units.
Efficient Process Management
The main goal of Federal Grid Company’s efficient process
management is to fulfill our obligations of delivering electric
energy to the market by adhering to the requirements of
delivery quality and reliability, and to minimise losses when
transmitting electric energy via the UNEG. The Company’s
efficient process management is built on a hierarchical
approach, with a concise allotment of equipment as per levels
of efficient implementation.
following goals are part of efficient process
The
management:
> provide for the dependable operation of the UNEG units
and fulfill the process schedule specified by the System
Operator dispatch centres;
> provide adequate quality and safety during operation of
the UNEG units;
> create a single training system for the operating
personnel;
> minimise the number of technological breakdowns due
to personnel errors;
> participate in the development and implementation of the
UNEG development programme in conjunction with the
System Operator dispatch centres;
> plan measures for repairing, activating, modernising/
reconstructing and maintaining equipment;
The Company assesses the overall amount of troubleshooting
in 2009 to be adequate. In order to improve the troubleshooting
efficiency of electric grid equipment in 2010, the following
measures are planned:
> inventory and complete troubleshooting means for
> develop a timetable for emergency restrictions on
electric energy usage and the implementation of
emergency restriction by order of the System Operator
dispatch centre;
> connect the consumer grid and power receiver units to
proper and timely completion of preventative measures
and tests;
> modify and update the standards for troubleshooting;
> improve the qualifications of the troubleshooting
personnel;
> create an internal information resource to automate the
organisation and monitoring of troubleshooting in the
Company;
the emergency control system.
These goals were completed successfully in 2009. In particular,
the efficient process management body produced the following
results:
> The number of standard violations due to exceeding the
permitted voltage level in the UNEG reduced to 3 in 2009
versus 9 in 2008 and 71 in 2007;
> delineate responsibility for the collection and updating
of information on the technical condition of equipment
based on the results of troubleshooting;
> 73 ‘bottlenecks’ placing restrictions on the regular and
maintenance and servicing schedule of the grid were
identified (71 in 2008);
> organise efficient monitoring of the troubleshooting
system operation at all levels of the Company’s
management;
> create an innovative environment for technical
troubleshooting in Federal Grid Company.
> An optimisation system was developed based on KOSMOS
drive end (DE). The system is designed to reduce the
loss of real power in the Company’s grids and minimise
the loss of electric energy by regulating the voltage and
current redistribution of reactive power in the grid;
> Lines of communication were improved between System
Operator and the personnel of Federal Grid Company;
> A PSI Control-based hardware and software package to
display the current processes to the operating personnel
was put into test use in the North-West Grid Control
Centre;
32
Federal Grid Company Annual Report 2009
Business Overview
33
Federal Grid Company Annual Report 2009
Business Overview
> An UNEG efficient process management concept was
Technical Refitting and Reconstruction Prospects
developed and approved;
> A grid transfer capacity was expanded at MES South
and MES West Siberia by specifying the maximum
allowable current load of the overhead transmission lines
depending on weather conditions;
> Training seminars titled Emergency Control and
Emergency Control System were held for the personnel
at the UNEG grid management centres.
Federal Grid Company is designing and implementing
new-generation substations (at the end of 2009, the figure
was 5.1% of all Federal Grid Company substations), which
use modern automated equipment-management systems,
allowing for efficient servicing of the substations without
requiring personnel to be on constant duty.
the
the new systems enables
transfer of
Introducing
substation efficient-servicing functions to the personnel at the
grid management centres working at each of the Company’s
branches. Additionally, the transfer will reduce service
costs, shorten the time required to eliminate technological
breakdowns, and allow for a situation analysis at the unit and
in the grid adjacent to the substation simultaneously.
In 2010, as part of implementing the UNEG efficient process
management concept, the operating functions of Kuzbasskoe
grid management centre and MES Priokskoe subsidiary are
slated for approval.
Also in 2010, the North-West grid management centre’s Expert
and Analytical System is slated for commercial operation. The
system will permit a wide range of calculation and analytical
tasks to be completed.
The renovation programme for the UNEG for 2010–2014
includes plans to reconstruct units fully, replace individual
parts of equipment, make target investment and compile an
emergency reserve.
Unreliable, obsolete and inefficient equipment will be replaced
with modern technology as part of the programme. Other plans
include increasing grid transfer capacity, lowering the effect
of electric energy installations on the environment, as well as
optimising expenditures and improving the quality of technical
servicing. The 2010–2014 renovation programme calls for the
full reconstruction of 180 units, including 163 substations and 17
transmission lines. Additionally, there will be an overall increase
in capacity to 38,885 megavolt-amperes (MVA) by 2014 (an
increase in transformer capacity to 5,389 MVA), and an increase
in the comprehensive reconstruction of transmission lines,
around 800 km.
The 2010–2014 renovation programme also envisages
the installation of reactive power sources with aggregate
capacity of more than 1,600 megavolt-amperes reactive
(MVAR). The objective increase in the reactive capacity
throughout the UNEG will be more than 1,100 MVAR (taking
into consideration the deactivation of a number of current
reactive power sources of 500 MVAR, while the UNEG units
are being reconstructed).
The following units and their capacity are slated for the
completion of comprehensive reconstruction in 2010:
> 500-kV Lipetsk substation (MES Centre);
> 500-kV Zlatoust substation (MES Urals);
> 220-kV Novometallurgical substation (MES Urals);
> 220-kV Vitaminkombinat substation (MES South).
renovation programme envisages
the beginning
The
of
financing projects on 36 objects (substation and
overhead transmission lines) as part of the comprehensive
reconstruction units for 2013–2016. New technology will be
used as part of the programme, including:
> implementation of multi-faceted towers and increased-
capacity lines (the 220-kV Central-Shepsi overhead
transmission lines, the 220-kV Shepsi-Dagomys
overhead transmission lines);
> installation of STATCOM (400/330-kV Vyborg substation);
> installation of controlled shunt reactors (500-kV
Magnitogorskaya substation, 500-kV Tomskaya
substation);
> implementation of switch-disconnectors at Federal Grid
Company units (220-kV Dmitrov substation).
The section on Innovation contains more detailed information
on the latest equipment and technology.
Power Transmission and Technological
Connection Services
Power Transmission Services
The transmission of electric power throughout the UNEG is
the main function of Federal Grid Company, and payment
for these services is the main source of revenue. Federal
Grid Company is a natural monopoly, and the number of the
Company’s consumers in the UNEG increases on an annual
basis. Indeed, there were 121 organisations connected to the
UNEG as of December 2009.
The number of consumers (number of organisations)
of Federal Grid Company services in 2007–2009
121
105
91
2007
2008
2009
There are four types of organisations that use the Federal
Grid Company’s energy-transmission services:
> distribution companies (DC);
> independent grid companies (IGC);
> energy sales organisations (ESO);
> large consumer enterprises of electric energy.
Results of the 2009–2010 Autumn-Winter Period
The autumn-winter period places maximum capacity load
on Russia’s electric energy system, and the harsh weather
conditions increase the risk of damage to the grid units.
Consequently, Federal Grid Company pays particular
attention to the transmission of electricity during this season.
Inspections of the Company’s branches to verify their
respective preparedness for the 2009–2010 autumn-winter
period were carried out in accordance with the corresponding
Provision approved by the protocol of the Governmental
Commission in September 2008. The main goals defined in
the Provision stipulate the steady and dependable operation
of the Federal Grid Company’s electric grid units, the
uninterrupted supply of power to consumers, as well as the
preparation of personnel to work during the autumn-winter
period.
An analysis conducted in 2009 demonstrated that the
Company’s branches fulfilled their respective duties in
preparing for and completing the autumn-winter period.
Particular attention was paid to the Unified Energy Systems
of Siberia, as well as to Kuban, Tyumen and Primorye energy
systems in preparing for this difficult season. The Company
built and reconstructed a number of energy units in these
regions. For example, helicopter flyovers of the 220/500-kV
transmission lines were organised and mobile fast-response
teams were set up for the round-the-clock monitoring of the
technical condition of the energy units and the timely repair
of malfunctions along the backbone grids of the Republic of
Khakassia, Kemerov Region, and the Altai and Krasnoyarsk
regions.
As previously stated, the most complicated situation occurred
in Siberia, where the supply of electric energy was seriously
affected by the accident at the Sayano-Shushenskaya HPP.
Correspondingly, Federal Grid Company took additional
measures to increase the reliable transmission of electricity
in this region, which included the formation of an enhanced
emergency reserve, the installation of reactive power sources,
and the increase in the number of production centres to
operate equipment. As a result, the backbone transmission
lines in Siberia operated stably and consumers received
electricity supplies at full capacity during the autumn-winter
period.
34
Federal Grid Company Annual Report 2009
Business Overview
35
Federal Grid Company Annual Report 2009
Business Overview
Share breakdown of standard organisations in the overall
number of consumers presented in the chart:
Breakdown of Federal Grid Company counterparties
in 2009 according to party (share in total):
52
16
14
18
Energy sales organizations
Consumer enterprises
Distribution companies
Independent grid companies
The following chart shows the shares of the largest consumers
of Federal Grid Company services in revenue from power
transmission in the UNEG for 2009:
№
Counterparty
1
2
3
4
5
6
7
8
9
Tyumenenergo
Moscow United Electric Grid Company (MOESK)
MRSK Urals - Sverdlovenergo
MRSK Siberia - Krasnoyarskenergo
Lenenergo
Far East Distribution Company
MRSK Siberia - Kuzbassenergo
MRSK Urals - Chelyabenergo
Kubanenergo
10
MRSK South - Rostovenergo
Share, %
11.0
7.4
5.2
4.4
4.2
3.8
3.6
3.0
2.9
2.7
Technological Connection Services
The number of Federal Grid Company’s consumers for the
transmission of electric energy via the UNEG is increasing
mostly as a result of the Company’s drive for the technological
connection of new UNEG consumers. Technological
connection is a comprehensive service that is designed to
deliver electric energy to legal entities as well as to individuals
and provides for the actual connection of consumers’ power
receivers to the grid units.
Technological connection services are rendered to new
consumers as well as to current ones who require a boost in
power consumption.
Technological connection includes the following:
> preparation and delivery of the technical specifications
for technological connection;
> implementation of the technical specifications for
technological connection (construction/reconstruction
of substations, construction of high-voltage power lines,
etc);
> inspection of technical specification implementation;
> actual connection of the consumers’ power receivers to
the electric grid units;
> drawing up of the Act on Technological Connection.
Areas of Responsibility of Grid Companies
during Technological Connection
Federal Grid Company renders technological connection
services to consumers to the backbone electric grids that
meet the approved criteria of the UNEG and are proprietary
owned or used by the Company. The executive body of
Federal Grid Company or the MES branches is responsible
for providing technological connection to the grids and
monitoring the use, if a client’s request meets the following
criteria:
Executive Body
Branches of Federal
of Federal Grid Company
Grid Company – MES
Technological
connection
at the voltage level
220 kV and higher
up to and including 110 kV
The Company’s executive body
for
technological connection associated with an increase in
transfer capacity, an alteration in the connection format of
the current transmission lines or those under construction,
including voltage of 220 kV and higher.
responsible
is
Timeframes and Stages to Complete Technological Connections
A technological connection is a complicated process that
envisages, in individual cases, the substantial reconstruction of
the backbone grid, including the construction of high-voltage
power lines of additional transformer power, as well as an
alteration to the connection format of the current high-voltage
transmission lines.
A standard technological connection project is carried out in
four stages:
At the first stage, a client issues a request and Federal Grid
Company reviews it. If a consumer’s request does not contain
all of the required information, the Company informs the
consumer of this fact within six working days. Once a review
is finished – which could require up to 15 days in the event
of a simple technological connection and up to 40 days in
the event of a complicated technological connection – the
Company presents contract drafts to the consumer, and also
description of technical specifications in the event of a simple
technological connection.
At
the second stage, an agreement on completing
the technological connection is prepared and signed,
establishing the conditions for all procedures during the
project and the obligations of the parties to fulfill them.
The third stage involves interaction with the Federal Tariff
Service to set the amount of payment for the technological
connection.
At the fourth stage, the Client's power installations are
connected to the electric grids as per the agreed-upon
conditions and in accordance with the approved procedure
plan. If other deadlines are not stipulated in accordance with
the investment programme or an agreement of the parties,
the deadline for completing the procedures for technological
connection can not exceed:
> 1 year for clients whose total connected capacity of the
power receivers does not exceed 750 kVA;
> 2 years for clients whose total connected capacity of
the power receivers exceeds 750 kVA, if other deadlines
(but not in excess of four years) are not stipulated in
accordance with the investment programme or an
agreement of the parties.
In order to expedite the document-agreement process, the
Automatic Request System for technological connection was
set up within Federal Grid Company and its branches in 2009.
The system substantially expedites the relay and agreement
process of a request and all of the attached documentation
between the executive body and the Company’s branches.
Improving Energy Efficiency and Mitigating Losses
The programme to decrease electric energy losses in the
UNEG for 2009, as approved by the Federal Grid Company
Management Board,
three major provisions:
optimising operation conditions and management of the
electric grids, lowering auxiliary power requirements as well
as implementing energy-saving equipment.
included
As part of optimising the operation conditions and management
of the electric grids, optimum operation for reactive power
and voltage was maintained, electric-grid equipment was
shut off during light-load operation, and the duration of repair
and maintenance and servicing of the main grid equipment
was shortened. Consequently, Federal Grid Company’s MES
Volga branch decreased losses by 16 mln kWh in 2009. In
particular, special operations were implemented with the
shunt reactors at the 500-kV Veshkaim, Penza-2 substations.
Also, a number of transmission lines and power transformers
were shut off at the 220-kV substations.
In order to decrease auxiliary power requirements, the use of
cooling fans for transformers and autotransformers, as well
as heating and lighting resources at the buildings managing
the substations, have to be optimised. For example, in
2009 MES East was able to save 23 mln kWh by optimising
auxiliary power requirements while MES Centre saved 15 mln
kWh, and MES North-West saved 22 mln kWh. Indeed, these
measures implement throughout the entire UNEG reduced
electric energy losses by more than 65 mln kWh in 2009.
Energy efficiency is a top priority as the equipment is
upgraded at the respective UNEG units. Indeed, the
Company has concentrated on decreased loss, improved
transmission line transfer capacity, as well as lower operating
expenditures. Consequently, MES South had the high-
temperature wire repaired on the 220-kV Afipsky-Crimea
transmission lines, with a length of 210 km. The new wires
have a unique construction and do not corrode and ice up,
which is especially important, given the weather conditions
in the south of Russia that are characterised by sudden
drops in temperature and high humidity. As a result of the
work completed, the transfer capacity was increased from
200 to 360 MW, thus not only improving the dependability of
the supply of electricity in the Abinsk, Crimea and Seversky
regions of the Krasnodar Territory, but also decreasing the
loss of electric energy transmitted by 15%.
36
Federal Grid Company Annual Report 2009
Business Overview
37
Federal Grid Company Annual Report 2009
Business Overview
Energy-efficiency Measures for 2009:
Energy-efficiency measures
optimisation of electric grid steady-state conditions
(per reactive power, per voltage level)
switch-off during light-load of electric grid equipment
reduction in the length of time for repair and maintenance
Starting
date
Quantitative effect as on 31.12.2009
In RUB
Corresponding
amounts (in MWh*)
01.01.2009
01.01.2009
62,842,586
11,370,409.6
140,161
25,360
and servicing of the main grid equipment (including hot-line work)
01.01.2009
3,797,160.8
8,469
decrease auxiliary power requirements (including the optimisation
of the duration of work and the number of cooling fans for transformers
and autotransformers, as well as of heating and lighting resources
at the substation management buildings)
installation and activation of power factor correction units in the electric grid
replacement of overloaded and installation and activation of additional power
transformers at operating substations
Total for all measures
01.01.2009
01.01.2009
01.01.2009
01.01.2009
30,756,150.9
3,773,397.8
4,477,323
117,017,028
68,597
8,416
9,986
260,989
Aleksander Sukhorukov [ Head of Ochakovo 500 kV substation]
Implementation of innovative technologies
gives us confidence in our bright future.
Energy Losses in 2009
The total actual loss of electric energy in 2009 in the UNEG
was 22 120.61 mln kWh.
Breakdown of energy losses for 2009, %
1
Electricity load losses were 13,436.192 mln kWh; electric energy off-load
loss on transformers and autotransformers was 1,629.666 mln kWh; electric
energy loss on auxiliary power requirement of the UNEG was 990.737 mln
61
kWh; corona discharge electric energy loss on overhead transmission lines
was 4,990.09 mln kWh, on compensating devices was 232.89 mln kWh,
on shunt reactors was 466.268 mln kWh; electric energy loss due to fault
currents on transmission line isolators, frost, current transformers, voltage
transformers, excess voltage suppressors, connecting wires and bus-bars
of substation distribution units, high frequency connection units and meters
was 374.768 mln kWh.
23
2
4
2
7
Loss on auxiliary power requirements
Load loss
Loss on compensating devices
Loss to corona discharge via overhead transmission lines
Loss on shunt reactors
Off-load loss on transformers and autotransformers
Other electric energy losses
Comparison of electric energy loss in the UNEG for 2007, 2008 and 2009 in the following table:
Comparison of electric energy (ee) loss in the UNEG, mln kWh
Type of loss in the UNEG,
Total loss of electric energy in the UNEG, including:
Load loss
Off-load loss of electric energy on transformers and autotransformers
installed at the substations of the UNEG
Loss of electric energy on auxiliary power requirements of the UNEG
Loss of electric energy to corona discharge via overhead transmission lines
Loss of electric energy compensating devices and shunt reactors
installed at the substations of the UNEG
Loss of electric energy due to fault currents on transmission line isolators,
frost, current transformers, voltage transformers, excess voltage suppressors,
connecting wires and bus-bars of substation distribution units,
high frequency connection units and meters
2007
21,401.1
13,580.3
1,566.2
929.3
4,264.4
709
2008
21,865.7
13,517.5
1,681.9
951.8
4,599.5
754.9
2009
22,120.6
13,436.2
1,629.7
990.7
4,990.1
699.2
351.9
360.1
374.8
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Federal Grid Company Annual Report 2009
Business Overview
39
Federal Grid Company Annual Report 2009
Business Overview
Federal Grid Company obtains electric energy independently
on the wholesale market in order to compensate for the
actual net output loss in the UNEG, minus the losses taken
into account and paid by participants in the market. Electric
energy is obtained in Russian regions that are combined in
price zones, as well as in territorial subjects of the Russian
Federation that are not combined in price zones. The type
of region determines the calculation of value to remunerate
the loss of electric energy and capacity. As of April 2009, a
multiplying factor is used to value electric energy obtained on
the wholesale market to compensate for loss in the UNEG,
in the event that Federal Grid Company does not adhere to
the amount and deadlines of maintenance and servicing as
agreed upon in the established procedure with the System
operator. The FTS approves the multiplying factor, which is
determined in accordance with the Agreement on Accession
to the Wholesale Market Mercantile System. In 2009, the
multiplying factor was applied to the cost of electric energy
obtained by Federal Grid Company to compensate for loss in
the UNG, and it fluctuates from 1 to 1.029.
The cost of electric energy and capacity obtained by Federal
Grid Company in 2009 to compensate for loss was RUB
13,432,595,654, excluding VAT: RUB 2,567,545,152 for
electric energy, excluding VAT, and RUB 10,865,050,503 for
capacity, excluding VAT.
Maintenance and Servicing
Concise organisation of maintenance and servicing is
necessary to provide the dependable transmission of electric
energy, as well as improved efficient use of equipment and
other Company resources. Maintenance and servicing are
performed at Federal Grid Company based on the following
guidelines:
> minimise technological and economic risks;
> analyse technological breakdowns;
> refer to the results of previously performed maintenance
and servicing;
> adhere to the legislative and legal requirements
established for electric companies;
> follow the requirements of the standard technical
documents;
> attain the key performance indicators;
> stay within budget limitations.
The maintenance programme is formulated as per a rolling
schedule with a planning horizon of three years and one year
forward. In 2009, maintenance work conducted as part of the
target programmes cost RUB 3,554 mln, and RUB 10,774
mln, as per the maintenance and servicing plan. In 2009, the
plan was 99.8% completed.
Technical policy on
maintenance and servicing
The technical policy stipulates the
procedure for maintenance and
servicing. The following factors are
the main goals and objectives in
this area:
– complete maintenance and
servicing of equipment in
accordance with the Industry
Environmental Protection
Regulations;
– improve quality-control system;
– develop and implement
automated method to assess the
technical condition of equipment,
integrated with the automated
maintenance and repair
management (AMRM) database;
– formulate long-term (three to five
years) plans for maintenance and
servicing;
– automate the planning and
monitoring of maintenance and
servicing based on AMRM;
– specialise maintenance work;
– apply new technology for the
maintenance of substations,
transmission lines and new
materials that deliver high quality
and lower costs;
– mechanise work on substation
transmission lines, foremost on
the most labour-intensive types of
work;
– increase the amount of
maintenance on overhead
transmission under tension
(without switching off);
– improve monitoring on the part
of the Company’s executive body
to complete maintenance and
servicing;
– improve and implement
operating technology and
maintenance of overhead lines by
applying new types of technical
equipment.
In order to improve maintenance efficiency in the Company,
the position of chief engineer was created to manage the
block to organise and complete maintenance, and the
preventative maintenance system based on actual condition
was improved. Automation of equipment condition analysis is
also underway.
Also in the interest of improving maintenance efficiency,
the functions of maintenance and servicing of substations
and transmission lines were transferred in 2009 from
Glavsetservice UNEG to the MES branches of Federal Grid
Company. Having the branches’ own personnel perform
the maintenance allows for quickly receiving reliable data
on the technical condition of the equipment and planning
maintenance steps accordingly, as well as shortens the
timeframes and improves the quality of work.
Workplace Safety
Occupational Safety
Keeping personnel safe and healthy is the main function
of occupational health and safety activity at Federal Grid
Company. In accordance with the requirements of the national
standards of the Russian Federation GOST ISO 12.0.230-
2007 OSS, the Company’s health and safety system was
redesigned, and in March 2009, the Provision on the Safety
Management System was implemented and is being adopted
in stages. The Provision stipulates the following measures:
> the Occupational Health and Safety Board’s main
function is to generate concerted solutions and
proposals on issues concerning workplace safety
conditions;
> develop standard documents on workplace safety;
> provide additional training to employees of the workplace
safety division in the executive bodies of the branches;
> optimise the staff schedule for workplace safety.
The number of accidents at Federal Grid Company branches
reduced to four in 2009 vis-àa-vis six in 2008. The number of
accidents decreased from three to one at Elektroservice UNEG
in 2009, while the number of accidents actually increased at
Glavsetservice UNEG from two to 10 instances. This included
three people being fatally wounded from the maintenance
company on overhead transmission lines. Based on the results
of the investigations of the accidents, direct and indirect
reasons for their occurrence were established.
In 2009, the condition of working stations was evaluated at
all of Federal Grid Company’s branches and executive body.
Upon the conclusion, measures were designed to improve the
conditions.
In order to improve the safety of personnel at their respective
working stations, an analysis of conducted on the wearing of
industrial clothing, resulting in the test wearing of the following
types of industrial clothing:
> combination uniform for protection against electric arcs
and tick bites and other bloodsucking insects;
> full protective from electrocution while working in direct-
voltage areas;
> anti-encephalitic footwear.
Additionally, training seminars were held in all of the Company’s
branches on the use of the new industrial clothing.
In total, expenditures on occupational health and safety
measures in 2009 grew by 12.4% versus 2008, with expenses
for one employee increasing by 11.3%.
Industrial Safety
In 2009, there were 224 production units in use at Federal
Grid Company that were registered in the Government
registry of hazardous production units. The increased danger
of a number of grid units requires the Company to have a
full-scale insurance programme in place. In 2009, the Federal
Grid Company carried third-party liability insurance for injury
and health as well as third-party liability insurance for damage
to property and the environment in the event of an accident at
all of the hazardous production units. In addition, personnel
were actively trained and certified in industrial safety, and
a plan-of-action was developed for the localisation and
liquidation of the aftermath of possible emergencies.
Federal Grid Company developed instructional guidelines
for conducting periodic inspections of the UNEG electric
machinery as well as of overhead lines, and then the Federal
Service for Environmental, Technological, and Nuclear
Oversight (Rostekhzadzor) approved said instructions in
2009. The Company also developed and had Rostekhnadzor
approve the 2010–2012 plan for the identification and
registration in the government registry of storage areas for
residual fuel oil, areas for diesel substations and transformer
areas.
Fire Safety
In 2009, there were 11 technological outbreaks of fire, of which
10 cases involved substation equipment and one occurred in
the buffer area around overhead transmission lines.
The Company has begun work on a declaration of fire safety
that is intended to assess the fire risk at the Company’s units,
as well as develop comprehensive measures to save people
during a fire.
40
Federal Grid Company Annual Report 2009
Business Overview
41
Federal Grid Company Annual Report 2009
Business Overview
Federal Grid Company personnel pass fire-safety instruction,
fire-safety basics as well as a check of knowledge within a set
schedule. Once a year, fire-safety training and instruction is
held with the fire-fighting unit to impart practical experience
in extinguishing fires at all substations.
A review competition was held in 2009 to select the unit with
the best fire-safety measures. The results showed that all
the UNEG units have a high level of fire safety, but the best
branch was MES Centre.
Environmental Policy
Maintaining a responsible relationship with the environment
is the key principle to Federal Grid Company’s environmental
policy.
The Company considers the following areas of environmental
policy development to be important:
> adhere to Russian environmental protection legislation
(fundamental document is the Environmental Doctrine of
the Russian Federation);
> continuously improve the Company’s Environmental
Policy and environmental management;
> develop and implement in-house documents on
adhering to environmental standards and principles of a
responsible relationship with the environment;
> listen to the opinions of the leading environmental
protection organisations and experts on operations and
planning activity;
> introduce modern environmental standards in the
Company's day-to-day operations;
> conduct in-house and external environmental audits;
> conduct planned technical measures on protecting the
environment in a timely manner;
> take into consideration environmental aspects of activity
in the Company’s Investment Programme;
> train and improve the qualifications of all of the
Company’s personnel on environmental issues, as
everyone is responsible;
> inform the public on steps to protect the environment by
the socially relevant units;
> maintain openness and transparency in the Company’s
environmental activity, and provide the public with
reliable information on the Company’s impact on the
environment.
Impact on the Environment
The Federal Grid Company’s main area of business – the
transmission of electric energy – has less of an impact on the
environment than the production of electric energy. However,
it is important to the Company to fulfill its responsibility to the
environment in order to minimise any negative impact and to
improve environmental policy.
The Company recognises the following substantial types of
impact:
> impact on soil;
> impact on biological diversity.
The following are less substantial types of impact:
> effect on water bodies;
> effect on the atmosphere.
The impact on the soil is related to an electric grid company’s
covering of a rather large area with transmission lines,
substations and other grid units. In order to minimise the
impact on the soil, Federal Grid Company considers the
following areas to be of importance:
> responsible use of the land;
> prevention of transformer oil leakage;
> storage and recycling of waste.
The impact on wildlife is the subject of ongoing discussion
with the environmental and scientific community. For the
Company, the most immediate issue is the nesting of large birds
on the transmission lines. Indeed, the impact of the electric
and magnetic field on wildlife is an important environmental
aspect of the Company’s business. Consequently, Federal
Grid Company takes the following measures:
> Steps to protect birds;
> Establishment of protective zones for potentially
hazardous units;
> Adherence to environmental standards, sanitary rules
and regulations.
Essential Documents
Federal Grid Company relies foremost on the Environmental
Doctrine of the Russian Federation in its activity. The Company’s
fundamental in-house documents on environmental protection
are the Environmental Policy of Federal Grid Company
and the 2008–2010 Environmental Policy Implementation
Programme of Federal Grid Company.
Main goals of the Federal Grid Company’s environmental policy are:
> increase the level of environmental protection;
> increase the investment attractiveness of the Company
by being environmentally responsible and delivering a
high level of environmental safeguards.
The main goal of the Environmental Policy is to reduce
the negative impact of the electric grid companies on
the environment,
including by creating organisational
mechanisms. The Company’s 2008–2010 Environmental
Implementation Programme stipulates completing
Policy
organisation and technical measures:
1. Organisational measures:
> implement an environmental management system;
> develop corporate standards for environmental
protection;
> implement industrial environmental monitoring and
conduct environmental audits;
> hold environmental training for personnel;
> improve the documentation of environmental activity.
Protection of birds
One of the problems associated
with Federal Grid Company’s
operations is the impact on wildlife,
specifically on the nesting of
large birds on the transmission
lines. The landing of birds and the
falling of their waste products on
the transmission line equipment
occasionally causes short
circuits and electricity failure for
consumers. At the same time,
the Company does not wish to
harm the birds, and special care
is paid to the white stork, which
nests in the Amur Region and the
Khabarovsk Territory. These birds
are in the endangered species list
and are protected.
Since 2006, in the Far East, the
nests of the Far-East stork, which
are located next to high-voltage
lines on the transmission towers,
have been moved to specially
built metal platforms on the same
towers, but in safe locations. At the
same time, bow-shaped structures
are being installed to thwart the
birds’ landing on the hazardous
areas of the transmission line
towers, with the consultation
of ornithologists (bird experts).
Consequently, the electricity supply
to consumers is becoming more
dependable, and the danger to
the birds is being brought to a
minimum.
In 2009, twelve wire frames costing
RUB 38,351 were installed.
In total in 2009, there were seven
shutdowns in electric energy
transmission as a result of stork
activity (in 2007 there were 22, nine
in 2008). There were no reported
deaths of birds in 2009.
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Federal Grid Company Annual Report 2009
Business Overview
43
Federal Grid Company Annual Report 2009
Business Overview
2. Technical measures:
> formulate and implement target programmes to replace
and recycle trichlorodiphenyl-containing equipment;
> repair (reconstruct) the oil-container systems and units;
> equip areas for the temporary storage of waste;
> build and reconstruct sewage systems, wastewater
treatment facilities, and service-utility and rainwater
runoffs.
In 2009, the following environmental documents were approved:
> Provision on Industrial Environmental Monitoring;
> Provision on the Second Phase of the Target Programme
on the Recycling of Trichlorodiphenyl-Containing
Equipment;
> a standard instruction on the handling of hazardous
waste.
Measures Completed in 2009
In accordance with 2008–2010 Environmental Policy
Implementation Programme, environmental protection activity
in 2009 was completed in the following areas:
> organise and monitor the fulfillment of the requirements
of the Russian Federation legislation, corporate standard
and technical as well as organisation and management
document for environmental protection;
> arrange environmental protection management in the
Company;
> fulfill the technical measures of the Environmental Policy
Implementation Programme aimed at decreasing the risk of
polluting the environment;
> carry out the regulatory and technical provisions for
environmental protection;
> collaborate with subsidiaries and branches, monitoring
bodies, and environmental non-governmental
organisations.
Organisation Measures Conducted in 2009:
> Environmental audits were conducted at MES East,
MES North-West, MES Centre and MES South; and
functional (environmental) self-audits were organised
and conducted at MES Siberia and MES West Siberia;
> Industrial environmental monitoring was organised at
all of the Company’s units; the Provision on Industrial
Environmental Monitoring was developed and approved;
Recycling equipment containing
trichlorodiphenyl
Federal Grid Company completed the
first stage of the 2009 target programme
for the replacement and recycling of
trichlorodiphenyl-containing equipment,
which is the main element in fulfilling
the Company’s environmental policy
programme for 2007-2009. In fact, 18,200
static condenser canisters were recycled,
weighing 652 tonnes, and at a cost of RUB
39,400,000.
Trichlorodiphenyl was widely used
last century as a dielectric liquid in
the production of power transformers
and condensers because of its unique
thermophysical and electroinsulating
features, fire resistance and explosion
safety. However, trichlorodiphenyl is a
virulent poison and poses a high-threat
danger.
The Company’s environmental policy
envisages the replacement and recycling
of trichlorodiphenyl-containing equipment.
An expert organisation – selected via a
tender and possessing a licence to handle
hazardous waste and having the necessary
experience and facilities to recycle
trichlorodiphenyl – will handle the recycling
of the deconstructed equipment.
Currently, a quarter of the trichlorodiphenyl-
containing equipment has been
deconstructed and recycled. The
Company will continue the process till
all trichlorodiphenyl is eliminated from
production.
> Representatives from scientific institutes and
environmental organisations conducted an external
environmental impact assessment on four environmental
protection standards of electric grid units, testing all
stages of the life cycle;
2. Goals to develop the environmental policy
and improve nature conservation:
> approve and implement standards on environmental
protection at the electric grid units at all stages of their
life cycle;
> Interaction was organised with the coalition of
> organise and conduct, in accordance with the
environmental non-governmental organisations on
issues concerning improvement in the Company’s
environmental policy, fulfillment of the programme, and
preparation for the assessment on social responsibility
and corporate stability.
requirements of Russian Federation legislation, the
environmental training of all employees of the Company’s
executive body and the directors of the Company’s
branches;
> continue ongoing fulfillment of the target programme on
recycling trichlorodiphenyl-containing equipment.
In terms of handling hazardous waste, the following measures
were completed:
> the first stage of the target programme on recycling
trichlorodiphenyl-containing equipment was completed;
> standard instruction on the handling of hazardous waste
was approved;
> environmental training on the handling of hazardous waste
was organised for employees of the Federal Grid Company
branches – at the MES and MES subsidiaries, 134 people
completed training.
The following measures were completed as part of the 2008–
2010 Environmental Policy Implementation Programme:
> repaired oil-container systems and units at 141 units,
totalling RUB 124,284,600;
> equipped areas for the temporary storage of waste at 91
units, totalling RUB 1,344,850;
> reconstructed sewage systems, wastewater treatment
facilities, and service-utility and rainwater runoffs at 55
units, totalling RUB 76,975,200.
Goals for 2010
The Company envisages the following main environmental
protection goals for 2010:
1. Organisational goals:
> improve the organisation structure of environmental
protection management;
> receive ISO 14001 certification of the environmental
protection management system;
> conduct internal environmental audits at the Company’s
branches.
44
Federal Grid Company Annual Report 2009
Business Overview
45
Federal Grid Company Annual Report 2009
Business Overview
Regional Innovation Centres
and Import Substitution
In order to fulfill the innovation programme in 2009, a new
structure of the Company interaction with the science and
technology community was suggested, based on the
regional innovation centres, which unite scientific, design and
production organisations that have the potential to develop
innovative technology in the electric energy field.
The regional innovation centres have been tasked with
completing the following goals:
> create and develop the regional industry innovation
sector, taking into consideration the existing
competency;
> train and retrain staff for innovation work;
> attract investment to finance innovation;
> coordinate the work of the science, education,
production and financial sectors to develop innovation;
> work on tariff regulation and improving competitiveness
and high-tech production.
The regional centres have to create the foundation for
stable innovative growth of the electric energy and electrical
engineering industries in Russia. In 2009, the competency
of the regional centres was determined and cooperation
agreements were signed with all general participants in the
regional centre to provide science and technology services.
In addition, the proposals were evaluated, followed by the
most relevant objectives being set for 2010.
Federal Grid Company intends to conduct the innovation
policy by using Russian technology as much as possible.
Therefore, a programme to replace imports is planned for
2010, taking into consideration the Company’s requirements
for innovative wares. Development of domestic electrical
technology also decreases the Company’s dependence on
currency risks and cost overruns when fulfilling the investment
programme.
Coordinating Scientific and Technical Board
The Coordinating Scientific and Technical Board (CSTB) – a
continuously operating collective body – has been formed
to manage the innovation, technical and operation policy;
development and implementation of the latest equipment
and technology to the new construction projects; and
reconstruction and technical reequipping to improve operating
reliability and efficiency at the UNEG grids as well as to save
on operating costs. The Board comprises the leading experts
from research and development and design institutes of the
Russian Academy of Sciences; directors of the executive body,
branches and subsidiaries of Federal Grid Company; as well
as the representatives of System Operator, MRSK Holding,
and domestic manufacturers of electric energy equipment.
4–2. INNOVATION
Federal Grid Company firmly believes in the absolute need
to develop Russia’s infrastructure technologically, and is
striving to become one of the main innovative drivers of the
Russian economy. Consequently, the Company has directed
its activity to improving the management, reliability, efficiency
and safety of the electric energy units, which encompasses
the creation and implementation of cutting-edge technology,
materials, equipment, and management and monitoring
systems in the UNEG.
Innovation directly affects improving the reliability of the UES.
In fact, innovation increases quality and efficiency of electric
energy transmission. Introducing the latest technology allows
for more efficient inter-system functions; improves adaptability
of the grid to unexpected increases in load and capacity; and
renders the grid safer. Innovation provides more dependable
delivery of electricity for cities and large load centres, as
well as provides capacity to large power plants. Decreasing
the effect of grid limitations on the functioning of the electric
energy wholesale market is another area of innovation.
Innovation in the grid assists in the export of electric energy.
The latest technology in the industry develops other integrated
platform projects, too, such as oil, gas and coal supplies,
as well as the railway and automobile networks. In addition,
innovation supports the development of the key branches of
industry.
Federal Grid Company has organised a number of meetings
with the leading Russian scientists and engineers to drive
progress in all areas. Indeed, the best world practices have
been studied and used to determine and develop the main
innovation of the UES through 2020. In 2009, the Company
signed an agreement with the leading companies of the
Centre Region, North-West Region, Urals, Volga Region and
Siberia Region as part of implementing the Company’s plan
to create electric technology innovation centres to develop
and implementation the latest solutions for the electric grid
field.
The Board’s main functions include the review and assessment
of the comprehensive innovation projects and programmes,
taking into consideration the best world practises:
warns about the occurrence of ‘bottlenecks’ and critical
situations.
> prospective areas and programmes for the innovation of
Federal Grid Company;
> efficiency of the basic scientific research being
conducted, and the pilot and applied work affecting the
Company’s activity, including the economic area; and
assessment of the practical use of the results;
> proposals on applying the research and development
breakthroughs and best practises of other countries to
resolve the Company’s production goals;
> proposals on improving the provision of resources for the
The creation of Smart Grids is a worldwide trend, as work
is conducted in this area in the USA, Japan, India and
China. The European Union is developing the European
Electric Network of the future concept. Russia also has
some experience in this field, with Federal Grid Company
launching pilot projects to implement innovation in the
network: flexible transmission line, back-to-back schemes
(BtB), ACS, and unified electric energy grid. Creating Smart
Grid could become the main driver of technical progress in
the electric energy industry, inspiring the following areas:
> development of innovative technology for transmission
Company’s innovation.
and transformation of electric energy;
Organisational work and the creation of a collaboration
structure will allow the Company in 2010 to transfer to a
qualitatively new level of innovation. In 2009, the CSTB and
the Company’s Management Board approved the innovation
and modernisation policy. A decision was rendered on
implementing the innovation programme to create a next-
generation Smart Grid. The goal of research and development
and design and engineering in 2010 is to create and use the
technology and elements of Smart Grid. By implementing this
technology, Russian electric energy will move to a new level
of technical quality, and a positive ripple effect will grow the
Russian economy as a whole.
Smart Grid
Smart Grid is a synergy of those connected to the generation
sources and the consumers of electric energy transmission
lines, electromagnetic convertors, communication devices,
protection and automated devices, and IT and management
systems. The network is replete with active devices to restore
the electricity supply to consumers automatically during any
difficulties or emergencies. Smart Grid differs from the usual
electric grid by offering:
> ACS for electric energy demand;
> active network elements with controlled parameters;
> network current condition evaluation systems;
> central load control systems;
> quality monitoring and management systems;
> automated electric energy balance support system,
monitoring of the backbone line transfer load;
> meteorological monitoring with preventative alterations in
the network operation parameters.
Smart Grid provides consumers with beneficial conditions for
electricity supply; adapts in real time to various discrepancies
in the settings; provides for the transfer of generation
source capacity in the UNEG, including alternative electric
energy sources and low generation; as well as predicts and
> fundamental R&D;
> development of domestic production, and subsequent
decrease in the share of imported equipment in the
industry;
> increase in energy resource efficiency, and subsequent
reduction in the emission of carbon dioxide and
hazardous substances into the atmosphere in the name
of economic production;
> development of alternative sources of electric energy
and low generation;
> training and profession development of qualified staff.
Creation of the Smart Grid is important, as it assists in the
general economic growth of the country, by increasing the
technical potential of Russian industry and lowering power
consumption.
The project envisages the use of various types of innovative
equipment and technology, including:
> static flexible devices with versatile features;
> short circuit current limiting devices (switches,
superconductors, semiconductors);
> various types and uses of electric energy storage (large
energy consumption accumulators, flywheel energy
storage, superconductor, storages and others);
> equipment based on high-temperature superconductivity
(generators, transformers, alternate current and direct
current (AC DC) cable lines, reactive power capacitors,
reactive, short circuit current limiters, and others);
> semiconductor devices (high-power transistors, including
silicon carbide ones); second generation high-power
superconductors;
> on-line self-test systems;
> optical electrical parameter measuring systems;
> bundled software and information management systems.
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Federal Grid Company Annual Report 2009
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Federal Grid Company Annual Report 2009
Business Overview
Research and Development (R&D),
Project and Technological Activity in 2009
The main areas of Federal Grid Company’s R&D in 2009
were focused on fulfilling the innovative equipment creation
programme, as well as creating equipment and technology
for industrial construction methods of transmission lines,
such as:
> create flexible transmission line technology and
equipment;
> create superconductor material-based equipment;
> ensure the explosion safety of high-voltage, oil-filled
electrical equipment;
> develop lightening protection for 220-kV overhead
transmission lines, based on multi-chamber insulator-
arresters (MCIA);
> develop constructive solutions, equipment, and
monitoring systems and methods for the creation
of substations and transmission lines.
Expenses (purchasing budget) in 2009 for research and
development (R&D) were RUB 388.68 mln (270% of the 2008
amount).
Creation of Flexible Transmission
Line Technology and Equipment
In order to improve the manageability of electric grids,
flexible alternating current transmission systems (FACTS) are
used throughout the world. They are equipped with various
substation units in order to stabilise voltage, increase stability,
control power flow, and decrease loss in the electric grid.
The implementation of FACTS is one of the most important
strategic areas in the innovation of the UNEG.
FACTS are not only used for alternating current transmission
with power electronics, but also for direct current transmission
lines and BtB.
The widespread application of FACTS qualitatively alternates
the energy system features by improving stability, increasing
control flexibility, reliability and efficiency of electric grid
operation, and raises the quality of electric energy.
following Russian R&D
The
institutes are responsible
for implementing the programme to create the flexible
transmission lines and equipment: Energosetproekt Institute,
Federal State Unitary Enterprise All-Russia Electro-Technical
Institute (FSUE AEI), ENIN, R&D Institute of Direct Current
Transmission, and others under the general scientific and
technical management of NTC-Power.
The following results were achieved in 2009:
> STATCOM
The first domestic STATCOM, with a capacity of 50 MVAR, was
assembled and tested at the NTC-Power facilities. STATCOM
is slated for use at the end of 2010 at the 330/400-kV Vyborg
substation, and its implementation will end the limitation
on electric energy export when repairing synchronous
capacitors, as well as reduce the limitation during emergency
shut-down of 330-kV overhead transmission lines. STATCOM
is the main unit in completing a number of innovative projects,
such as the creation of the asynchronous interconnects of
the interconnected power system (IPS) Siberia and IPS East,
respectively, at the 220-kV Mogocha substation and the 220-
kV Khani substation;
> SVC
SVC with capacities of 100 and 160 MVAR, each, were installed
at the 500-kV Novo-Anzherskaya and Zarya substations,
MES Siberia; and SVC with capacities of 50 MVAR, each,
were installed at the 220-kV Slavyanskaya, Kirillovskaya,
Bryukhovetskaya substations, MES South. The assembler
was Enercomserv Research & Design Centre. In December
2009, the SVC of another domestic producer, Ansaldo-AEI,
was certified;
> ASC
Two 100 MVAR ASC were installed at the 500-kV Beskudnikovo
substation, MES Centre, and were manufactured at the
Power Machines factory, under the scientific and technical
guidance of NTC-Power. ASC have generation capabilities
and can be used broadly for reactive power, as well as have
high overload capabilities in order to provide stability for
adjacent electric energy systems during emergencies;
> MCSR
MCSR with capacities of 25 to 180 MVAR, and produced by
ZTR, Ukraine, were installed at the following Federal Grid
Company units: 180 MVAR MCSR at the 500-kV Tavricheskaya,
Barabinskaya, Irtysh substations, MES Siberia; 100 MVAR
MCSR at the Chita, Khekhtsir, Khabarovsk substations, MES
East; 63 MVAR MCSR at the 330-kV Sovietskaya substation;
and 25 MVAR MCSR at the 110-kV Dvurechenskaya, Igolskaya
substations, MES West Siberia.
Electrozavod Holding developed and assembled a 180
MVAR MCSR according to Federal Grid Company technical
specifications. The reactor is the domestic equivalent of the
MCSR delivered by Zaporozhtransformator (ZTR). As a result
of the innovative solutions, loss in the new reactor is 30%
lower than in the ZTR-produced MCSR. The reactor was
installed at the 500-kV Nelym TP, MES West Siberia.
Enercomservis Research & Design Centre has developed a
new type of MCSR that is equivalent to the SVC group, which
uses as a reactor special transformer leakage inductive
reactance to provide direct connection to the high-voltage
grid. The first two MCSR of this type, with a capacity of
25 MVAR each, were installed at the 110-kV Kogalym and
Progress substations, MES West Siberia. There are plans to
create reactors of this type at 220 kV and higher.
> VR
Vacuum reactors (VR) with a capacity of 4х45 MVAR were
installed at the 500-kV Balashovskaya substation, MES
Centre, thereby normalising the voltage in the adjacent grid
during times of minimum load.
> A large volume of research and development (R&D)
was completed, leading to the development of proposals
on using FACTS in the UES of Russia.
Also in 2009, completion variations for the Leningrad nuclear
power plant (Leningrad NPP)-Vyborg energy transmission
via underwater cable along the bottom of the Finnish Bay
were developed. Upon completion of the feasibility study,
a decision was taken to complete the transmission with a
capacity of 1000 MW and a direct current of ±300 kV.
Project completion will result in the:
> improvement in the reliability of the St Petersburg
electricity supply;
> improvement in the reliability of exporting electric energy
to Finland;
> reduction in the loss of electric energy in the St
Petersburg (80 MW) power system;
> St Petersburg grids shedding transit cross flows
(600–800 MW), and the possibility of additional
connections of consumers in the quickly growing
eastern section of the city.
Structures used when developing
flexible alternating current
transmission systems (FACTS)
Structure
Usage
vacuum controlled
reactors (VR)
magnetically controlled
shunt reactor (MCSR)
Compensates for the charge
capacity of transmission
lines and in the load
nodes in order to maintain
the voltage within the
permissible limits in the set
operation
Seamlessly regulates
voltage regularly (not
exceeding the norm) flowing
through the transmission
lines
static VAR capacitors
(SVC)
Regulates high/low voltage
in transmission lines
synchronous static
capacitors (STATCOM);
asynchronous capacitors
(ASC)
series capacitor (SC)
Dynamically stabilises
voltage, increases
transmission line capacity,
decreases voltage
fluctuations, improves
stability during power-
frequency transients
Increases power
transmission capacity
and transient stability
thyristor controlled series
capacitor (TCSC)
Regulates transmission
line impedance, increases
capacity and other functions
phase-shifting transformer
(PST)
Optimises power flow along
parallel transmission lines
Back-to-back voltage
sourced converters
(BtB VSC);
asynchronous
electromechanical
frequency converter
(AEFC)
unified power-flow
controller (UPFC)
Asynchronously connects
all electric energy systems
that require widespread
regulation of reactive power
Comprehensively regulates
active and reactive power
and transmission line
impedance
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Federal Grid Company Annual Report 2009
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As part of the project, all the main technology needed to set
up Smart Grid is slated to be created and developed:
> operation management technology in the concentrated
power systems, containing active elements;
> circuit designs to control the commutation of rectifier
tubes;
> joint operation of a large number of converters, located
in one power centre (Vyborg converter complex,
Leningrad NPP-Vyborg DC transmission);
> next-generation automated control system;
> methods and equipment for active filtration.
Experience and results obtained from work will be fully used
when creating Smart Grid.
Use of direct current transmission and BtB (DC transmission
and BtB VSC) is one of the most efficient ways to improve
manageability and adaptability of the electric grid. Indeed,
more than a hundred of these units are in use today around
the world. In addition to the improved manageability, there are
also other advantages of DC transmission, such as electric
energy transmission over long distances, negotiation of
water obstacles, and the prevention of emergency situations
arising in large power systems.
Developing Superconductor Equipment
Over the past decade, much attention has been paid to the
research and development of superconductor equipment.
Increasing electric current density,
improving specific
capacitance, as well as special, specific features that are
available only via superconductors, creates opportunities for
the development of highly efficient types of electric energy
equipment.
Particular attention should be paid to modeling and testing
power equipment for electric systems that use high-
temperature superconductor (HTS – liquid nitrogen level)
material.
The commercial profitability of superconductor electric
energy equipment is attained by using second-generation
high-temperature conductors. At liquid nitrogen temperature,
these conductors can compete with
low-temperature
superconductors (helium level); and, when mass produced,
they are cheaper than copper conductors. Today, a number
of countries are completing work on developing second-
generation HTS, on the back of which it is planned in the near
future to begin releasing superconducting electric energy
equipment. When mass produced, the new equipment will
be technically as well as commercially superior to traditional
electric energy equipment. To this end, the USA, Japan,
Germany, Switzerland, China, and a number of other
countries, are actively developing this technology, with
Thyristor controlled series
compensator (TCSC) at the
Sayano-Shushenskaya HPP
In 2009, technical requirements
and development proposals
for the TCSC for the 500-kV
transmission lines of Sayano-
Shushenskaya HPP-Novokuznetsk
were developed. Installation of
this unit will help increase the
transfer capacity of the overhead
transmission lines and distribute
power to Sayano-Shushenskaya
HPP following restoration
to 600 MW.
Using the unit is especially
important during flood season,
as this increases the safety of
using the Sayano-Shushenskaya
HPP facilities.
companies from the USA showing the most success, where
there is significant federal and state support.
It is worth noting cables, inductive storage, current-limiting
devices and transformers among the currently developed
superconducting power equipment. The current limiters and
cables use HTS, while inductive storage uses low-temperature
magnetic systems. There is also interest in developing HTS-
based synchronous capacitors.
RAO UES of Russia has developed the programme to create
and apply superconductor-based technology and equipment
in the electric energy industry, and Federal Grid Company
has continued the endeavour. In 2009, the following work
was completed in this area:
> A 20-kV, 2000-А, 200-m HTS cable transmission line
was developed and assembled; an HTS cable
transmission line was tested on the territory
of NTC-Power, created in 2008;
> A cryogenic system, with a capacity of 8 kV in the cold,
was designed, assembled, and tested. The system
provides the possibility of creating an HTS cable
transmission line with a length up to 5 km;
> In agreement with MRSK Holding, the 110-kV Dynamo
substation of MOESK was selected as the test site
for the HTS cable. The HTS cable transmission line will
be installed along with the newly developed cryogenic
system;
> Technical proposals on creating HTS current limiters
up to 20 kV were developed.
The complex is slated for endurance testing in 2010 on the
territory of NTC-Power in order to develop the approved
proposals and gain experience in the expanded use of the
HTS cable transmission line equipment. Consequently, a
cryogenic, current feed-through system and an ACS, which
will provide maximum facilitation in testing the HTS cable
transmission line, will be assembled and delivered to the 110-
kV Dynamo substation.
following Russian R&D
institutes are responsible
The
for implementing the programme to create and supply
superconductor-based technology and equipment to the
electric energy industry: ENIN, NTC-Power, All-Russia R&D,
Engineering and Technological Institute for the Cable Industry
(VNIIKP), and others.
Coordination of Short Circuit Currents
in the Electric Energy Systems
For the goal-oriented integrated use of the current-limiting
devices, a draft concept project has been developed to
decrease short circuit currents in the electric energy systems
of metropolises, along with a number of other measures
to lower short circuit currents. The concept envisages
the intelligent use of the current-limiting devices, including
power equipment and superconductivity. It will be possible
to develop a grid and retain the breaking capacitance of the
switching equipment of the electric facilities in operation.
Explosion Prevention of High-voltage,
Oil-filled Electric Energy Equipment
Explosion prevention is one of the main issues in ensuring
safe operation of the electric energy equipment in large
cities. In 2009, Federal Grid Company completed a number
of projects to develop explosion and fire warning measures,
as well as create explosion-proof equipment:
> the programme and analytical structure Flow Analysis of
Transformer Oil and Products of Its Decomposition in High-
Voltage Electric energy Equipment under Pressure Increase
Owing to a Short Circuit or an Energy Explosion Release’
was developed;
> A 110-kV transformer was tested for explosion safety under
arcless pulse pressure sources;
> A mathematical model and experimental method to
test high-voltage oil-filled electric energy equipment for
permissibility and explosion safety during pulsed increase
in pressure with the use of arcless pulse pressure sources
was developed.
In conjunction with ZTR, standard tests were conducted on
the explosion safety of 110/220-kV upgraded oil-filled cable
trunking on the territory of the Makeevsky State Research and
Development Institute for Mining Industry Safety, Ukraine.
The constructional features of the new trunking significantly
reduce the risk of the frame exploding when internal short
circuits occur.
The cable trunking is a section of the power transformers
and connects the cable entries of the transmission lines and
the autotransformer. The manufacturer presented upgraded
trunking that met the high demands of Federal Grid Company
for explosion safety, and standard tests were conducted to
confirm the stated features of the cable trunking, testing the
mechanical resistance of the frame, as well as the durability
of the bursting disks installed on it.
An alternative method was developed and applied as a result
of the direct tests of the trunking being extremely difficult owing
to the absence of special expensive panels. The essence
of the method lies in the creation of excess pressure within
the cable trunking with the help of an explosive substance
charge, whose energy is the equivalent of what occurs
in trunking during an internal short circuit. The Makeevsky
Institute selected the explosive substance. The charge was
set in a special bracket that was attached inside the trunking.
The charge was detonated once the trunking had been filled
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Federal Grid Company Annual Report 2009
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Federal Grid Company Annual Report 2009
Business Overview
with transformer oil. This was the first time the method was
applied in the Commonwealth of Independent States (CIS).
Work on improving the applied cable trunking and its
testing was conducted in accordance with the Federal Grid
Company’s implementation plan to improve the explosion
and fire safety of transformers and their chambers at the
500-kV substations of the Moscow Ring. Following the
successful testing in 2009–2010, there are plans to replace
around 300 of the installed cable trunking with the upgraded
version, upon which the reliability of the electric grid units will
improve, including substations delivering electricity supplies
to Moscow and the Moscow Region.
Development of Multi-chamber
Insulator-arrester-based (MCIA)
Lightening Protection for
220-kV Overhead Transmission Lines
MCIA is an innovative development of Russian scientists,
which is intended to protect overhead lines from lightening
strikes, and combines the properties of insulators and
arresters. The new insulator-arrester is unique in that it
discharges the energy of lightening surges and suppresses
power flow currents by using many small consecutive blowout
chambers that efficiently limit discharge current.
Using MCIA electric grids will enable forgoing the use of
protective grounding wires, which will reduce the cost of
line construction, reduce operating costs and increase the
reliability of electricity supplies, resulting in a very low number
of lightening outages along transmission lines.
In 2009, the first stage of development of this innovative
device was completed. Consequently, special climatic tests
were conducted to check the capabilities of MCIA in icing
conditions. The Swedish laboratory STRI – among a limited
few in the world where such testing can be conducted – was
chosen as the test location. The insulator-arrester was placed
in a special chamber that simulates icing conditions, and a
30-mm thick layer of ice was placed on the test device. The
results of the test confirmed that various degrees of icing
do not affect the insulator properties, nor do they affect the
discharge features of the MCIA.
There is a particularly high need for innovation of the
Northern Caucasus transmission lines, which experience on
average ten times more hours of lightening than Russia’s
midland area.
Strings of 220-kV insulator-arresters are slated for further
testing in 2010 at a number of testing centres. Once the
design features have been approved, the advanced design
will be tested in the Rostov Region on 220-kV transmission
lines at a length of 140 km. The line will be fully equipped with
MCIA, and the traditional overhead protection cable will be
dismantled. Development is planned for analogous systems
at 330 kV.
Development of Structural Solutions,
Equipment, Systems and Methods
of Monitoring for the Creation
of Substation Transmission Lines
Using innovation will reduce capital expenditures, deliver
high speed and quality when installing transmission lines, as
well as improve the reliability of electricity supplies. One such
innovation is multifaceted transmission line towers.
The multifaceted tower reaches the installation site via ready-
fitted sections with a minimal number of bolted connections.
In addition, when compared to a standard lattice, a new
tower occupies considerably less space, has better stability
and corrosive resistance. The construction of a multifaceted
tower permits the highly efficient use of the latest foundation
engineering under difficult roadway conditions, for example,
using a boring piles, pile shells and bored piles.
The Company has used multifaceted towers since 2005,
with the first one of this type being installed in the Kostroma
Region on the 110-kV Manturovo-Kronostar transmission
lines. Multifaceted towers will be installed for the first time
on 500-kV lines. Indeed, Federal Grid Company is currently
implementing a pilot project to install these towers for the 500-
kV Krasnoarmeiskaya-Gazovaya transmission lines that pass
through the agricultural lands of the Samara and Orenburg
regions. Using the multifaceted towers with significantly
reduce the amount of land allotted for commercial purposes,
and improve the reliability of the transmission lines as well as
agricultural work safety.
The multifaceted tower for the 500-kV Krasnoarmeiskaya-
Gazovaya overhead transmission lines is lighter than a
standard lattice by 9%, comprises 35 parts instead of 916 (26
times less); and has 206 fitting bolts instead of 1,508 (7 times
less). Consequently, labour output and duration of assembly,
which requires the most time, are reduced by 10 times.
In 2009, the 330-kV Vostochnaya-Volkhov-Severnaya overhead
transmission lines were constructed and put into operation
with multifaceted steel towers and bored-pile foundations.
Additionally, feasibility studies were conducted and construction
was planned on the multifaceted towers of the 500-kV
Krasnoarmeiskaya-Gazovaya overhead transmission lines; the
330-kV Irganaiskaya HPP-Chiryurt overhead transmission lines;
the 500-kV Kostromskaya GRES-Nizhny Novgorod overhead
transmission lines; the 220-kV Zeleny Ugol-Russkaya overhead
transmission lines with the development of the three-segment
multifaceted column of the 220-kV Centralnaya-Shepsi overhead
transmission lines; and the 220-kV Shepsi-Dagomys overhead
transmission lines. In order to deliver electricity supplies to the
АPEC summit, Federal Grid Company is specifically developing
a 220-kV three-segment multifaceted tower that can transmit
electricity to cities with a minimum land allotment.
The newly designed towers have been constructed jointly
with North-West Electric Company as part of the Federal
Grid Company Target Programme. In order to implement
the tower and foundations, all standard technical documents
have been worked out, and there are plans in 2010–2011
to conduct professional development courses for the design
engineers and constructors. Additionally, work is planned to
expand the number of base series of multifaceted towers and
to upgrade the standard lattice and foundations of the older
models to bring it in line with current requirements.
Main Areas of Activity as
Part of the Single Innovation Policy for 2010
In order to improve the reliability, efficiency and quality of
electric energy transmission through the use of innovation,
Federal Grid Company in 2010 has planned work in the
following areas:
> develop conceptual provisions of Smart Grid;
> develop and implement new types of power equipment,
including those assembled from new materials and
technology;
> implement new RPEC, diagnostic equipment and energy
meters, respectively;
Russian Federation Energy Ministry:
> on requirements for electromagnetic compatibility;
> on safely using electric grids
The experts represented the interest of the electric grid
industry, as well as assisted in developing a coordinated
position on the issues of technical regulation in the electric
energy sector. Particularly, the specialists were part of the
Working Group on Technical Regulation Issues in the Electric
energy Industry, which was created by order of the Russian
Federation Energy Ministry in June 2009.
In 2009, the regulatory internal documents were amended
and updated, with 32 being approved and registered as
organisation standards. Another 29 documents were prepared
for approval, and 61 are currently under development. The
corporate information portal contains a section on regulatory
and engineering documents, while an e-library of the
documents has been created.
In 2010, the Company has set the following goals for completion
in the area of regulation of the electric grid industry:
> monitor, assess and administer the technical regulation
at the final stages of passage in the State Duma
(parliament) of the Russian Federation Government;
> monitor the regulatory acts under development in the area
of technical regulation, as well as federal standards, codes
of conduct and other documents in the sphere of interest
of the electric grid industry;
> prepare and approve the Federal Grid Company
> improve the monitoring, and network and equipment
operation systems, respectively;
> develop and implement technology to protect grids from
Programmes on the development and review of the
regulatory documents for 2010–2012, as well as the
planned implementation;
outside forces, such as lightening strikes, and ice and wind;
> prepare for approval 92 corporate-level regulatory
> improve the operating efficiency and safety of the electric
grids.
Regulatory and Engineering
Provisions for Innovation
In 2009, Federal Grid Company represented the electric
grid industry during the amending of the Russian Federation
regulatory acts on technological regulation. Specifically,
the Company assisted in developing and evaluating three
technical regulations:
> on safety at power plants and grids;
> on the safety of electric installments;
> on the safety of high-voltage equipment.
The Company prepared and sent its conclusions on the
three regulations to the Russian Federation State Duma
(parliament). In addition, the Company’s specialists reviewed,
prepared and sent their evaluations on the design of two
Eurasian Economic Community technical regulations to the
documents that have been developed in 2009–2010;
> develop a function e-registry for the regulatory documents
on the topic of electric grids;
> continue to improve the performance level of the
information resources for the regulatory and engineering
documents on the corporate website.
Certification of Equipment,
Technology and Materials
As part of creating a certification system, the Company
is assessing the possibility and practicality of using new
types of equipment, technology and materials of various
manufacturers.
the
manufacturing conditions, adherence
the standard
the sector and corporate regulatory
requirements of
documents, taking into consideration the length of time the
equipment has been available to use. In addition, attention
is paid to service, such as the availability of hot reserve, and
quick-response specialists.
The certification process verifies
to
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Federal Grid Company Annual Report 2009
Business Overview
The procedure ensures that poor quality or outdated
equipment will not be selected for use at the UNEG units.
In 2009, 726 requests for certification and extensions were
reviewed. There were 112 positive findings for use in the
Company, including 57 for Russian and 55 for imported
equipment, respectively. There were unfavourable findings
for 13 types of equipment.
NTC-Power heads
the organisation and conduct of
certification for equipment intended for use in Federal Grid
Company. To optimise the process for 2010, the following
steps are planned:
> update the Procedures and Methods section on the
corporate site;
> approve the schedule for certifying equipment;
> post the general technical requirements as per type of
equipment and the price limits for certification on the
corporate site;
> update the Depository on Equipment Certification;
> approve the compositions of the certification commissions.
maintenance expenditures for transmission lines;
5. organise the production of HTS-based material and
equipment;
6. develop power equipment and units, mostly of various
grid-management types (FACTS);
7. set up a highly integrated information control package
for real-time dispatching, with expert systems for taking
decisions;
8. create highly reliable channels of communication
between the different levels of dispatching, and create
backup digital channels to exchange information between
the units and control centres;
9. construct and widely implement centralised emergency
control systems, encompassing all levels of UES of Russia;
10. deliver reliable connections to the UNEG for consumers
and power plants (power distribution scheme for power
generation facilities as per (N-1) and (N-2) criteria;
11. provide maximum capacity to attain technological and
economic advantages for the operation of the regional
electric grids in UES of Russia, including the provision of
mutual assistance, depletion of reserves and requirements
in the station capacity, improving their structure as part of
UES of Russia, handling energy resources during times of
sharp domestic and external fluctuations in the fuel market,
functioning of the wholesale electric energy market, and
others);
12. connect the isolated electric energy regions to the
UNEG.
4–3. INVESTMENTS
The main investment goal of Federal Grid Company is the
technological renovation and modernisation of the UNEG units.
The large-scale investment programme being carried out by
the Company is necessary to maintain the grid in working
condition, improve its reliability, remove grid limitations and
create the possibility of additional load capacity.
Development of the Unified National
Electric Grid (UNEG)
Development of the Unified National Electric Grid (UNEG) is
one of Federal Grid Company’s top priorities. The strategy
to devleop the UNEG determines the main areas and
mechanisms for modernising the electric grid infrastructure,
considering the establishment of market relations within the
electric energy industry. The main areas of development are
set in accordance with the Development Plan of Unified Energy
System, including the Development Plan of UNEG and the
Development Programme of UES of Russia for seven years.
The documents are developed as per the Decree No. 823 of
the Russian Federation government, dated 17.10.2009, titled
On Timeframes and Programmes of Prospective Electric
energy Development. These documents are the basis for
the Company’s relations with the ministries of the economic
block, as well as with government bodies responsible for the
regulation and development of electric energy.
The following points are the main strategic goals and tasks to
develop the UNEG up to 2016:
1. provide for the energy safety of Russia; safeguard the
country, its citizens, society, the state and economy by
developing the UNEG; provide for the dependible function
and clear development of the energy infrastructure; do not
permit the critical depreciation of production facilities; and
stimulate the attraction of investment to upgrade the system;
2. set up a highly integrated and intelligent backbone and a
new-generation electric distribution grids in UES of Russia
(Smart Grid);
3. build ultra-high AC DC transmission lines for the Siberia-
Urals-European part of Russia;
4. construct lines using the lastest composite materials
to increase current-carrying capability and decrease
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Federal Grid Company Annual Report 2009
Business Overview
The key indicators of the UES of Russia Develoment Programme
for the next seven years in the interconnected power system
(IPS) and UES of Russia, as a whole, are presented in the
following chart:
№
1.
2.
3.
4.
5.
6.
7.
IPS Russia
IPS East
220 kV
500 kV
IPS Siberia
220 kV
500 kV
IPS North-West
220 kV
330 kV
750 kV
IPS Mid-Volga
220 kV
500 kV
IPS South
220 kV
330 kV
500 kV
IPS Urals
220 kV
500 kV
IPS Centre
220 kV
330 kV
500 kV
8.
UES of Russia
220 kV
330 kV
500 kV
750 kV
km
5,827.8
1,276.3
3,311.6
4,032.2
976
2,744
587.5
1,191.5
1,667.6
894.2
934.8
2,490.8
3,541
710
1,122.7
958.2
355
32,906.1
17,149.7
3,678.8
11,135.1
942.5
2010–2016
MVA
4,460
668
10,550
15,219
1,184
7,662
3,200
1,895
5,677
6,330
2,132
4,575
8,462
8,474
8,428
400
21,166
5,757
115,359
40,429
10,194
55,779
8,957
MVAR
900
1,456
4,210
1,500
1,620
1,592
230
200
540
12,248
5,098
1,500
5,650
Investment Programme
The Federal Grid Company’s investment programme is
based on the principles of efficient use of capital, which first
and foremost means investing efficiently in every project.
Additionally, the principles prioritise projects and the integral
efficiency in the Company’s investment activity as a whole.
Projects to develop the following main areas are priorities in
grid construction and in ensuring the Company’s financial
standing:
> dependable supply of electricty to consumers;
> functioning of the electric energy wholesale market;
> reliable output of power plants;
> implementing an intersystem operation of all unified energy
systems in UES of Russia;
> eliminating bottleneck intersystem limitations in electric
energy transmission;
Completion of Programme for Additional Capacity
and Reconstruction of Grid Units in 2009
In 2009, construction was completed and production
capacity was switched on at 34 units, including four units
introduced over those previously planned (external electricity
supply, Valaam Island – 44.6 MVA, 100.8 km; installment of
the АТ-2 at the 220-kV Bachatskaya substation – 125 MVA;
220-kV Oznachennoe (Beya)-Askiz overhead transmission
lines – 50.1 km; installation of the capacitor bank at the 500-
kV Oznachennoe substation – 208 MVAR). In total in 2009,
6,096.6 MVA of transformer power, 1,768 MVAR of reactive
power, and 769.6 km of overhead transmission lines were
commissioned. The decision No. 796/2 – as rendered by the
Management Board on 30.12.2009 – has established the
deadlines for completing the acts on commissioning as per
form KS-14, and for transfer to the fixed assets.
> simultaneous collaboration with foreign electric energy
Most Important Units Energised in 2009
systems and export of electric energy and capacity to the
electric energy systems of neighbouring countries.
Capital Investment in 2009
In 2009, actual financing of the Federal Grid Company’s
investment programme was RUB 106,043.5 mln, while actual
capital investment in 2009 was RUB 98,208.6 mln, which was
5% higher than 2008.
Implementation of the investment programme in 2009, RUB thousand:
Overall total of investment programme required in 2009
Completed investment at end-2009, including VAT
106,043,500
98,208,600
• Comprehensive reconstruction of the 500-kV Ochakovo substation
The substation is part of the 500-kV Moscow transformer ring,
and its reconstruction resolved the issue of the increasing
shortage of electric energy in the Moscow Region and
connecting new consumers. Transformer power increased
by 1,748 MVA and was 3,650 MVA.
• 220-kV Tataurovo substation autotransformers 1 and 2, capacitor bank
The technical re-equipment of the substation increased
reliability of the electricity supply to consumers in the Baikal,
Barguzinsky and Kurumkansky regions in the Republic of
Buryatia, including the East Siberian railway, and has enabled
the possibility of developing the infrastructure of the tourist
areas along the shores of Lake Baikal.
• 220-kV Oznachennoe (Beya)-Askiz overhead transmission line
The work became necessary following the intense electric
energy conditions in the Khakassia power system in the wake
of the accident at Sayano-Shushenskaya HPP. Activation of
the new transmission lines significantly reduced the risk of
having to limit electricy supply to the republics of Khakassia
and Tyva with a total population of 850,000.
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creation of new electric-furnace steelmaking at the Pervouralsk
new-pipe and Nizhneserginsky metal and metallurgical
plants, as well as an increase in power at the Revdinsky metal
and metallurgical and Sredneuralsk copper-smelting plants.
The new power facility meets the requirements of these
metallurgical companies, which, in line with their growth, will
be 400 MW. Additionally, the Emelino substation has helped
reduce the burden on the 500-kV Yuzhny substation, which
is Yekaterinburg’s main one and is currently working at full
capacity.
• The 500-kV Peresvet substation with the 500-kV Surgutskaya GRES-2-Ilkovskaya
overhead transmission lines and the 220-kV overhead transmission lines. 500-kV
Somkinskaya-Peresvet overhead transmission lines.
When the substation was constructed, the reliability of the
electricity supply to the companies on the right embankment
of the Priobsky and Lyantorsky fields of Surgutneftegaz rose
significantly. New transformer power also optimises the
load at the 500-kV Somkinskaya substation, which currently
exceeds the normal indicator by 30-35%.
• Reconstruction of the 220-kV Slavyanskaya substation. Installation of the АТ-2
Commissioning of the additional power increased reliability
of the electricity supply to consumers (among whom are
Slavyansky Clothes Factory , Slavyansky Cannery, Slavyansky
Creamery, Slavyansky Cereal Products and others) in the
Slavyansky Region of the Krasnodar Territory with a total
population of 135,000, as well as the Anastasievsko-Troitsky
oil and gas field.
Comparative data on capacity increases for the past three
completed fiscal years are presented in the following charts:
Transmission line length increase, km
1,047
769.6
591.8
2007
2008
2009
Transformer capacity increase, МVA
10,394
6,351
6,096.6
2007
2008
2009
Reactive capcity increase, MVAR
1,768
1,285
540
2007
2008
2009
Metal towers were used for the
first time with the East-Volkhov-
North overhead transmission lines
in the North-West Region. The
towers are distinctive, as they
do not require assembly at the
working area, which simplifies
installation significantly.
Investment Programme for 2010–2012
The Federal Grid Company’s 2010–2012
investment
programme was approved by the Russian government in
September 2009, and it is geared toward development
asscociated with
government
programmes, including:
> construction of electricity supply units needed for the 2014
top-priority
fulfilling
Olympic Winter Games in Sochi;
> development of the Far East and Trans-Baikal regions,
including construcion of electricity supply units for the 2012
Asia Pacific Economic Cooperation summit in Vladivostok;
> electricity supply to Transneft units (East Siberia-Pacific
Ocean oil pipeline, Baltic Pipeline System-2);
> delivery of power to power station, foremost to those under
construciton in NPP power-generating units (Kalinin NPP,
Volodonsk NPP);
> elimination of the intersystem limits and of the bottlenecks
in the electric grid (for example, the 500-kV Voskhod-Ishim
overhead transmission lines with the 500-kV Voskhod
substation, the 500-kV Frolovskaya-Shakhty-Rostovskaya
overhead transmission lines with the 500-kV Ростовская
substation and others);
> development of a plan to supply electric energy to the
regions, including Moscow, St Petersburg, West Siberia,
Krasnodar Territory;
> delivery of power from the Boguchanskaya HPP (1,000
MW) start-up facility, which will improve the reliability of the
electricity supply to Siberia in the wake of the interuption in
the power generation of the Sayano-Shushenskaya HPP;
> construction of the Zeiskaya HPP lines at the Russia-China
border to supply electric energy to China;
> fulfillment of contractual obligations signed by RAO UES of
Russia with the administrations of the territorial subjects of
the Russian Federation in those units of the UNEG where
dependability has substantially decreased at this moment
or where there are substatial limitations in the connection
of consumers (for example, the 500-kV Krasnoarmeiskaya
substation, the 220-kV outdoor switch-gear at the 750-
kV Belozerskaya substation, with a transmisson there of
• Installation of the capacitor bank at the 500-kV Oznachennoe substation
The largest consumers of electric energy in the Khakassia
power system are the aluminium smelters, which require both
active and reactive power. When the Sayano-Shushenskaya
HPP could not provide generation, the voltage level in the
electric grid could have dropped sharply, resulting in a
temporary limitation in the electric supply to domestic and
industrial consumers. In order to resolve this issue, Federal
Grid Company installed a capacitor bank at the 500-kV
Oznachennoe substation, which is a source of reactive power
and signficantly increased the reliability of the electricity supply
in the republics of Khakassia and Tyvan with a total population
of 850,000.
• Reconstrucion of the 220-kV East-Volkhov-North
double circuit overhead transmission line
the
the
line
reliability of
Modernising
the
improved
electricity supply to the consumers in the northern regions
of St Petersburg, while the switch to 330 kV increased the
capacity. Following reconstruction, the 330-kV East-Volkhov-
North transmission line became the region’s most advanced
overhead transmission line.
• 500-kV Far East-Vladivostok overhead transmission lines with the 500-kV
Vladivostok substation
Implementing the project eliminated the shortage of electric
energy in the southern area of the Far East power system
and improved the reliability of the power supply to consumers
in the Primorsk Territory. In addition, the new Far East-
Vladivostok transmission line and the 500-kV Vladivostok
substation will become the main source of electricity to the
East Siberia-Pacific Ocean oil pipeline. The line will serve a
group of buildings and technical structures that are slated
for construction in the Primorsk Territory in connection with
the 2012 Asia Pacific Economic Cooperation summit in
Vladivostok.
• 500-kV Emelino substation with 220/500-kV overhead transmission lines
The 500-kV Emelino substation is the most important main
substation in the Yekaterinburg-Pervouralsky power district
of the Sverdlovsk Region, which suffered from a shortage of
electric energy. The substation’s commissiong enabled the
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Federal Grid Company Annual Report 2009
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Financing for the 2010–2012 investment programme, RUB mln
Financing of investment programme areas
Areas of financing
Amount of financing, RUB mln
1. Overall requirement throughout the investment programme
(including additional requirements) (section 2 + section 3 + section 4):
170,952.5
186,326.4 162,083.1
519,362.1
2. Requirement per top-priority sections of the investment programme, including:
72,944.0
84,262.6
81,381.4
238,588.0
Construction units delivering power to NPP, HPP and TPP
14,430.0
32,519.8
30,739.6
77,689.4
2010
2011
2012
Total
for 2010–2012
part of the 220-kV overhead transmission lines with the
500-kV Cherepovetskaya substation, expansion of the
500-kV Crimea substation, the 500-kV Crimea-Centralnaya
overhead transmission lines, the 220-kV Tikhoretskaya-
Vitaminkombinat overhead transmission lines and others).
Financing for the 2010–2012
investment programme, RUB mln
186.3
171.0
162.0
The 2010–2012 investment programme totals RUB 519.4 bln,
and will be financed from Federal Grid Company’s own funds
and funds from the federal budget (including for the Federal
Target Programme for Economic and Social Development
of the Far East and Trans-Baikal up to 2013, as well as the
Electric Grid Development Programme in the Sochi Region),
as well as funds from the sale of RAO UES of Russia assets.
Funds from payments for technological connection, loans
and credit will be earmarked for implementing the investment
programme.
2010
2011
2012
Breakdown of financing for the 2010–2012
investment programme by type of activity, RUB mln
44.9
294.2
180.3
FTP economic and social development of the Far East
and Trans-Baikal up to 2013
Requirements for the units in the 2008–2014 electric grid
development programme for the Sochi region are financed
from Federal Grid Company funds
Design and development work
Renewal of the fixed assets
Construction of units built with funds from technological
connection, including:
2,662.1
0.0
0.0
2,662.1
2,980.3
1,711.6
635.0
635.0
942.2
700.0
5,634.1
1,970.0
32,461.0
33,377.9
39,917.1
105,756.0
Units to improve electricity supply dependability in Moscow, St Petersburg and Tyumen
1,609.6
1,170.0
0.0
19,775.6
16,018.3
9,082.5
44,876.4
2,779.6
Asset development
Technological connection
Technical re-equipment and reconstruction
Technological connection units not included in the other
sections of the investment programme
9,957.4
4,270.9
2,646.1
16,874.4
Units included in the agreements with the Regional Administrations
(except Moscow, St Petersburg and Tyumen)
8,208.6
10,577.4
6,436.4
25,222.4
PREPARATIONS FOR THE 2014 WINTER OLYMPIC GAMES IN SOCHI
Preparation for the dependable
supply of electric energy during
the Winter Olympic games
is one of the main goals of
the Federal Grid Company’s
investment programme.
In total, the Company plans
to construct, upgrade and
reconstruct 21 backbone
electric grid units in the Sochi
Region of the Krasnodar
Territory by 2014.
In 2007-2008, 170 megavolt-
amperes (MVA) of additional
transformer power were added
and 60 km of transmission
lines were built. In 2009,
the Company completed
construction on the first
Olympic units: the 220-kV
Poselkovaya substation with
a capacity of 170 MVA, and
the 220-kV Psou-Poselkovaya
transmission lines with a
length of 60 km. In addition,
ground was broken on the
110-kV Laura and Rosa
Khutor substations, in total,
with a capacity of 160 MVA.
Activation of the substations,
as well as the second circuit of
the 220-kV Psou-Poselkovaya
transmission lines, is slated
for 2010.
At the beginning of 2010,
Federal Grid Company began
construction on the 110-kV
Imeretinskaya and Ice Palace
substations, in total, with
a capacity of 320 MVA. In
the second half of the year,
construction is planned on the
110-kV Veseloe, Vremennaya,
Izmrudnaya and Mymta
substations, in total, with a
capacity of 360 MVA, as well
as 10-kV distribution grids
to supply electricity to the
Rosa Khutor ski resort. Power
supply of the new electric
energy units will come from
the 220-kV Psou substation,
whose capacity will increase
from 300 to 400 MVA by
the end of 2010. In order to
connect the substations as
well as the generation units
(Adlerskaya, Dzhubginskaya
and Kudenstinskaya thermal
power plants) together, there
are plans to build around 100
km of cable and overhead
transmission lines.
Currently, as part of the
investment programme, the
Company is reconstructing the
500-kV Central, and 220-kV
Dagomys and Goryachy
Klyuch substations. Upon
reconstruction completion,
the Krasnodar Territory
electric energy system will
receive an additional 260
MVA of transformer capacity.
Along with this, power will be
supplied to the Stavropolsky
GRES, Inguri HPP and
Adlerskaya TPP in the Sochi
Region electric energy system.
Innovative technical solutions
will be used to construct the
Olympic units: cross-linked
polyethylene-insulated Aerial
cable lines, which will connect
with a 110-kV substation under
construction, will operate
more environmentally friendly,
safely and dependably than
transmission lines.
Use of gas-insulated switch-
gear (GIS) will significantly
reduce the area of substations,
and render their operation more
quiet. The close, compact area
where the GIS is installed will
minimise the impact of the
equipment on the environment
and fully enclose the
equipment from outside effects.
The transmission lines will
have a unique system to thwart
and control icing.
3. Requirement per the remaining sections of the investment programme, including:
84,675.9
86,977.3
72,307.6
243,960.7
Units to improve the reliability of the electricity supply in Moscow, St Petersburg and Tyumen
39,274.2
20,740.4
18,727.4
78,742.0
Units included in the agreements with the Regional Administrations
(except Moscow, St Petersburg and Tyumen)
19,167.6
20,415.9
6,703.6
Development of backbone grids not included in the agreements
17,088.9
36,845.2
32,413.4
46,287.0
86,347.6
Technological connection units not included in the other sections
of the investment programme (Federal Grid Company funds)
591.2
199.5
266.1
1,056.8
Technological management, information system development
and additional target programmes
Infrastructure units
4. Construction of units financed
by federal budget funds, including:
Construction units included in the FTP for the Economic
and Social Development of the Far East and Trans-Baikal by 2013.
Funds come from the federal budget.
Requirements to construct units as part
of the 2008–2014 electric grid development programme for
the Sochi region for the Olympic sport facilities
8,353.9
8,576.3
13,997.1
30,927.3
200.0
200.0
200.0
223.9
13,332.7
15,086.6
8,394.1
36,813.3
6,616.1
12,282.8
8,275.0
27,173.8
6,716.6
2,803.8
119.1
9,639.5
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The largest volume of funds – RUB 105.8 bln – will be
earmarked for the grid complex. There are plans to earmark
RUB 81.5 bln to improve the reliability of the electricity supply
in Moscow, St Petersburg and Tyumen; and RUB 77.7 bln
to construct units to deliver power of generation plants. The
electric grid development programme in the Sochi region
to construct and outfit the Olympic sport facilities, taking
into consideration the needs of the peripheral facilities, will
receive RUB 15.3 bln in financing. To develop the Far East
grids – RUB 29.8 bln.
Overall, within the next three years, construction is planned on:
59 new substations generally installed with a capacity of 31,313
MVA, construction of 70 new high-voltage transmission lines
with a length of 9,170 km, as well as extend the grid by 10%.
Plans for 2010 include the commissioning of 70 units, including
transmission lines with an overall length of 3,823.6 km and 220-
kV substations and higher with a transformer capacity of 9,536
MVA and reactive capacity of 2,100 MVAR, among which are:
> MES Centre - 10 units;
> MES North-West - 7 units;
> MES Volga – 1 unit;
> MES South – 22 units;
> MES Urals – 5 units;
> MES West Siberia – 16 units;
> MES Siberia – 5 units;
> MES East – 4 units.
backbone network is being finished, which will ultimately allow
the Company’s MES branches (including MES subsidiaries)
to communicate and use digital lines of communication at
277 different substations.
The third stage (2011–2013) envisages the creation of a digital
distribution network in order to switch the MES East electric
grid units (69 substations) and North-East (103 substations)
fully to a digital format (digitise). In addition, it is planned to
set up digital lines of communication for the electric grid units
of other regions (184 substations).
At the fourth stage (2014–2015), work on setting up the main
telecommunications platforms of the electric energy industry
is slated for completion, with 86 electric grid units in line to
be digitised.
Structure of UEPTN and Applied Technology
Fiber optic line
A fiber optic line is the main backbone network of the electric
energy industry and is intended to operate the enterprise
resource planning system (ERPS) as well as the technological
systems. The
is
being completed as part of the following investement
programmes:
> comprehensive technological refitting and reconstruction of
fiber-optic communications network
the electric grid units;
> new construction of electric grid units;
> creation of the UEPTN.
The fiber optic line is being created by using a fiber optic
cable suspension on overhead transmission lines. At the same
time, there are plans for the large-scale use of third party
operators, based on long-term cross lease agreements.
Important
investment programme
projects:
Project
Solution
Delivery of power to power
generating unit No. 2 (1,000
MW) Volgodonskaya NPP
delivery date: 2010
Build infrastructure to
increase the power
exchange between the
IPS Centre and Northern
Caucasus
Improve dependability of
IPS Siberia following the
interruption at
Sayano-Shushenskaya HPP
Delivery of power to the
Boguchanskaya HPP
start-up facility, with a
capacity of 1,000 MW (the
220-kV Boguchanskaya
HPP-Razdolinsk overhead
transmission line with
reconstruction and
expansion of the 220-kV
Razdolinsk substation and
construction of the 220-kV
Priangarskaya substation)
delivery date: 2010
Delivery of power to power
generating unit No. 4 (1,000
MW) Kalininskaya NPP
delivery date: 2012
Resolve the issue of the
energy shortage in the
North-West of Moscow
Region
Construction of the
220-kV Neryungrinskaya
GRES-Nizhny Kuranakh-
Tommot-Maiya overhead
transmission line with the
220-kV Tommot substation
and the 220-kV Maiya
substation
delivery date: 2013
Construction of the 500-kV
Zeiskaya HPP-Amurskaya-
state border overhead
transmission line
delivery date: 2013
Deliver electricity supplies to
pipeline units of East Siberia-
Pacific Ocean, develop
electricity supply in Sakha
Republic
Transmit electric energy
to China
Substation 500-kV City-2
(500-kV wing) with the 500-
kV Ochakovo-City-2 cable
transmission line
Supply power to the
Moscow international
business centre, Moscow-
City
delivery date: 2014
Development of IT network
Unified Electrical Power
Technological Network
The latest IT network technology is integral to the production
activity of electric energy companies and the management of the
technological processes throughout the entire grid. Therefore,
Federal Grid Company pays particular attention to creating and
developing a unified electrical power technological network
(UEPTN), dedicated to the interactivity of the companies at all
management levels.
UEPTN is based on the widespread use of up-to-date digital
communication lines and is delivered by the creation of
fiber optic communication networks, radio relay links (RRL),
modernisation of high-frequency communications, expansion
of the sattelite communication system, digital mobile radio,
wavelength-division multiplexing (WDM), synchronous digital
hierarchy (SDH), time division multiplexing (TDM), and Internet
protocol (IP) communications. The technology guarantees the
quality exchange of audio, video and data information.
The creation and updating of the electric grid units
communication lines based on digital technology allows for:
> the functioning of the technology system, centralisation and
efficient technological management of the electric grids;
> corporate telephony, data transfer, as well as video
conferences at the branches of Federal Grid Company;
> the implementation of automated dispatcher, tehcnological
and corporate management systems, respectively;
> set-up of Smart Grid, implementation of “digital substations”;
> the Company communication with other parties on the
electric energy wholesale market.
Strategic Planning for Communication
In 2009, the Company developed a telecommunications
management strategy for 2009–2015. In line with the strategy,
the key goals of managing telecommunication are providing
consumers with reliable service connection, switching the
UEPTN to digital mode, and optimising capital expenditures
to develop the communication network as well as optimising
expenses on operation and modernisation.
The set-up and development of the UEPTN is taking place in
four stages, as per the relevant schedule (General Schedule
of UEPTN Set-up and Development until 2015) approved
by Federal Grid Company’s Management Board and the
Government Commission. The first stage was completed
from 2005 to 2008, and involved setting up a digital backbone
network for Federal Grid Company based on proprietary
telecommunications platforms, as well as setting up of a unified
electrical power digital network (UEPDN) on leased circuits.
At the second stage (2009–2010), the digital communications
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Business Overview
Planned scheme of the fiber optic line for Federal Grid
Company for the period ending 2015
Yamburg
Urengoy
Salekhard
Pechora
Nadym
Tarkoye-Sale
Kholmogory
Noyabrsk
Sosva
Khanty-Mansiysk
Surgut
Nizhnevartovsk
Perm
Nizhny Tagil
Tobolsk
Izhevsk
Knyazhevo
Tyumen
Vladimir
Arzamas
Ryazan
Saransk
Kazan
Ekatirinburg
Cheboksary
N.Chelny
Ufa
Ulyanovsk
Chelyabinsk
Kurgan
Sterlitamak
Beloretsk
Magnitogorsk
Orsk
Razdolinsk
Boguchany
Ust-Ilimsk
Kemerovo
Taras
Novosibirsk
Tomsk
Krasnoyarsk
Taishet
Nizhneudinsk
Tulun
Bratsk
Severobaykalsk
Yakutsk
Kuranakh
Nerungi
Tynda
Omsk
Barabinsk
Karasuk
Barnaul
Novokuznetsk
Abakan
Minusinsk
Biysk
Choya
Rubtsovsk
Gorno-Altaysk
Sayanogorsk
Kyzyl
Zima
Angarsk
Mogocha
Skovorodino
Irkutsk
Kholobon
Magdagachi
Mysovaya
Ulan-Ude
Gusinoozersk
Petrovsk-Zabaikalsky
Чита
Svobodny
Blagoveschensk
Komsomolsk-na-Amure
Belogorsk
Bureya
Completed construction: 5,931 km
Slated for completion from 2009–2010: 25,633 km
Slated for completion from 2011–2015
Sovetskaya Gavan
Khabarovsk
Birobidzhan
Luchegorsk
Ussuriysk
Artem
Vladivostok
Nakhodka
Murmansk
Loukhi
Severodvinsk
Arkhangelsk
Petrozavodsk
Syktyvkar
Vyborg
Kingisepp
St. Petersburg
Cherepovets
Vologda
V.Novgorod
Galich
Rybinsk
Manturovo
Kirov
Pskov
Bologoye
Udomlya
Tver
Rzhev
Yaroslavl
Kostorma
Votkinsk
Ivanovo
Yoshkar-Ola
Moscow
N.Novgorod
Vyazma
Smolensk
Kaluga
Bryansk
Orel
Tula
Lipetsk
Tambov
Syzran
Penza
Samara
Kursk
Voronezh
Saratov
Orenburg
Belgorod
S. Oskol
Frolovo
Shakhty
Taganrog
Rostov-na-Donu
Tikhoretsk
Krasnodar
Novorossiysk
Sochi
Cherkessk
Volgograd
Volgodonsk
Elista
Astrakhan
Stavropol
Yuzhno-Sukhumsk
Pyatigorsk
Vladikavkaz
Nazran
Grozny
Makhachkala
Derbent
In 2009, the following fiber optic line delevopment steps were
taken:
> work was completed on setting up the digital
communication systems (DCS) using fiber optics
obtained for the right of passage via the electric energy
infrastructure on the territory of Chelyabinsk-Krasnoyarsk
and Khabarovsk-Vladivostok (fiber-optic line drivers 1 and 3
of Chelyabinsk-Novosibirsk-Taishet-Vladivostok);
> construction was completed on fiber optic line as part of the
fiber optic line driver 5 of Chelyabinsk-Novosibirsk-Taishet-
Vladivostok on the territories of 500-kV Zarya substation,
500-kV Yurga substation, 500-kV Novo-Anzherskaya
substation, and 1,150-kV Itatskaya substation;
> work was completed on setting up the DCS as part of the
fiber optic line driver 1 of Moscow-Rostov-on-Don on the
territory of Moscow-Tambov-Samara and the fiber optic line
of Samara-Chelyabinsk;
> open tenders were held to select a contractor to set up the
DCS as part of 2, 3 and 4 fiber optic line drivers of Moscow-
Rostov-on-Don. Construction is slated for completion in the
first quarter of 2011.
> open tenders were held to select a design company to
create fiber-optic lines along:
– Surgut-Khanty-Mansiisk;
– Surgut-Nizhnevartovsk, Surgut-Noyabrsk;
– Surgut-Tyumen;
– Samara-Orenburg;
– Tikhoretsk-Salsk;
– Nevinnomyssk-Pyatigorsk-Vladikavkaz;
– Kostroma-Kirov;
– Vologda-Archangelsk;
– Razdolinsk-Nazarovskaya GRES.
Design documentaton development and
implementation are slated for 3-4 quarters of 2010.
the start of
In 2009, permission to use the radio frequency or radio frequency
channels was extended and reissued for the VHF radio facilities
of the line maintenance service in three areas: Vladimir Region,
the Republic of Karelia, and the Republic of Komi.
Radio relay network
The radio relay network is used in the backbone and
distribution networks to record the UEPTN, either mainly
where it is not economically sensible to install a fiber optic line
or where a telecommunication network is required urgently.
In 2009, permission was received to use the radio frequency
or radio frequency channels for the radio relay network,
when setting up “the last mile” of the UEPTN in a number
of areas: Bryansk, Vladimir, the Republic of Dagestan, the
Republic of Kalmykia, the Republic of Karachevo-Cherkesia,
the Republic of Karelia, Syktyvkar. Permission was reissued
to use the radio frequency or radio frequency channels for
further use in the UEPTN of the radio realy connection in eight
cities and regions: Barnaul, Belgorod Region, Krasnodar
Territory, the Republic of Komi, Tver, Udmurt Republic, and
Khanty-Mansiysk autonomous region.
In 2010, there are plans to upgrade the radio relay
communication lines either by digitising them or replacing
them with fiber-optic lines.
Satellite network
The transmission of telemechanics and voice data via the
satellite network improves reliability and observability of the
electric grid units. The satellite network has been built using
terminals installed at all of the 220-kV grid units, as well as
at a number of the Federal Grid Company’s GMC and at the
distpatcher centres of System Operator in the area of MES
Siberia operational responsibility.
By the end of 2010, the total length of the backbone and
distribution fiber-optic lines will be 26,564 km, of which:
> 14,964 km – own construction;
> 7,000 km – resources obtianed by right of passage via
In 2009, the UEPTN Coordinating Board approved the main
development principles and areas of the satellite network,
based on VSAT technology, such as:
> strict quality control of the satellite network channel
the transmission line;
indicators;
> 4,600 km – resources leased from third parties.
> transfer of the VSAT-based satellite network channels to
Mobile radio network
is
intended
for operational
The mobile radio network
service, emergency repair teams and setting up alternate
lines of communication. In 2009, construction continued on
the TETRA-standard networks in the Moscow and Nizhny
Novgorod regions. In 2010–2011, a TETRA-standard network
will be commissioned in Moscow, St Petersburg, Nizhny
Novgorod and the Nizhny Novgorod region, as well as in the
Chuvash Republic.
reserve, following implementation of fixed links;
> regional development of the satellite network, based on one
operator and a single technology;
> improvement of the operation technology.
In 2010, as part of Federal Grid Company’s transferring to
a new efficient process-management concept for the UNEG
units, digital communication channels are slated to be set up
in the zones of MES Centre, North-West, West Siberia, East
and Urals, respectively, operational responsibility, based on
the satellite network.
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Federal Grid Company Annual Report 2009
Business Overview
65
Federal Grid Company Annual Report 2009
Business Overview
Carrier communication system (CCS) along transmission lines
CSS is currently the main telecommunication network delivering
dispatcher phone connection, transmitting telemechanics
data, processing automated measuring and information
systems for electric energy fiscal accounting (AMIS EPFA), and
transmitting RPCE and RPEC systems. This is a specific type of
wire connection that uses phase conductors and suspension
strands of overhead transmission lines or electric conductors
and covers of cable transmission lines to transmit signals
In recent years in Russia, multifunctional equipment has
appeared that integrates voice, data, and command
signal transmissions. Each CSS of 8 kHz frequency can
reach two-way transmission of 64 kBps. IP development,
especially for CSS via high-voltage overhead transmission
lines, signficantly improves transmission capacity. Today,
technology is being developed to increase bandwidth and,
consequently, transmission speed up to 256 kBps.
Clearly, CSS via overhead transmission lines have to be
upgraded. The goal of reconstruction is to replace obsolete
and undependable equipment with new digital versions that
meet up-to-date requirements and fit in the overall framework
of the unified technological network for electric energy
connection UEPTN. The main principles and development
direction of the CSS lines were approved in 2009 by the
Coordinating Board on UEPTN.
Information on the activation of CSS is presented in the
following table:
Federal Grid Company
Total CCS
Total CCS
Total CCS
Total CCS
branches
MES Centre
MES Volga
MES South
MES Siberia
MES Urals
MES West Siberia
MES North-West
MES East
Total
installed in 2009
as on 01.01.2010
hooked up in 2009
as on 01.01.2010
24
52
-
36
256
-
236
-
634
882
340
229
838
1,556
513
982
364
5,704
19
93
-
60
259
-
601
-
1 032
880
414
288
1,206
1,927
594
1,556
641
7,506
Business-process management
systems launched as part of the
ERPS project:
• Automated maintenance and
repair systems, including
Company Assets Registry;
• software for calculating balance
and loss;
• software to calculate
microelectronic protection
settings;
• software to coordinate the
shutdown of electric energy (DE
Tender);
• automatic request system for
technological connection;
• accounting, tax accounting and
reporting AS;
• planning and budgeting AS;
• Company property management
AS;
• automated purchasing system;
• e-trading floor;
• personnel management system;
• payroll system;
• key performance indicator (KPI)
management system;
• document management AS;
• corporate portal.
A number of systems are at the
experimental stage, including:
• Asset Management System
(AMS);
• Information analysis system for
electric energy accounting and
calculating.
Telecommunication network
The electric energy telecommunication network provides
reliable lines of communication for the dispatcher and the
administration of electric energy services. The network has
been built on the hub principle and delivers intercommunication
with System Operator.
The main aim of moderising the telecommunications network
is to create an electric grid backbone control network by
gradually moving from an analog-digital network to a fully
digital one. In addition to other integrations, development of the
telecommunications network envisages the implementation
of VoIP technology, as well as bringing into use commutation
equipment that allows for radio access on individual lines.
In addition, updating the network involves implementing new
management principles and maintenance systems.
In 2010, the latest technology is slated to be integrated into
the electric grid units as part of the new construction, re-
equipment and reconstruction programmes.
Management Systems
Enterprise resource planning system (ERPS)
ERPS is an automated business-process and technological
management system (AS). As part of the business-process
management system, ERPS is built as a centralised system
to provide users remote access to the resources of the
unified Storage and Data Processing Centre. As part of the
technological management system, ERPS is an infrastructure
comprised of a set of various interconnected application
systems across many regions. At the same time, ERPS
closely interconnects the automated business-process and
technological management systems.
In 2009, the following steps were taken as part of the ERPS
project:
> As part of the mySAP Business Suite- and SAP
BusinessObjects-based repair and maintenance
management AS:
– an application was implemented for planning and
accounting management (first stage);
– a number of new module systems to automate
the workstations of key substation personnel were
developed.
> AS for design documentation archive was developed; the
system was pilot tested;
> installation software packages to detect the location of
damage on transmission lines were developed;
> Personnel Management subsystem was updated to SAP
ERP 6.0;
> transfer of the Company’s branches to SAP-based software
to calculate employee salaries using a single planning and
record of working time method was completed;
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Federal Grid Company Annual Report 2009
Business Overview
67
Federal Grid Company Annual Report 2009
Business Overview
technological management;
Automated measuring and information system
> put the 1st phase of the telemetry and SCADA H&SP
for electric energy fiscal accounting (AMIS EPFA)
system in commercial operation;
> design the 2nd phase of the telemetry and SCADA system
AMIS EPFA is one of the key automated management systems
integrated in the ATMS package.
with the application systems;
> put technical processes monitoring and management
packages in commercial operation at six of Federal Grid
Company’s pilot units;
In 2009, development of the system, which began in 2006,
continued, specifically:
> the first and second AMIS EPFA package launches
> implement the Stage 2 DMIP projects to upgrade the
telemechanics and transmission of information systems at
the UNEG units (153 substations);
> implement the Stage 3 DMIP (247 substations) projects to
upgrade the teleautomatic and transmission of information
systems.
were accepted for commercial operation at the UNEG
substations;
> designs to replace the current and voltage measuring
transformers and upgrading of the secondary circuits
not adhering to the requirements of the electric energy
wholesale market for 330 - 1,150-kV substations were
developed;
> designs to expand the information compilation system for
330 - 1,150-kV substations were developed;
> a partial spot-check of the current and voltage measuring
transformers at the 220-kV substations was conducted;
> tests of the operating capacity of the software package for
the automated revenue metering data compilation system
along the border of the UNEG were conducted.
In 2010, the following work is in the pipeline:
> accept the third AMIS EPFA package launch for
commercial operation at the UNEG substations and the
system as a whole;
> continue inspection of the current and voltage measuring
transformers at the 220-kV substations;
> conduct design and development work to replace and
install the current and voltage measuring transformers at the
220-kV substations;
> conduct construction and installation work to install and
replace the current and voltage measuring transformers at
the 330 - 1,150-kV substations.
> a single automated accounting system for Federal Grid
Automated technological management system (ATMS)
Company and its branches was developed to consolidate
all financial activity into a single information system on the
SAP ERP platform. The system was prepared for operation
by 01.01.2010;
ATMS is being created as a single distribution hierarchical
system to integrate the facilities and subsystems of the existing
and independently developing automatic and automated
management systems.
> work started on the preparation and release of the first
automated investment management system for productive
operation from the beginning of the second quarter of 2010.
Additonally, an information security audit was conducted at
the Company’s executive body units, resulting in an action
plan to improve the security level of the information and
telecommunications infrastructure.
For 2010, solutions are in the pipeline for the following top-
priority goals to develop ERPS:
> set up the Company holistic IT strategy in accordance with
the latest business requirements;
> create a Reserve Centre to process data;
> implement a single automated accounting system, as well
as develop its functionality;
These systems include: APMS, telemetry and SCADA
(supervisory control and (technological) data acquisition)
system, automated dispatch and technological management
system (ADTMS), AMIS EPFA, RPEC, and other technological
subsystems as well as ERPS subsystems.
ATMS is based on the UNEG centre for information
management (CIM) and the integrated information exchange
model (IEM), which uses an ATMS hardware and software
package (H&SP).
In 2009, the following work was conducted in this area:
> source data necessary to create the single information
system of the UNEG were compiled and processed;
> the second start-up grid management centre (GMC) of
> implement an automated investment activity management
North-West (ADTMS) was tested;
system, as first, second, and third releases;
> set up a single classifier for materials and technical
resources and equipment of the Company;
> implement planning applications and records of work
fulfilled using own resources (second stage);
> distribute maintenance and repair management AS;
> distribute design and estimate documentation archive AS;
> develop a programme to select the operation parameters of
the RPCE and dead-end transmission lines;
> create a wage expenditure planning subsystem;
> expand the functionality of the ERPS purchasing system;
> create and integrate in commercial operation an automated
record-keeping system for the electric grid units as part of
the UNEG registry;
> further develop the automatic request system for
technological connection;
> further grow ERPS resources in accordance with the
requirements of the automated systems;
> implement a project package to ensure ERPS information
safety.
> a set of operations were completed to create the first phase
of the H&SP telemetry and SCADA system, encompassing
17 substations equipped with APMS and management
centres (GMC, MES and the Federal Grid Company
information agency); developed and approved the technical
goal for project development of the second phase;
> H&SP for APMS units, created as part of the programmes
to renovate the main assets and for new construction of the
UNEG units, was launched at 51 substations;
> the dependability and monitoring improvement programme
(DMIP) was updated in accordance with Federal Grid
Company’s priorities;
> technical process monitoring and mangement packages
were put in commercial operation at six of the Company’s
pilot units;
> systems to compile and transfer information were put in
commercial operation at 20 substations of MES North-West
(as part of the Stage 1 DMIP);
> designs to upgrade the telemechanics and transmission of
infromation throughout the units of the Stage 2 DMIP (153
substations) were finished.
For 2010, the following goals have been set:
> complete work on setting up the single information system
of the UNEG and system-level ATMS H&SP and put it in
commercial operation;
> put the 2nd H&SP package launch in commercial operation
at the North-West GMC and complete work on the 3rd
package launch;
> develop and complete the pilot projects to set up the
Priokskoe GMC and MES Kuzbasskoe subsidiary, taking
into account the implementation of the operation and
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Federal Grid Company Annual Report 2009
Business Overview
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Federal Grid Company Annual Report 2009
Business Overview
4–4. COMMERCIAL AND OPERATING ACTIVITY
Tariff Regulation
Electric energy transmission to consumers via the UNEG is a
natural monopoly, thus tariffs are set according to government
regulation.
In December 2009, as per the order of the FTS, the long-term
regulation (2010–2012) of tariffs, based on the return on invested
capital method, were approved for electric energy transmission
services rendered by Federal Grid Company via the UNEG. The
following tariff rates for electric energy transmission via the UNEG
have been set for the next three years*:
Federal Grid Company tariffs approved up to 2009 for
the transmission of electric energy via the UNEG were
calculated using a cost-plus method. Tariffs covered
Company expenditures to support the networks and a profit
level necessary to finance the investment programme. Loss
of electric energy during transmission via the grids was
compensated through the tariffs of the Federal Tariff Service
(FTS), which were adjusted as per the territorial subjects of
the Russian Federation.
Year
Tariff for electric energy transmission Tariff
within the electric grid,
increase,
2007
2008
2009
RUB MW/month
44,072.09
48,170.26
58,159.01
%
9.6
9.3
20.7
Federal Law No. 35-FL of the Russian Federation, titled On the
Electric energy Industry, stipulates a switch to the Regulatory
Asset Base regulation, or RAB, method of tariff regulation. The
main principle of RAB regulation is that the capital invested in a
natural monopoly should generate enough return to attract new
investment and develop the enterprise, as well as correspond
to the level of investment risk. The procedure to set tariffs using
RAB regulation encompasses declaring operating expenses,
determining the amount of investment and setting the rate of return
on investment. This tariff regulation system guarantees investors
a return on their investment, while also delivering reliable service
in correlation to the tariff level, which attracts investment in the
industry and qualitatively improves operations within it.
In accordance with law No. 261-FL, dated 23.11.2009, as on
01.01.2010, Federal Grid Company has switched to long-term
tariff regulation using RAB regulation.
Year
2010
2011
2012
Tariff amount,
Tariff increase versus
RUB MW/month
previous year, %
87,868.77
116,733.72
145,591.13
51.1%
32.85%
24.72%
*For all regions of the Russian Federation except North Caucasus and
Stavropol regions. For the republics of North Caucasus, as well as for
Stavropol region, the tariff is set at 37,845.23 RUB/ MW per month for 2010,
50,277.42 RUB/ MW per month for 2011, and 62,706.36 RUB/ MW per
month for 2012. The increase in tariffs for electric energy transmission via
the UNEG will be 49.2% in 2010, 32.85% in 2011, and 24.72% in 2012.
Previously, the FTS confirmed the rate of return on the
Company’s new invested capital in the first long-term, three-
year new-tariff regulation period. The return on new capital
has been approved at 11%.
Over the next three years, the following main tariff regulation
indicators have been set for return on invested capital of
Federal Grid Company:
Cost Optimisation
The sharp global financial downturn of 2008 put into stark
relief the need for cost-optimising measures at Federal
Grid Company. The Company's strategic priority of reliably
operating the UNEG while reducing costs was reflected in
the Comprehensive Cost-Cutting Programme in 2009. The
programme’s main objectives included:
> Achieving savings in 2009 by bringing the UNEG
technology in line with world standards through extensive
use of modern equipment and solutions;
> Improving efficiency by cutting operational and running
costs, reducing energy losses in the grid, and implementing
innovative approaches in the operation, service and
maintenance of the grid;
> Retaining the qualified specialists required to keep the
business running while at the same time optimizing payroll
costs;
> Reducing administrative costs by implementing process-
management systems.
The Company has implemented a series of cost-optimising steps
aimed at improving operational efficiency, reducing operational
and administrative overheads and optimizing the spending
structure. These measures enabled Federal Grid Company to
achieve savings of 3% (RUB 1.74 bln) in 2009 compared to
budget projections.
№
1.
2.
3.
4.
Indicator
2010
2011
2012
Operational and administrative spending cuts in 2009:
Depreciated value of
invested capital as on
01.01.2010, RUB bln
Return on existing
capital as on
01.01.2010, %
Return on new
invested capital, %
Period of
return, years
647.6
3.9%
5.2%
6.5%
Overall costs and spending on administration
As on 01.01.2009 (RUB thousand)
As on 31.12.2009 (RUB thousand)
58,149,296*
56,414,314*
* Expenses on administration in 2009 are different from the actual
administrative costs by the amount of payment for energy services to cover
for energy loss (RUB 13,433 mln), and by the amount of taxes on other
11%
11%
11%
expenses (RUB 639 mln).
35
35
35
The new tariff regulation fosters conditions to attract capital
for the development and support of the Company’s assets, as
well as provides a financial incentive to improve the quality of
customer service and efficiency of operations. RAB regulation
directly correlates profits with the reliability of the electricity
supply and the level of customer service. Based on the reliability
and quality indicators, Company revenues will be adjusted in the
+/- 3% range.
Key savings
Savings
mechanisms
areas:
Tangible costs – RUB 40,396,700
Savings resulting from a competitive supply process
Repair and maintenance costs – RUB 749,373,700
Savings achieved through competitive supply process
Payroll (including the unified social tax
and corporation tax) – RUB 431,604,900
Savings achieved by optimizing staff numbers
Running costs – RUB 513,607,700
Savings achieved by reducing spending on property
maintenance and other running costs through competitive
supply process and other cost-optimising measures.
Procurement
Procurement Management
Federal Grid Company conducted all procurements in 2009
in accordance with the Federal Grid Company Provision on
Regulated Procurement of Goods and Services, approved
in 2005. In May 2007, in February 2008, and then in July
2009, the Company's Board of Directors approved the
most recent revisions to the document. The Provision sets
out a uniform procedure for the procurement of goods and
services, which relies on modern, competitive forms of
sourcing, predominantly on the basis of open competition.
The procedure complies with the requirements specified
in the Russian Federal Government’s regulation No. 1158,
dated 13.10.1999, titled On Enforcement of the Economically
Sound Principles of Product (Services) Pricing by Natural
Monopolies.
The uniform procurement procedure helps ensure the
efficient spending of funds as intended, as well as secure,
economically sound and competitive prices from the suppliers.
This procedure is based on the following basic principles:
• Transparency
The procurement procedure is set out on the corporate website.
Information about any departures from this procedure can
be sent to the Company’s Central Tender Committee (CTC).
The list of CTC members is also available on the website. It
includes representatives of the Energy Ministry and the Federal
Antimonopoly Service. Therefore, all decisions made by the
commission are in line with the position of the government. The
annual procurement programme is published on the corporate
website and on the TZS-Elektra electronic trading site. A
considerable share of the contracts is awarded through open
tenders and other forms of open competition. Bids for these
contracts are solicited via the corporate website, the electronic
trading site and the mass media.
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Federal Grid Company Annual Report 2009
Business Overview
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Federal Grid Company Annual Report 2009
Business Overview
• Competition
The procurement system is designed to give preference to
open bidding, ensuring that the best offer wins. Any decision to
restrict the competitive process requires serious substantiation
and the approval of the Company’s regulatory bodies. Any
decision to award a supply contract on the basis of single
sourcing requires authorization.
• Substantiation
The procurement procedure requires every decision to be
substantiated and delivered in writing, which helps to make
the process more efficient and restricts the preconditions for
corruption.
The Provision on the Regulated Purchase of Goods and
Services for Federal Grid Company allows for the following
sourcing procedures:
Procedure
Open
competition
Open request
for proposal
Open request
for price offer
Application
The most preferable method,
used by default.
Can be used for supply contracts of less than
RUB 10 mln, including VAT, mostly for straightforward
products and services.
Can be used for contracts of less than RUB 5 mln,
including VAT, mostly for straightforward
products and services.
Open competitive
Can be used for very complex
negotiations
equipment and services.
Single sourcing
The decision about the choice of supplier
The system can be used for:
> open/closed one-stage competition;
> open /closed one-stage competition for the right to sign a
framework agreement;
> open /closed one-stage competition with a preliminary
qualification round;
> open /closed request for proposal;
> open /closed request for price;
> tender.
The platform for each procurement procedure is chosen by
the Company’s regulatory bodies during the procurement
planning stage as part of the Annual Comprehensive
Procurement Programme (ACPP). Detailed information about
TZS-Elektra can be found in the Procurement section of the
corporate website.
The ACPP is drafted by various departments of the Company's
administrative office and its branches. The draft is then
finalised using the procedure outlined in Annex 6 to the
Provision on Regulated Purchases of Goods and Services.
The finalised draft is then submitted for the approval of the
Company's regulatory bodies, including the standing tender
commissions and the Central Tender Commission, as per
their individual remit.
The ACPP specifies the time frame and the exact procedure
of choosing the supplier for each procurement contract to
be signed during the year. The document is available in the
Procurement section of the corporate website. The following
is the summary of Federal Grid Company's procurement in
2009:
is taken by the Central Procurement Department
of the corporation based on market analysis
done by the customer.
Competitive procurement
Share of each regulated procurement
method in the 2009 total (%)
0.18
13.02
7.58
37.93
40.43
0.86
OT - open tender
OCP - open competitive procurement
ORPp - open request for proposal
CRPp - closed request for proposal
OCN - open competitive negotiations
SS - single sourcing
Share of each regulated procurement method
in the 2010 total (projected) (%)
87.95
4.29
6.00
1.76
Closed procedures
Can be used only if direct talks with possible
suppliers are required to ensure confidentiality
in the interests of the customer.
Contracts awarded
Volume,
RUB thousand
Share of total
procurement, %
OT - open tender
OCP - open competitive procurement
ORPp - open request for proposal
SS - single sourcing
The circumstances under which each of the above procedures
might be applicable are listed in Chapter 7 of the Provision,
which is available on the Federal Grid Company website.
TZS-Elektra Electronic System
for Competitive Procurement
The Federal Grid Company Central Tender Commission
has approved TZS-Elektra as the electronic trading site
recommended for use. The system is designed to facilitate
competitive and regulated non-competitive purchases using
Internet technology.
on a competitive basis
49,550,834
59.6
Abbreviations used in the diagram:
OT – open tender
CRPp – closed request for proposal
ORPp – open request for proposal
CRPr – closed request for price
PCN – private competitive negotiations
OCN – open competitive negotiations
CT – closed tender
ORPr – open request for price
OCP – open competitive procurement
SS – single sourcing
Key priorities of corporate procurement policy in 2010:
> Reducing costs by achieving savings on the procurement
programme;
> Making sure that deliveries under the supply contracts
awarded by Federal Grid Company and other grid
companies are:
– up to the specified quality standards;
– priced competitively;
– delivered on schedule.
> Using best practices to achieve further improvements in the
procurement system.
Import Replacement Policy
Import replacement is an economic strategy aimed at
replacing imports that are in high demand in the domestic
market with domestically produced goods. The social and
economic goal of this strategy is to create jobs and keep
added value in Russia, as well as to foster innovation.
In 2009, about 30% of the electrical equipment used in the
construction or refurbishment of grid facilities was Russian-
made.
Federal Grid Company has identified the following ways
of implementing the national import replacement policy in
electrical-equipment manufacturing:
> Increasing the number of Russian manufacturing facilities
that meet all the latest requirements;
> Substituting imports with equipment assembled in Russia
from imported components;
> Setting up joint ventures or signing licensing deals with
leading foreign manufacturers;
> "From an idea to a sale" (innovation model) - design and
production of equipment by introducing cutting-edge
technologies:
– Developing Smart Grids and using them to
formulate new technical requirements and
specifications for designing new equipment,
materials, technologies and systems, as well as
upgrading the existing technology;
– Launching a sustained R&D effort in new
innovative areas of the electrical-equipment
sphere.
the Company’s
Federal Grid Company is developing an import replacement
programme that aims to give Russia's electrical-equipment
industry a boost and increase the share of Russian suppliers
in
investment programme. The
programme planned until 2020, which is designed to rely on
the Electrical Equipment Production Centres, includes three
sub-programmes:
> Short-term – for the period until 2012. This component relies
on making greater use of Russian-made equipment which
large
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Business Overview
As per the agreements signed with Federal Grid Company,
these manufacturers undertake to ensure high standards of
service and maintenance of their equipment, maintain an
emergency stock of their products, and train Federal Grid
Company staff in their use. The agreements will also facilitate
prompt exchange of information in the event of potential or
actual emergencies at energy grid facilities resulting from any
problems with these suppliers’ equipment.
For its part, Federal Grid Company has declared its
willingness to purchase these suppliers’ electrical equipment
on a competitive basis and in compliance with the corporate
procurement procedures. The Company will also consider
participating in the domestic manufacturers’ investment
programmes aimed at upgrading their technology and
boosting their R&D capacity.
cooperation with domestic
the Company’s programme
The goals pursued by
of
electrical-equipment
manufacturers and R&D facilities include facilitating the
development of the Russian electrical-equipment sector,
improving its competitiveness and reducing the Russian
energy grid’s dependence on foreign suppliers. The national
manufacturers will be able to channel the proceeds from
the Federal Grid Company supply contracts upgrading their
technology, developing their model range and creating new
jobs.
is already being mass-produced and has obtained industrial
certification, as well as broadening the range of services
offered by the Russian manufacturers;
> Mid-term – until 2015. Bringing the specifications of
Russian-made equipment up to world standards in those
areas where the domestic manufacturers are lagging
behind; setting up joint ventures and licensed production
facilities;
> Long-term - until 2020. Developing new innovative
technologies which surpass all the current Russian
offerings, and launching their mass production.
In 2009, Federal Grid Company launched a programme
of setting up new technology centres, which will develop
and implement innovative solutions for the electricity grid in
five Russian regions (St Petersburg, Moscow, Novosibirsk,
Samara and Yekaterinburg). Five meetings and discussions
have been held with manufacturers in those regions. They
have resulted in the signing of the following cooperation
agreements:
> In the North-West Region with: NII ZAI, NF-Energo,
Novaya Era, Elektroapparat, Pozitron, Sevkabel, Energy
Mechanics Plant, SK Impuls, Elektronmash, and NPO
Strimer;
> In the Urals Region with: Energomash (Yekaterinburg)
- Uralelektrotyazhmash, YuAIZ, SverdlovElektro Group,
Promenergo, ELIZ, Kirskabel, High Voltage Union,
UralEnergoService, Electrochemical Equipment
Combine FGUP, Sverdlovsk Electrical Transformer Plant,
Yu.M.E.K., Intera, Prosoft-Sistemy, Areva Transmission
and Distribution;
> In the Volga Region with: Tsvetlit, Saranskabel, Konvertor,
NPP Kontakt, Electroshield - TM Samara Companies
Group, Orbita, Electrovypryamitel, NPP Ekra, Samara
Cable Company, ABB Avtomatizatsiya, Chuvashkabel
Plant, VNIIR;
> In the Siberia Region with: NAIZ, ELSI, Fenix-88, Polymer
Insulator, EMA, Kometa-Energomash;
> In the Central Region with: Elektrozavod Holding,
Eurocontract High Voltage Equipment, Soyuz High
Voltage Equipment, Moscow Plant Electroshield, Radius
Avtomatika, ROSIZOL, Gidromontazh Experimental,
Enercomservis R&D, RETZ Energia, Energo GBI,
Muromenergomash, Konvertor, Energostalkonstruktsia,
Elektrokabel Kolchuginskiy, Serpukhov Capacitor,
Stroienergoservis-Kovrov, and Amper.
Risk Management
Federal Grid Company currently identifies the following main
risks:
State Regulation of Tariffs on Services
Delivered by the Company
As a result of the government of the Russian Federation
restricting tariff increases on the output and services offered
by natural monopolies, there are risks that the regulatory
authorities could set rates at levels lower than those that
would be considered economically viable. Consequently,
the Company manages risks associated with tariff regulation
by interacting closely with the regulatory authorities, when
establishing the economic viability of tariff rates, as well as
by working with the players in the electric energy market as
part of the non-profit partnership Market Council Non-profit
Partnership (NPP).
Production Risks
Risks associated with physical deterioration, misuse and
abuse and critical parameter changes in the operation of
the power supply grid could cause breakdowns (accidents)
and structure collapses. System-related accidents could
result in power-system separation, rolling blackouts, and
heavy overuse. The intensive operation of the main power
supply grid results in an accelerated aging process. Thus,
the deteriorated and obsolete condition of the facilities is the
main cause of production risks.
In order to prevent the negative impact of these factors,
the Company has developed an investment programme
for two reasons: to implement a technical re-equipping
and reconstruction programme to warn when there is a
malfunction of the high-voltage power line and substation
main technological facilities; and to set up new production
facilities to ensure delivery of power to electric power
plant and the reliability of interregional transmission of
electricity. Risks associated with decreasing the amount of
the investment programme could at a minimum result in a
decrease in expenditures while retaining the operating level;
and they could require a maximum of optimising expenditures
by altering the operation means, meaning a partial transfer
of non-competitive operations to competitive ones. In May
2009, Order No. 691 of the Russian Federation Government,
dated 19.05.2009, titled On Approving the Competitive
Development Programme in the Russian Federation and the
Action Plan for Implementation for 2009–2012, was approved.
It is assumed that the measures stipulated in the order will
simplify the procedure for administrative control over the
operations of natural monopolies, including the business of
the Company.
Technological Risks
In terms of technological risks, the most substantial factors
to consider are the sparsely populated, expansive territory
across which the power lines stretch as well as the possible
occurrence of an unfavourable, force-majeure, physical
impact. In the event of an unfavourable physical impact, the
Company has a corresponding insurance policy on overhead
transmission lines and substations. Furthermore, in order to
prevent technological interruptions and emergencies, the
following steps have been taken:
> Federal Grid Company has implemented a new
management system for operation and repairs;
> Resurgence of the Federal Grid Company Chief Engineer
institution, whose main functions are to:
– ensure the stable operation of the electrical grid,
first and foremost performing timely repairs and
renovation;
– ensure the reliable technological management of
the UNEG;
– ensure that emergency repairs are performed
when required.
> The technical and engineering services have improved:
the UNEG operating and technological management model
has been reviewed and an integrated protective relay and
emergency control system unit has been implemented;
> Maintenance and repair functions have been reassigned
to the Company’s branches (MES, PMES);
> Preparation is underway to co-ordinate the smooth
transition of the autumn-to-winter seasons with the regions,
large consumers and other energy companies. Specifically,
cooperation agreements have been signed with System
Operator, Russian Railways, Rosatom State Corporation,
Russian Technologies State Corporation, MRSK Holding,
Transneft, and other parties;
> Special attention is being paid to ensuring reliability in the
Siberia Region.
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Environmental Risks
Environmental risks are primarily associated with completing
the investment programme that has been approved by the
Company’s Board of Directors, and they concern adhering
to standards and norms when constructing new substations
as well as when reconstructing operating power lines and
constructing new ones. When a violation of the environmental
protection legislation occurs, the Company could possibly
face heavy fines in line with Federal laws. The possibility
of these risks arising is considered minimal with negligible
repercussions for the Company’s operations. The Company’s
environmental policy, as approved by the Board of Directors,
serves to diminish environmental risks.
Environmental safety and
the efficient use of natural
resources are important factors in the Company’s operations.
When new facilities are in the planning stage, the section on
the environment is drawn up separately, and it takes into
account all the requirements of the environmental protection
legislation of Russia. Additionally, all construction projects
and reconstruction of the power grid facilities go through a
state environmental evaluation. The Board of Directors has
approved the Programme for Implementing Environmental
Policy for 2008–2010, which stipulates organisational and
technical measures to decrease the negative impact on the
environment by the enterprises within the grid network.
Possible Changes in Prices for
Raw Materials and Services Used by the Company
The Company’s operations are not substantially affected by
these risks, as the Company is an infrastructure enterprise of
wholesale electric energy market and is not involved in the
generation and consumption of electricity, except for its own
requirements. Maintenance of the UNEG to assure the reliable
transmission of electricity is not substantially dependent on
the regular use of raw materials typically used by enterprises
that generate electric energy.
requirements and major construction and eliminating cross
purchases.
Country-specific Risks
Federal Grid Company is registered as a major taxpayer and
operates throughout the entire territory of the Russian Federation.
Given that electric energy is an infrastructure industry within the
economy, there are country risks associated with the overall
economic and political situation in the Russian Federation.
Russia’s economy is not immune to market downturns and
slowdowns in economic growth in other countries, as well as
to large-scale economic crises similar to the current worldwide
financial crisis. Financial issues or risk aversion to investing in
countries with developing economies could cause a decrease in
the amount of foreign investment in Russia and have a negative
effect on the Russian economy. Furthermore, given that Russia
produces and exports large volumes of oil and natural gas, the
Russian economy is particularly exposed to fluctuations in the
world prices for these commodities. Consequently, a drop in
the price for oil and natural gas could lead to a slowdown in
the development of the Russian economy. There also currently
remains the issue of price fluctuations for consumer goods in
the country.
According to the leading ratings agencies Standard & Poor’s
(S&P), Moody’s and Fitch, the Russian Federation’s current
sovereign rating (the key measure of country risk) remains at
investment grade, with the afore-stated agencies noting that
there was improvement in the country’s risk performance in the
fourth quarter of 2009:
> S&P upgraded Russia to stable outlook from negative
outlook.
> Moody's reported that it does not see any factors that could
cause a downgrade in Russia’s rating in the short term.
> Fitch reported a reduction in Russian banks’ short-term
solvency risk in the last months of the year on the back
of some signs of stabilisation in the Russian economy.
The price forecast for services offered by outside organisations
as well as for supplies and materials used by the Company
does not pose a significant risk of increasing in the short
term. The Company seeks to diminish these risks in order
to create a competitive environment for the purchasing of
work and services, cost optimising for repair and operating
Another indicator of the improvement in country risk and the
upgrade in investment attractiveness of the Russian Federation
is the decrease in credit default swap (CDS), which assesses
country default risk. Currently, CDS contracts for Russian
Eurobonds are traded over-the-counter (OTC) with maturity
dates of five years. To illustrate: when the domestic stock
market hit rock-bottom in mid-January 2009, the five-year CDS
spread exceeded 700 basis points (bps). As on 30.09.2009,
this indicator had reached 209 bps, and it eventually reached
185 bps on 31.12.2009.
> stiffening of payment terms for consumers;
> negotiations with consumers on the timely payment of
debts;
Meanwhile, if instability persists in the world economic recovery,
the Company may face difficulties in gaining access to capital
markets, and this situation could also have an unfavourable
influence on the buying power of those consumers who
purchase the Company’s services.
> reduction of advance payments as per agreements;
> ongoing work of the Accounts Receivable and Payable
Management Committee;
> confirmed policy to manage accounts payable and
receivable.
Liquidity
In order to minimise the aforementioned risks, the Company
is working on reducing internal costs and optimising the
investment programme, as well as suspending the raising of
loans.
As illustrated by the Company’s current stable liquidity
situation, the risk of the Company not fulfilling its loan
and debt obligations in the set timeframes and in full is
negligibly low.
Political Risks
In line with goals of modernising Russia’s banking, judiciary,
tax, administrative, and legislative systems, the Russian
government continues with numerous reforms to strengthen
the country’s economy and better integrate it into the world
economic system. Some risks remain in this process, such
as national currency liquidity risk, risks related to access to
long-term financing, and the risk of inflation above the level of
developed countries.
Financial Risks
Currency
The Company’s revenue from services rendered for the
transmission of electric energy are calculated in the currency
of the Russian Federation, the Russian rouble (RUB). The
Company’s current loan and debt obligations are also
calculated in the RUB. In terms of exchange fluctuations
for foreign currencies, they affect the Russian economy as
a whole and indirectly influence the business activity of the
issuer itself.
Possible Increase in Accounts Receivable
There is a financial risk associated with a possible increase in
accounts receivable because of the financial incompetence
on the part of counterparties to remit payment for the
Company’s services. The following measures are applied to
minimise this risk:
> expense optimising;
> monitoring of the current market situation;
The global liquidity crisis that began in mid-2007 is coming
to an end. Consequently, there is a noticeable decrease in
liquidity risks that could limit the attraction of financing on
money markets at rates acceptable to the Company. This
is a result of the overall increase in liquidity in the Russian
banking sector and a significant decrease in rates for
interbank loans.
Inflation
The current rate of inflation does not significantly affect
the Company’s financial standing. In line with the inflation
forecast, the rate of inflation should not significantly affect
the Company’s ability to remit payment on its obligations. A
rate of inflation in excess of 30% is the level critical to the
Company.
Changes in Tax Legislation
An analysis of the latest trends in the development of the tax
legislation of the Russian Federation does not give a clear
picture of the overall direction of tax reforms. Thus far, it is
possible only to note that overall the latest legislative initiatives
on the part of the state governing bodies have been directed
at lowering the tax burden and creating a more flexible system
of tax laws.
At the same time, the rate of earnings and returns in individual
Russian industries has reduced somewhat as the result of a
number of amendments to the tax laws. Russian legislation
in the area of tax liabilities in individual circumstances
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Federal Grid Company Annual Report 2009
Business Overview
risks. Based on the results of the assessment, the Company
decides which measures to take to react to the risks.
Specifically, Federal Grid Company applies the following
strategies to respond to risks:
> Risk acceptance – if the risk level, prior to taking additional
measures to manage it, is within a level satisfactory to
the Company or if the cost of measures to minimise the
consequences of the risk exceeds the amount of the
financial impact of the risk;
> Minimisation of consequences – if it is possible to take
measures to decrease the severity of the financial fallout or
the possibility of risk realisation;
> Risk assignment to a third party (for example, to an
insurer) – if the remaining risk (following the assignment) is
considered acceptable;
> Combined measures – any combination of the above-
outlined measures.
In terms of risks associated with transgressions in the area of
electric energy transmission, labour safety, industrial safety,
environmental protection and other similar risks, Federal Grid
Company takes measures to minimise the consequences
irrespective of the possibility and amount of the financial
impact of the risk.
Furthermore, the Company employs an efficient monitoring
system to carry out decisions relating to measures taken
to implement the strategy selected to react to risks. The
responsible business units of Federal Grid Company conduct
regular audits, which include the monitoring of the actual
fulfillment of the approved measures for reducing risks.
allows for fairly liberal interpretation. In recent years, the tax
authorities have clearly demonstrated that they do not often
side with the taxpayer in circumstances of permissible dual
interpretation of the tax law. This could mean additional risks
for practically any commercial entity in the Russian Federation.
Sanctions taken against companies or individuals working
in management positions could negatively reflect upon the
Company’s operations. The Company believes that its overall
understanding of the tax legislation is in line with the position
of the tax authorities, where the Company is registered as a
taxpayer; however, a possible divergence in these matters
could not be entirely excluded. As of 2009, the profit tax rate
has decreased from 24% to 20%, thereby reflecting positively
on the financial results and financial position of the Company.
There are not any other substantial changes for the Company
that could affect the activity of an issuer.
Operational Risks
As a result of the number of projects being completed
as part of the Company’s investment programme, risks
involved in dealing with counterparties constitute the bulk of
operational risks. Consequently, the Directorate for Managing
Counterparty Risks has been formed to handle this risk
category, whose responsibilities include the following:
> analyse the reliability and solvency of the counterparties,
limits have been approved for working with banks and
insurance companies. The Company continuously monitors
its counterparties to identify and efficiently respond at the
very beginning to negative changes in the financial stability
and solvency of the contracting organisations.
Risk Management System
The Federal Grid Company’s risk management policy sets
uniform rules for risk management, including approaches to
identifying risks, exchanging information necessary to assess
and manage risks, as well as developing steps to react to
risks. The main aim of the risk management system is to allow
the Company:
> to decrease the possibility of and minimise the
consequences of events that negatively affect the
achievement of goals;
> to make decisions and set priorities in its business activity in
accordance with the available alternatives and the threats
and variants associated with them, as well as to take into
consideration the financial implications;
> to use available resources efficiently;
> to fulfill planned performance indicators;
> constantly improve operating efficiency in all areas as
a result of more in-depth analysis and understanding of
existing threats;
particularly banks and insurance companies;
> to deliver reliable technological operation of the grids.
> prevent or diminish possible losses or damages by hedging
risks associated with the business of the counterparties.
In order to meet the first goal, the Company has developed
and implemented a method for assessing the financial stability
and solvency of its counterparties. This method is based
on the best practices in integrated risk management. The
Company has also defined the main criteria and procedures
for selecting prospective contractors to perform work.
Additionally, the Company minimises risks by collaborating
closely with credit and insurance organisations to ensure that
counterparties fulfill their respective contractual obligations.
In order to efficiently manage risks, modern risk management
mechanisms are integrated in all key business processes.
The Company’s risk management system is based on best
practices in this area. Key principles of risk management are
identified and responsibility for managing risks is attributed to
business units and staff members. In some of the Company’s
branches, a risk management system is implemented that
encompasses all business processes and operations, and
allows for efficient mitigation of risk impact on the Company’s
business.
At the same time, the Company has formed and implemented
clear and concise requirements for financial and credit
organisations in order to ensure that they fulfill their contracts.
In order to optimise the balance of risk and collateral quality,
As part of the current risk management system, the business
units of Federal Grid Company are responsible for regularly
analysing possible negative events. When an analysis is
complete, an assessment is conducted on the possible
financial impact, possibility and manageability of the identified
78
Federal Grid Company Annual Report 2009
Business Overview
FINANCIAL
PERFORMANCE
OVERVIEW
_ Financial Highlights
_ Net Profit Distribution
_ Loan Portfolio and Liquidity
_ Credit Ratings
5
FINANCIAL
PERFORMANCE
OVERVIEW
5–1. FINANCIAL HIGHLIGHTS
Financial Management Framework
Federal Grid Company has adopted a multi-tiered budgeting
structure as its key financial management tool, with financial
and economic planning spanning three hierarchical levels:
> Long-term planning involves a five-year financial plan
broken down into one-year steps. This involves establishing
guidelines for implementing a government-mandated policy
concerning the management of the UNEG, as well as the
Company’s own strategic plans, subject to acceptable risk
levels and with an eye on financial sustainability.
> Mid-term planning is built around a three-year business
plan, also divided into one-year steps. The goal is to set
mid-term financial and operating targets, to develop a
production programme, and to identify the necessary
resources while balancing the economic interests of the
Company and its investors, customers, shareholders, and
creditors.
> Short-term, or current, planning translates into an annual
budget with quarterly interim steps. Budgeting helps
management align their day-to-day activity with mid-term
targets described above.
In order to devise a financial management system meeting
advanced corporate governance standards, Federal Grid
Company has taken the following steps:
> As part of implementing a process-based management
model, business processes were described and regulated,
the Business Planning and Budgeting processes were
singled out, and implementation of the model got underway;
> Financial responsibility centres were identified to form a
core financial structure;
> A cash flow control system was set up;
> A management accounting system was developed and
implemented;
> A budgeting system was implemented, involving the efforts
of the Company’s and its branches’ management bodies to
draft and review budgets, approve and execute budgets,
control budget execution, maintain budgeting records,
and to compile, get audited, review, and approve budget
reports.
The financial analysis system operates by way of comparing
actual performance to set targets.
Cash flow management involves a mechanism whereby
cash is accumulated centrally as proceeds from operations,
financing, and investment, to be subsequently used to finance
operations and capital expenditures. Operations are financed
by distributing funds to the Company branches.
the Company’s
During 2009,
financial management
personnel were busy maintaining an optimal level of financial
limits.
sustainability while keeping within
Streamlining of expenses was a top financial priority, the goal
being to cut operating costs per unit of equipment without
sacrificing efficiency or the reliability of grid servicing.
leverage
the
Financial Performance
The Federal Grid Company reported the following financial performance for
FY 2009 (RUB mln):
Indicator
Revenue
COGS
Profit (loss) on sales
Other income
Other expenses
Profit (loss) before tax
Deferred tax assets
Deferred tax liabilities
Current tax on profit
Other similar compulsory payments
Net profit (loss) for the reporting period
2009
85,078
64,080
15,870
113,770
183,688
-54,049
-180
-722
-4,876
-39
-59,866
2008
68,485
58,977
5,156
38,377
37,356
6,177
7
-217
-3,225
1724
4,465
2007
61,385
52,030
6,280
2,681
5,062
3,900
3
-403
-1,208
4
2,296
Revenue increased in each of the years from 2007 through
2009. In 2009, revenue rose by RUB 16,593 mln, or by 24.2%
compared to 2008. The increase was mainly driven by growth
in electric energy transmission revenue by RUB 14,044.5 mln
(+21.2% YoY) thanks to expanded production capacity and
a hike in the UNEG transmission rates. Transmission revenue
accounted for 94.2% of total revenue in 2009.
COGS rose by RUB 5,103 mln (8.7% YoY) in 2009 to
reach RUB 64,080 mln. At 8.7%, the COGS growth pace is
considerably lower than the revenue growth pace (24%), and
well under the average inflation rate.
The Company posted a RUB 59,866 mln loss in 2009, which
was attributed to the following:
> A charge taken to write off a negative difference from
marking to market of investments in securities. As on
31.12.2009, the Company carried financial investments
in equities that traded at stock exchanges during 2009.
Book values reflect end-of-year market quotes of those
investments. The loss from changes in current market value
of the securities in 2009 amounted to RUB 79,905.9 mln;
> A RUB 7,017 mln loss on sale of financial investments, i.e.,
the divestment of TGC-12 stock;
> Establishment of a financial investment impairment provision
of RUB 3,502.6 mln.
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Financial Performance Overview
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Federal Grid Company Annual Report 2009
Financial Performance Overview
The table below shows the key asset, equity, and liability
numbers in 2009 (RUB mln):
Indicator
Total assets
Fixed assets
Current assets
Total liabilities
Equity
Long-term liabilities
Short-term liabilities
The numbers for 2008 and 2007 have been gleaned from
end-of-year financial statements approved by Annual General
Shareholders Meetings.
The data demonstrate an increase in assets in 2007 and 2008,
followed by an insignificant decrease that occurred in 2009.
Equity grew at a higher pace in 2008 for the following reasons:
> The charter capital was increased after the Federal Grid
Company conducted an equity placement and RAO UES of
Russia was restructured;
> The surplus capital was increased in 2008 by the amount of
a share premium as well as of surplus capitals of merged
subsidiaries as a result of RAO UES of Russia restructuring
as well as PP&E revaluations.
2009 saw a reduction in equity because of a RUB 59,866
mln loss reported for that year. The procedure for creating a
bad-debt provision for advances and other indebtedness was
amended in 2009. The Company is now required to establish a
special provision to cover receivables that are not regular trade
receivables. This change in accounting policy led to a reduction
in net assets.
2009
660,517
437,915
222,602
660,517
579,467
7,440
73,609
2008
723,940
511,588
212,353
723,940
666,177
18,622
39,141
2007
296,632
235,867
60,765
296,632
204,785
23,002
68,845
Fixed assets also suffered a downturn in value in 2009 mainly
as a result of a revaluation of long-term financial investments
as market values of trading securities held by the Company
plummeted and some of its long-term investments were
reclassified as short-term ones. This reduction was in part
offset by the Company’s capital expenditure programme, such
as a RUB 66,155.6 mln, or 44%, increase in construction-in-
progress.
Federal Grid Company’s current assets expanded considerably
in 2009. This is attributed to reclassification of financial
investments (promissory notes) from long-term to short-term,
as well as to an increase in accounts receivable and cash in
bank. Current assets were composed in 2009 of short-term
receivables (52.6%), short-term financial investments (31.1%),
and long-term receivables (9.2%).
Financial Ratio Calculation
Federal Grid Company’s charter capital grew in 2009. This
has resulted in payables to founders for RUB 40,177.9 mln in
contributions to charter capital being reported as short-term
liabilities in the accounts. This amount was subtracted from
short-term liabilities and then added to charter capital in order
to present a fair picture of the Company’s financial position,
given that those payables will effectively become part of the
charter capital upon registration of the report on the results of
an additional equity placement by FFMS.
The analysis below is based on the accounting records
adjusted for the above assumption.
Financial Ratios, 2007–2009
Indicator
Cash ratio*
Quick ratio*
Current ratio*
Equity to total assets**
Profit margin***, %
Return on equity (ROE)****, %
Accounts receivable dynamic*****, %
Accounts payable dynamic*, %
Ratio of accounts receivable to accounts payable*
2009
2.41*
5.91*
6.66*
0.94**
18.65***
1.33****
16.45*****
13.37*
5.37*
2008
1.41
5.01
5.43
0.92
7.53***
1.33****
254.67
59.44
6.73
2007
0.65*
2.62*
2.83*
0.85**
10.23***
1.59
94.76
155.80*
3.02*
* For 2007 and 2009, payables were reduced by any amounts owed to shareholders for equity contributions.
** For 2007 and 2009, charter capital was increased by any amounts owed to shareholders for equity contributions.
*** The calculation for 2007–2009 involved dividing operating profit by sales revenue from goods, work, and services.
**** The calculation methodology was approved by the Company’s Management Board. The impact of any factors extraneous to the Company
management’s competencies is not taken into account when calculating net profit or equity.
***** The calculation takes into account a change in the opening balance as on 01.01.2009, owing to an amendment of the bad-debt provision
accounting policy.
With equity contributions taken into account, liquidity ratios
in 2009 indicate that the Company is capable of meeting its
short-term obligations. Overall, the Company has maintained
a high level of liquidity and a low level of financial dependency,
with 94% of total assets financed from equity.
The cash, current, and quick ratios were all high during the
reporting period, which is considered a positive given that the
current ratio has a normal range of between 1 and 2, while,
for the quick ratio, the range is 0.7 to 0.8. The reported values
point to a reasonably high level of both liquidity and solvency.
The growth in the current, quick, and cash ratios in 2009 came
as a result of an increase in the percentage of short-term
financial investments, such as short-term promissory notes, as
well as a reduction in the share of short-term liabilities coupled
with a slight increase in receivables.
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Financial Performance Overview
The equity to total assets ratio demonstrates the extent of
financial independence from creditors. This ratio has not
shown a clear-cut trend. Over the period under review, the ratio
speaks to the financial stability of the Federal Grid Company.
The profit margin rose by a factor of more than 2.4 in 2009
versus the previous year as revenue outperformed COGS.
Return on equity, adjusted for elimination of extraneous factors’
impact, grew year on year, driven by an increase in contingent
net profit (without accounting for the creation of provisions or
a negative difference resulting from revaluation of financial
investments caused by the financial crisis).
The ratio of accounts receivable to accounts payable
demonstrates a satisfactory balance between the two.
5–2. NET PROFIT DISTRIBUTION
Federal Grid Company’s after-tax earnings (net profit) as
per accounting statements are the source for accumulating
a reserve fund and for paying dividends. The Company
reported a RUB 59,866 mln loss in 2009.
The table below shows net profit performance and distribution
for 2007–2009.
Net profit allocation
(RUB mln):
Retained earnings (loss)
2009
2008
2007
for reporting period:
-59,866
4,465
2,296
Distributions:
Reserve fund*
Development**
Dividends
-
-
-
223
4,242
-
1,916
-
380
*Existing legislation mandates that the Company create a reserve fund
equivalent to 5% of its charter capital. At least 5% of net profit has to be
contributed to the reserve fund annually until it reaches the required amount.
**Company development as part of Federal Grid Company’s capital
expenditure programme.
The chart below shows the loan portfolio
dynamic between 2007 and 2009:
5000
10,000
5000
17,980
25,000
13,000
31.12.2007
31.12.2008
31.12.2009
Alfa-Bank credit line loans, RUB mln
EBRD loan, RUB mln
Bond issues, RUB mln
5–3. LOAN PORTFOLIO AND LIQUIDITY
Cash Management
Cash position management aims to achieve maximum return
on investment while maintaining a reasonable risk/return
ratio. The Company earned returns on financial investments
by depositing temporarily available cash with Russia’s
largest and most reliable financial and credit institutions
with impeccable market credentials. Banks were selected
on the basis of a valuation of their financial and operating
performance, with risk limits established for each. Depending
on maturities, cash was placed in deposits, maintained on
current accounts, or kept in bank promissory notes.
A balanced approach to liquidity management, optimization
of placement structure in terms of returns, and minimization of
accompanying risks ensured strong results. Despite a broad-
based trend towards a reduction in market interest rates paid
on bank deposits and promissory notes, cash management
ensured returns in excess of RUB 3 bln, on par with 2008.
The safeguarding of the Company’s and its shareholders’
interests as well as the setting of limits on counterparty banks
are effected in accordance with Federal Grid Company
Regulations on the Procedure for Placement of Temporarily
Available Cash, as approved by the Company’s Management
Board on 28.04.2008, Minutes of the Meeting No. 528.
Loans and Credits
Federal Grid Company’s loan portfolio had decreased by
61% YoY towards 2009 year-end. During 2009, the Company
obtained RUB 4 bln in short-term loans as part of a credit
line opened by Alfa-Bank. The reduction in loan portfolio
by the end of 2009 was owing to an early repayment of an
EBRD loan on 14.04.2009, repayments of short-term Alfa-
Bank loans over the course of 2009, and a repayment of the
Federal Grid Company’s Series 05 bond on 01.12.2009. As
on 31.12.2009, the Company’s RUB 13 bln loan portfolio was
entirely composed of bonds, including RUB 7 bln worth of
Series 02 bonds with maturity on 22.06.2010, and RUB 6 bln
worth of Series 04 bonds with maturity on 06.10.2011.
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Bonds
Bond Issues
Series
Securities description
Registration No.
Issue amount, RUB mln
Size, mln units
Par value, currency
Maturity period, years
Coupon rate
01
02
03
04
05
Non-convertible interest-bearing bearer’s documentary bonds with mandatory
safekeeping at a centralised depository
4-01-65018-D
4-02-65018-D
4-03-65018-D
4-04-65018-D
4-05-65018-D
5,000
5
7,000
7
7,000
7
6,000
6
5,000
5
1000, RUB
1000, RUB
1000, RUB
1000, RUB
1000, RUB
3
8.80%
5
8.25%
3
7.10%
5
7.30%
3
7.20%
Issue state registration date
02.12.2004
11.05.2005
24.11.2005
07.09.2006
07.09.2006
Issue report state registration date
18.01.2005
23.08.2005
24.01.2006
08.11.2006
26.12.2006
Placement date
Maturity date
Coupon income per bond
Exchange
Quotation lists
Amount outstanding as on 01.01.09, RUB mln
Amount outstanding as on 31.12.09, RUB mln
21.12.2004
28.06.2005
16.12.2005
12.10.2006
05.12.2006
18.12.2007
22.06.2010
12.12.2008
06.10.2011
01.12.2009
43.88
MICEX
B
0
0
41.14
MICEX
unlisted
7,000
7,000
35.4
MICEX
B
0
0
36.4
MICEX
unlisted
6,000
6,000
35.9
MICEX
unlisted
4,980
0
20,000 (twenty thousand) Series 05 bonds with an aggregate par value of RUB 20,000,000 (twenty million) were redeemed ahead of schedule
on 03.06.2008, after they were presented for redemption in accordance with paragraph 6, Article 15 of Federal Law No. 208-FL, titled On Joint-
Stock Companies, dated 26.12.1995.
Bond Issues in 2009
The Federal Financial Market Service (FFMS) registered
Federal Grid Company bond issues with a combined
volume of RUB 50 bln on 05.11.2009. The Company had
decided to place the bonds on 21.09.2009 (Minutes of
the Meeting No. 89 of 24.09.2009).
The programme comprises six bond issues:
Securities description
Non-convertible interest-bearing bearer’s documentary bonds with mandatory safekeeping
Series
State registration No.
Issue amount, RUB mln
Maturity period, years
Number of bonds
Number of coupons
Coupon period
Placement price
Placement method
at a centralised depository, redeemable ahead of maturity date at the request
of holders or at the issuer’s discretion
06
07
08
09
10
11
4-06-65045-D
4-07-65045-D
4-08-65045-D
4-09-65045-D
4-10-65045-D
4-11-65045-D
5,000
10
5 mln
20
10,000
10
10 mln
20
5,000
10
5 mln
20
10,000
10,000
10
10
10 mln
10 mln
20
20
10,000
10
10 mln
20
182 days
RUB 1,000
Open subscription
The bonds will be placed on the MICEX on open subscription. The placement is scheduled to take place in 2010 depending on the market
situation.
5–4. CREDIT RATINGS
Federal Grid Company’s solid creditworthiness and financial
stability have been confirmed by credit ratings conferred by
the leading international ratings agencies.
The Company’s current credit ratings are all investment-
grade, and indicate that its key performance indicators are
at a level required to meet financial obligations in full as they
fall due.
Credit ratings as on 31.12.2009:
Ratings Agency
Ratings
International
National
scale
Standard & Poor’s (S&P)
BBB/outlook stable
Moody's
Baa2/outlook stable
scale
ruAAA
AAA.ru
The Federal Grid Company’s credit rating history over
the past three years:
22.12.2009
S&P upgraded the outlook for Federal Grid Company from
negative to stable. The long-term credit rating is confirmed at
BBB, and the national scale rating at ruAAA.
14.04.2009
S&P confirmed its long-term credit rating at BBB, and the
national scale rating at ruAAA, outlook negative.
08.12.2008
S&P downgraded the outlook for Federal Grid Company from
stable to negative, to reflect the sovereign rating outlook.
Long-term credit rating was confirmed at BBB.
28.10.2008
S&P removed Federal Grid Company’s long-term ratings,
on both foreign and national currency obligations, from the
CreditWatch list, with a positive outlook. At the same time,
S&P confirmed Federal Grid Company’s long-term ratings
on foreign and national currency obligations at ВВВ, and at
ruAAА on the national scale, outlook stable.
31.10.2007
S&P placed the long-term ВВ+ rating and the ruAA+ national-
scale rating on the CreditWatch list, outlook stable.
20.04.2007
Moody’s confirmed its credit rating at Baa2 (outlook stable),
as well as the Aaa.ru on the national scale.
02.02.2007
S&P upgraded its long-term rating to ВВ+, and the national-
scale rating to ruAA+, outlook positive on all ratings.
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Financial Performance Overview
CORPORATE
GOVERNANCE AND
MANAGEMENT
_ Corporate Governance Principles
_ Board of Directors
_ Management Board
_ Compensation of Members
of the Board of Directors
and the Management Board
_ Internal Control
_ HR Policy
6
CORPORATE
GOVERNANCE
AND MANAGEMENT
6–1. CORPORATE GOVERNANCE PRINCIPLES
The supreme governing body of Federal Grid Company is
the General Shareholders Meeting. The Board of Directors
sets the overall objectives for the Company and oversees
the performance of the Management Board, which runs the
Company on a day-to-day basis. The Management Board is
appointed by the Board of Directors. The sole executive body of
the Company is the Chairman of the Management Board, who
is elected by the General Shareholders Meeting. The General
Shareholders Meeting annually elects the Audit Commission,
which oversees the Company's operations and finances.
Federal Grid Company abides by the following key
principles of corporate conduct:
01. The Company works in pursuit of profit and aims to
increase the return on its equity;
02. The Company abides by the law of Russia and follows,
inasmuch as this law allows, international best practices
in corporate governance;
03. The Company clearly defines and communicates to the
public its strategy and objectives;
04. Information about the Company’s outlook, objectives
and ways of their achievement, as well as possible
risks and external factors, is made available to the
shareholders and other interested parties;
09. The Company provides its shareholders with all the
information required to exercise their vote at the
Shareholders Meeting;
10. Shares of the same type confer equal rights;
11. The Company guarantees the right of its shareholders to
vote according to the principle of ‘one share, one vote’;
12. The Company abides by the principle of transparency:
the role and the functions of each management
body are clearly defined in writing, and the Company
discloses all significant information about its operations;
13. The Company provides accurate, impartial, timely and
freely available information required to make informed
decisions;
14. The Company always remains in close contact with its
shareholders, providing them with all the necessary
information and documents;
15. The Company’s operations and finances are regularly
submitted to audit and inspections by the Audit
Commission;
16. The Company’s Board of Directors acts in the interests
of and is accountable to all its shareholders. Members
of the Board of Directors act in the Company’s interests.
Members of the Board are expected to meet stringent
standards of fairness, reasonable judgment, honesty
and loyalty;
05. The Company's business model pursues a long-term
17. The Company recognises its responsibility for the
strategy;
06. The Company guarantees equal treatment of all its
shareholders;
07. All the key corporate decisions are made with the
participation of the shareholders by means of voting at
the General Shareholders Meeting;
08. The shareholders have the option of casting their votes
at the General Shareholders Meeting, personally or via a
representative;
environment, work safety and the social welfare of its
staff.
Federal Grid Company has a special Provision
on the Governance of Subsidiaries and Branches, which:
The full text of these documents is available at:
http://www.fsk-ees.ru/investors_corporate_doc.html
Key Areas for Improvement
in Corporate Governance Standards
Federal Grid Company views improvement in corporate
governance as a way of rendering the Company more
attractive to investors. Good corporate governance reduces
the risk of crises and improves the possibility of an expedited
resolution when such crises arise.
As part of its commitment to protecting the interests of its
shareholders and investors, the Company abides by the
following key corporate governance principles:
01. The rights of shareholders and interested parties have to
be protected;
02. There has to be an effective supervisory body;
03. There has to be a clear division of powers and
responsibilities between the governing bodies, and an
effective system of accountability to the supervisory
body;
04. The Company policy has to be transparent and
formalised in official corporate documents, with an
open system of appointment, reappointment and
compensation of the directors and top managers;
05. All relevant information has to be disclosed to
shareholders and interested parties;
06. There has to be an effective system of internal control
and internal audit;
07. The Company has to strive continuously to improve
corporate standards;
08. The Company has to be in full and unconditional
compliance with the legislation, and deal in a fair and
reasonable manner with its shareholders;
09. Shareholders have to be given every opportunity to
exercise and defend their rights and interests;
10. The Company has to pursue high standards of business
ethics in its relations with other market players.
its efforts
to strengthen accountability
As part of
to
its shareholders, Federal Grid Company is building a
framework of corporate governance,
comprehensive
which includes a system of relations between the owners
and investors, and a system of internal control and risk
management, as well as internal audit.
> Regulates the procedures for exercising Federal Grid
Company’s shareholder rights in its subsidiaries and
branches, as documented by the shares it holds in these
subsidiaries and branches, with the purpose of ensuring
productive participation of Federal Grid Company
representatives in the general shareholder meetings,
boards of directors and audit commissions of these entities;
> Regulates corporate interaction between Federal Grid
Company and its subsidiaries and branches on issues
including corporate planning, organisation and supervision
in those areas where decisions by the subsidiaries and
branches require Federal Grid Company approval, in
accordance with the Federal Grid Company Charter.
Key Documents Regulating
Corporate Governance
01. Federal Grid Company Charter, approved by a
resolution of the General Shareholders Meeting on
30.06.2009;
02. Provision on the preparation and conduct of the General
Shareholders Meetings, approved by a resolution of
the Board of Directors of Federal Grid Company on
06.11.2002 (Minutes of the Meeting No. 131);
03. Provision on Federal Grid Company Management
Board, approved by a resolution of the Annual General
Shareholders Meeting (AGM) on 30.06.2009;
04. Provision on the Audit Commission of Federal Grid
Company approved by a resolution of the Board of
Directors on 06.11.2002 (Minutes of the Meeting No. 131);
05. Provision on the payment of compensation to members
of the Audit Commission approved by the AGM on
30.06.2008 (Minutes of the Meeting No. 6);
06. Board of Directors rules of procedure approved by a
resolution of the AGM on 30.06.2009 (Minutes of the
Meeting No. 162);
07. Provision on the payment of compensation to members
of the Board of Directors of Federal Grid Company,
approved by the Board of Directors of RAO UES of
Russia on 10.03.2004 (Minutes of the Meeting No. 162);
08. Code of corporate governance approved by a resolution
of the Federal Grid Company Board of Directors on
28.02.2008 (Minutes of the Meeting No. 55);
09. Provision on information policy approved by a resolution
of the Federal Grid Company Board of Directors on
28.02.2008 (Minutes of the Meeting No. 55);
10. Provision on the dividends policy approved by a
resolution of the Federal Grid Company Board of
Directors on 15.02.2008 (Minutes of the Meeting No. 54);
11. Provision on insider information approved by a resolution
of the Federal Grid Company Board of Directors on
28.02.2008 (Minutes of the Meeting No. 55).
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Corporate Governance and Management
9
10
11
Vladimir Tatsiy
Ernesto Ferlenghi
Rashid Sharipov
member
member
member
On 30.06.2009, the Annual General Shareholders Meeting
approved the new composition of the Board of Directors, as
follows:
No
Name
1
2
3
4
5
6
7
8
9
10
11
Sergey Shmatko
Andrey Malyshev
Boris Ayuev
Evgeniy Dod
Mikhail Kurbatov
Aleksey Makaro
Sergey Maslov
Dmitriy Ponomarev
Vladimir Tatsiy
Ernesto Ferlenghi
Rashid Sharipov
Position
Chairman
Deputy Chairman
member
member
member
member
member
member
member
member
member
Background information
of the members of the Board of Directors
(Positions correct as on the day of election to the Board)
Sergey Shmatko:
Minister of Energy of the Russian Federation
Born: 1966
Education: tertiary
Share of participation in the charter capital of the Company (%): 0
Share of ordinary Company shares held (%): 0
Andrey Malyshev:
Deputy CEO of the Russian State Nanotechnologies
Corporation (Rosnanotech)
Born: 1958
Education: tertiary
Share of participation in the charter capital of the Company (%): 0
Share of ordinary Company shares held (%): 0
Boris Ayuyev:
Chairman of the Management Board of System Operator
of Unified Energy System (SO UES)
Born: 1957
Education: tertiary
Share of participation in the charter capital of the Company (%): 0.007352
Share of ordinary company shares held (%): 0.007352
Yevgeniy Dod:
Chairman of the Management Board of Inter RAO UES
Born: 1973
Education: tertiary
Share of participation in the charter capital of the Company (%): 0
Share of ordinary Company shares held (%): 0
Mikhail Kurbatov:
Department Director of the Ministry of Economic Development
Born: 1981
Education: tertiary
Share of participation in the charter capital of the Company (%): 0
Share of ordinary Company shares held (%): 0
Share of participation in the charter capital of the Company (%): 0
Share of ordinary Company shares held (%): 0
Board of Directors Committees
There were four committees under
the Board of Directors in 2009:
1. HR and Compensation Committee;
2. Strategy Committee;
3. Audit Committee;
4. Investment Committee.
HR and Compensation Committee
(Positions held at the time of election)
Alexey Makarov:
Director of the Institute of Energy Studies of the Russian Academy of Sciences
Born: 1937
Education: tertiary
Share of participation in the charter capital of the Company (%): 0
Share of ordinary Company shares held (%): 0
Sergey Maslov:
President of the St Petersburg International Commodity Exchange
Born: 1960
Education: tertiary
Share of participation in the charter capital of the Company (%): 0
Share of ordinary Company shares held (%): 0
Dmitriy Ponomarev:
Chairman of the Management Board of Market Council
Born: 1967
Education: tertiary
Share of participation in the charter capital of the Company (%): 0
Share of ordinary Company shares held (%): 0
Vladimir Tatsiy:
First Vice-President of Gazprombank
Born: 1960
Education: tertiary
Share of participation in the charter capital of the Company (%): 0
Share of ordinary Company shares held (%): 0
Ernesto Ferlenghi:
Head of Eni Russia and CIS offices
Born: 1968
Education: tertiary
Share of participation in the charter capital of the Company (%): 0
Share of ordinary Company shares held (%): 0
Rashid Sharipov:
Deputy CEO of KFK-Konsalt
Born: 1968
Education: tertiary
Members:
1. Dmitriy Ponomarev
Chairman, member of the Federal Grid Company Board of
Directors, Chairman of the Board of Market Council;
2. Vladimir Tatsiy
member of the Federal Grid Company Board of Directors,
First Vice-President of Gazprombank;
3. Rashid Sharipov
member of the Federal Grid Company Board of Directors,
Deputy CEO of KFK-Konsalt.
Responsibilities:
> Developing the principles and criteria for compensation of:
– Members of the Board of Directors and Chairman
of the Board of Directors;
– Members of the Management Board and
Chairman of the Management Board;
– Members of the Audit Commission and its
Chairman.
> Developing proposals for the substantial terms of contracts
with members of the Board of Directors, members of the
collegial executive body and Chairman of the Management
Board;
> Developing criteria for selecting candidates for membership
of the Board of Directors and the collegial executive body,
as well as candidates for the position of the sole executive
body; preliminary assessment of those candidates;
> Regulatory assessment of the performance of the Chairman
of the Management Board, who also acts as the sole
executive body (chief executive), and of members of the
Management Board; preparation of recommendations
for the Board of Directors on the reappointment of the
Chairman and members of the Management Board.
6–2. BOARD OF DIRECTORS
The Board of Directors of Federal Grid Company is
responsible for the overall management of the Company,
with the exception of issues that fall under the remit of the
General Shareholders Meeting, as defined by the Federal
Law titled On Joint-Stock Companies and the Federal Grid
Company Charter.
The Board of Directors acts in compliance with the Federal
law titled On Joint-Stock Companies and other Russian laws
and regulations, as well as the corporate Charter and the
Rules of Procedure of the Board of Directors.
In 2009, the attendees of the Annual General Shareholders
Meeting (AGM) approved the new composition of the
Board of Directors. The previous Board, appointed during
the Extraordinary General Shareholders Meeting (EGM)
on 27.12.2008, remained in place until 30.06.2009. Its
composition was as follows:
No
Name
1
2
3
4
5
6
7
8
Sergey Shmatko
Dmitriy Ponomarev
Boris Ayuyev
Mikhail Kurbatov
Aleksey Makarov
Andrey Malyshev
Sergey Maslov
Mikhail Susov
Position
Chairman
Deputy Chairman
member
member
member
member
member
member
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Corporate Governance and Management
President of the St Petersburg International Commodity
Exchange;
11. Vladimir Sitnikov
CEO of Energosetproekt Institute;
12. Vladimir Tatsiy
member of the Federal Grid Company Board of Directors,
First Vice-President of Gazprombank;
13. Maria Tikhonova
Deputy Head of Economic Regulation and Ownership
Relations Department of the Energy Ministry.
Responsibilities:
> Evaluation and expert analysis of new investment projects
and programmes submitted for the Board of Directors’
approval;
> Providing the Board of Directors with timely information
about investment risks facing the Company as well as its
subsidiaries and branches;
> Performing other tasks at the Board of Directors' request.
A total of 19 meetings of the Board of Directors were held
in 2009; including three meetings in the presence of all
members of the Board. The Board approved decisions on a
total of 209 items on the agenda.
Strategy Committee
(Positions held at the time of election)
Members:
1. Aleksey Makarov
Chairman, member of the Federal Grid Company Board of
Directors, Director of the Institute of Energy Studies of the
Russian Academy of Sciences;
2. Yuriy Lipatov
Chairman of the Energy Committee in the Russian Duma;
3. Valentin Mezhevich
First Deputy Chairman of the Commission for Natural
Monopolies in the Federation Council of the Russian Federal
Assembly;
4. Nikolay Shvets
CEO of MRSK Holding;
5. Boris Ayuyev
member of the Federal Grid Company Board of Directors,
Chairman of the Management Board of System Operator of
Unified Energy System (SO UES);
6. Sergey Beloborodov
member of the Supervisory Council
of Market Council;
7. Sergey Ivanov
First Deputy Chairman of the Federal Grid Company
Management Board;
8. Roman Berdnikov
Head of the Department
of Customer Relations and Markets of Federal Grid
Company;
9. Vladimir Sitnikov
CEO of Energosetproekt Institute;
10. Viktor Kudryaviy
retired;
11. Anatoliy Dyakov
President of the United Electric Energy Complex of Russia
(a not-for-profit organisation);
12. Vladimir Dorofeev
retired;
13. Andrey Malyshev
member of the Federal Grid Company Board of Directors,
Deputy CEO of Rosnanotech;
14. Yevgeniy Dod
Chairman of the Management Board of RusHydro.
Responsibilities:
In a number of areas, decisions by the Board of Directors have
to be preceded by a discussion at the Strategy Committee,
which then submits its recommendations to the Board. These
areas include:
> Development of Unified Energy System of Russia, including
the UNEG and isolated energy grids;
> Technological connection to electricity grids;
> The workings of the wholesale electricity market and
technological management of electricity grids that are part
of Unified Energy System of Russia;
> Supervision of investment in the development of electricity
grids and the UES of Russia;
> Innovative technologies that formalise the decision-
making process in the Company’s relations with wholesale
operators;
> Disclosure of information under the national monopolies
provision;
> Any other issues that concern the development of the
UNEG.
Audit Committee
(Positions held at the time of election)
Members:
1. Rashid Sharipov
Chairman, member of the Federal Grid Company
Board of Directors, Deputy CEO of KFK-Konsalt;
2. Vladimir Tatsiy
member of the Federal Grid Company
Board of Directors, First Vice-President of Gazprombank;
3. Ernesto Ferlenghi
member of the Federal Grid Company
Board of Directors, Head of Eni Russia and the CIS.
Responsibilities:
> Evaluating candidates for the external auditor position
and developing recommendations for the Board of
Directors regarding the selection of candidates. Members
of the committee participate in the work of the Selection
Commission, which selects the audit company to carry out
the annual independent audit of Federal Grid Company
accounts, in compliance with Russian laws and taking into
account the candidates' qualification, the quality of their
work and their suitability with regard to requirements of
independence;
> Developing recommendations for the Board of Directors
regarding the annual independent audit of Federal Grid
Company accounts;
> Providing analysis of Federal Grid Company accounts and
of the findings of external audit to ensure compliance with
Russian laws, international financial reporting standards,
Russian accounting standards and other regulations. The
committee provides its own assessment of Federal Grid
Company accounts and of the findings of external audit,
and develops recommendations for the Board of Directors
on improving the Company's accounting procedures;
> Preliminary review, analysis and recommendations
(conclusions) on the following issues that fall under the remit
of the Board of Directors:
– approving the annual report;
– approving the annual financial accounts;
– selecting the auditor;
– determining the size of the auditor’s remuneration;
> Providing analysis of internal control procedures,
including control of the Company’s compliance with the
legislation and regulations; evaluating these procedures
and developing recommendations on their improvement
for the Board of Directors;
> Approving the schedule of external audit proposed by
the Financial Control and Internal Audit department;
> Reviewing quarterly reports by the Financial Control
and Internal Audit department in accordance with the
approved schedule of internal audit.
Investment Committee
(Positions held at the time of election)
Members:
1. Andrey Malyshev
Chairman, member of the Federal Grid Company Board of
Directors, Deputy CEO of Rosnanotech;
2. Boris Ayuyev
member of the Federal Grid Company Board of Directors,
Chairman of the Management Board of SO UES;
3. Anatoliy Dyakov
President of United Electric Energy Complex of Russia (a
not-for-profit organisation);
4. Sergey Ivanov
First Deputy Chairman of the Federal Grid Company
Management Board;
5. Igor Kozhukhovskiy
CEO of Energy Forecasting Agency (APBE);
6. Dmitriy Ponomarev
member of the Federal Grid Company Board of Directors,
Chairman of the Board of Market Council;
7. Vyacheslav Kravchenko
CEO of RN-Energo
8. Viktor Lebedev
Department Head of the Ministry
of Economic Development;
9. Aleksey Maslov
member of the Federal Grid Company Board of Directors;
10. Sergey Maslov
member of the Federal Grid Company Board of Directors;
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6–3. MANAGEMENT BOARD
Management of day-to-day operation of Federal Grid
Company is performed by the sole Executive – the Chairman
of the Management Board – and the collegial executive body,
the Management Board. The Board and its Chairman are
accountable to the General Shareholders Meeting and the
Board of Directors.
The Management Board and its Chairman act in accordance
with the Charter and the Provision on the Management
Board. The remit of the Management Board is defined in
the Federal Grid Company Charter, which is available at:
http://www.fsk-ees.ru/eng/investor_governance_doc.html
Oleg Budargin
Chairman of the Management Board
Dmitriy Troshenkov
First Deputy Chairman of the Management Board
Valeriy Chistyakov
First Deputy Chairman of the Management Board
Responsibilities:
Responsibilities:
Responsibilities:
The Chairman of the Management Board formulates the
Company’s strategy and development objectives on economic
and financial issues, accounting and reporting, operational
and commercial activities, personnel, R&D, investment and
corporate policy. He is also responsible for health and safety
policy, the legal framework of the Company’s business and
the day-to-day operation of the Company.
Background:
Born 16.11.1960, Mr Budargin graduated from Norilsk Industrial
Institute cum laude in 1982 with a degree in Industrial and
Civil Engineering. From 1984-1995 he worked at Norilskstroi
PSMO (Production Construction and Assembly Association),
in Promstroi Trust of Norilsk Mining and Metallurgical Works
(NGMK), in the Capital Construction Department of NGMK,
and served as Deputy CEO of NGMK. Mr Budargin was
mayor of Norilsk from 2000–2002, and Governor of Taymyr
(Dolgano-Nenetskiy) Autonomous District from 2003–2006.
In 2007, he was appointed assistant to the plenipotentiary
representative of the Russian President in the Siberian
Federal District. On 11.07.2009, the Federal Grid Company
Board of Directors appointed Mr Budargin Acting Chairman of
the Management Board, and on 27.10.2009, he was elected
Chairman of the Federal Grid Company Management Board
by the Extraordinary General Shareholders Meeting.
Share of participation in the charter capital of the Company (%): 0
Share of ordinary Company shares held (%): 0
Management of the Company’s economic and financial
operations, financial efficiency measures, implementation
of corporate policy and legal framework, human resources
management, organisational strategy and development of
the Company and its subsidiaries and branches, formulation
and implementation of investment policy.
Background:
Born 07.01.1966, Mr Troshenkov graduated from the Economics
Department of St Petersburg State University with a degree in
Financial Accounting and Auditing. He also holds a degree in
Banking Financial Accounting and Auditing from St Petersburg
Banking Institute. From 2000–2001, he served as Deputy
CEO of Economics and Finance at Petroelektrosbyt. From
2001–2005, he was Deputy CEO of Economics and Finance
at Lenenergo, and he was Deputy CEO of Economics and
Finance at OGK-1 from 2005–2006. From 2006–September
2009, he was Vice-President of Finance at TNK-BP, and in
September 2009, he was appointed First Deputy Chairman of
the Federal Grid Company Management Board. Mr Troshenkov
has been on the Federal Grid Company Management Board
since October 2009.
Management of R&D, customer
IT &
telecommunications, operation, repairs and maintenance of
the UNEG, grid monitoring and diagnostics, technological
supervision and audit.
relations,
Background:
Born 18.05.1955, Mr Chistyakov graduated from Vladimir
Polytechnic Institute in 1977 with a degree in Mechanical
Engineering, and the Financial Academy of the Russian
Government in 1996, with a degree in Economics. In 2003,
he took an MBA course in Business Management at the State
Management University, and he holds a PhD in Economics.
From 1999–2009, he held various positions in the electricity
sector, including Deputy CEO for Sales at Vladimirenergo,
CEO of Udmurtenergo, Director of the Upper Volga Branch
of MRSK Centre and North Caucasus, CEO of Lenenergo,
and First Deputy CEO of the UES Engineering Centre. In
September 2009, he was appointed Deputy Chairman of
the Management Board, and was elected as a member of
the Management Board in October 2009. Mr Chistyakov has
served as First Deputy Chairman of the Management Board
since November 2009.
Share of participation in the charter capital of the Company (%): 0
Share of participation in the charter capital of the Company (%): 0
Share of ordinary Company shares held (%): 0
Share of ordinary Company shares held (%): 0
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In 2002, Mr Vasilyev was appointed Deputy Chairman of the
Federal Grid Company Management Board. In January 2003, he
was elected as a member of the Management Board in charge
of the Company’s technology policy, making an important
contribution to the reform and development of Russia's electricity
transmission sector and the UNEG, which serves as the
backbone of UES of Russia.
For his service to the country and industry, Mr Vasilyev was
awarded the medal For the Development of Natural Resources
and the Oil and Gas Sector of West Siberia, and the state award
Honoured Energy Sector Worker of the Russian Federation, as
well as departmental titles of Honoured Staff Member of the Fuel
and Energy Ministry and Honoured Energy Sector Worker.
Viktor Vasilyev, Deputy Chairman of the Federal Grid Company
Management Board, passed away on 07.03.2010.
Share of participation in the charter capital of the Company (%): 0.00003%
Share of ordinary Company shares held (%): 0.00003%
Roman Berdnikov
Member of the Management Board, Director of
Development and Customer Relations
Dmitriy Gurevich
Member of the Management Board, Director of IT and
telecommunications
Responsibilities:
Responsibilities:
Formulation of customer relations and market development
policies, strategic development of the grid, technological
connection to the Company’s grids.
IT and Telecommunications, development and implementation
of the UEP TN of the Electricity Grid, coordination of fibre-
optic lines construction.
Background:
Background:
Born 14.08.1973, Mr Berdnikov graduated from Moscow
Energy Institute with a degree in Electrical Stations Technology.
From 1997-1998, he served as a senior electrician at
Mosenergo. From 1998-1999, he worked as a specialist in
the RAO UES Tariffs and Operational Indicators Department.
From 1999-2002, he worked for RAO UES of Russia, first as
a specialist in the SDC Department of the Federal National
Wholesale Electric Power Market (FOREM), and later as a
leading specialist in the Department of electric energy market
development. He attained the position of Leading Specialist
of the Federal Grid Company Strategic Planning Department
in October 2002. In 2003, he was promoted to Deputy Head
of the Strategic Planning Department, and in 2005 to Head of
the Services and Grid Reliability Development Department,
which was subsequently reorganised into the Customer and
Market Relations Department. In 2009, he was appointed
Director of Client Relations Development of Federal Grid
Company. He was elected as a member of the Management
Board in October 2009. Mr Berdnikov was appointed Deputy
Chairman of the Federal Grid Company Management Board
in February 2010.
Share of participation in the charter
capital of the Company (%): 0.0000002%
Share of ordinary Company shares held (%): 0.0000002%
Born 22.07.1971, Mr Gurevich graduated from Leningrad
Electric Technology Institute in 1993 with a degree in Radio
Technology. In 1997, he received an MBA from St Petersburg
International Management Institute and a Master Certificate
in Project Management from George Washington University,
and then joined AT&T (Lucent Technologies). In 1997, he was
appointed Projects Director at Lucent Technologies. In 2003,
he joined Rostelecom as head of the Project Management
Department and later as Deputy CEO and a member of
the Management Board. He was appointed Federal Grid
Company Director of Telecommunications
in February
2008 and Director of Telecommunications and Information
Technologies in October 2009. Mr Gurevich was elected as
a member of the Federal Grid Company Management Board
in October 2009.
Share of participation in the charter capital of the Company (%): 0
Share of ordinary Company shares held (%): 0
Sergey Ivanov
First Deputy Chairman of the Management Board
Responsibilities:
Formulation and implementation of Company investment
policy, liaison with CIUS EES.
Background:
Ivanov graduated
Born 06.07.1961, Mr
from Moscow
Institute of Engineering and Physics in 1984 with a degree in
Theoretical Nuclear Physics, and a professional qualification
as an engineer and physicist. He holds a Doctorate in
Economics. From 1994–2002, he worked for the Russian
Energy Company as First Deputy CEO, then as CEO. From
2002–2006, he held senior positions in Rosenergoatom.
From 2007–2008, he served as Deputy CEO for Strategy and
Investment at Inter RAO UES. Mr Ivanov has been a member
of the Federal Grid Company Management Board since July
2008.
Share of participation in the charter capital of the Company (%): 0
Share of ordinary Company shares held (%): 0
Viktor Vasilyev
Deputy Chairman of the Management Board
Responsibilities:
Formulation and implementation of R&D and technology
policy, diagnostics of the technical condition of electricity
grids.
Background:
Born 05.02.1944, Mr Vasilyev graduated from Tomsk Polytechnic
Institute in 1966 with a degree in Electrical Engineering, and a
PhD in Technical Sciences.
From 1988–2002, Mr Vasilyev served as the chief engineer of
the Tyumen Energy System, contributing substantially to the
Company’s development. He oversaw the launch of the 800-MW
Nizhnevartovskaya GRES, and of the 24-MW reserve thermal
power plant of the Urengoy GRES. Also during this time, the
Company continued the construction of 110/500-kV transmission
lines, which facilitated the development of remote oil and gas
fields and provided electricity to the towns and villages in the
harsh climate of the Yamal-Nenets Autonomous District, including
Yugra and Tyumen Region.
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Misrikhan Misrikhanov
Member of the Management Board,
Director of MES Centre
Mikhail Tuzov
Deputy Chairman of the Management Board,
member of the Management Board
Responsibilities:
Responsibilities:
Managing MES Centre, a branch of Federal Grid Company;
taking decisions on all operational matters at the branch.
Setting up corporate training centres, facilitating the development
of corporate strategy.
Background:
Background:
Born 02.03.1951, Mr Misrikhanov graduated from Moscow
Energy Institute in 1974 with a degree in Hydro-electric
Engineering, and from Moscow State University with a
degree in Engineering and Mathematics. He is a member
of the Russian Academy of Energy Sciences, and holds a
Doctorate in Technical Sciences. He began his career in
1974 as an engineer at the Kazakh Energy Research Institute
Glavniiproekt of the Soviet Energy Ministry. From 1979–1984,
he served as Head of the Central Controller Service at REU
Dagenergo of the Soviet Energy Ministry. From 1984–1987,
he managed the construction of the Irganaysk and Miatlinsk
hydro-electric power plants. From 1987–1997, he served as
Director of the Chirkeysk hydro-electric power plant. From
1997–2002, he held senior positions in the North Caucasus
ODU, in the Yuzhenergo branch of RAO UES of Russia,
and in an independent regional subsidiary of RAO UES of
Russia, Central InterSystem Electricity Grids. In 2002, he
was appointed CEO of MES Centre, a subsidiary of Federal
Grid Company. Mr Misrikhanov was elected as a member of
the Federal Grid Company Management Board in October
2009.
Share of participation in the charter
capital of the Company (%): 0.0162%
Share of ordinary Company shares held (%): 0.0162%
Born 18.09.1966, Mr Tuzov graduated from Moscow Energy
Institute in 1989 with a degree in Technology Design and
Engineering. From 2001–2002, he worked for RAO UES of Russia
as a director in charge of setting up Federal Grid Company.
In August 2002, he was elected as a member of the Federal
Grid Company Management Board. Mr Tuzov was appointed
Chief Counsel to the Chairman of the Federal Grid Company
Management Board in November 2009.
Share of participation in the charter capital of the Company (%): 0
Share of ordinary Company shares held (%): 0
Andrey Demin
Deputy Chairman of the Management Board, member of the
Management Board
Responsibilities:
In the first half of 2009, his responsibilities included the
organisation of financial and economic processes in the
Company and ensuring its financial efficiency.
Background:
Born 28.04.1974, Mr Demin graduated from Zaporizhye Institute
of Economics and Information Technologies with a degree in
Economics in 1999. In 2004, he joined RAO UES of Russia as a
lead expert of the Business Planning Department at Corporate
Centre. From 2005–2007, he served as Head of the Federal
Grid Company Department for Regional Grids and Head of the
Federal Grid Company Inter-regional Grids Control Centre. Mr
Demin was elected as a member of the Federal Grid Company
Management Board in April 2007.
Share of participation in the charter capital of the Company (%): 0
Share of ordinary Company shares held (%): 0
executive body of Federal Grid Company: Acting Chairman
of the Management Board. The decision was made in
accordance with Paragraph 4, Article 69 of the Federal Law
titled On Joint-Stock Companies, dated 26.12.1995 (No. 208).
The Board of Directors appointed Oleg Budargin to the newly
created position of Acting Chairman of the Management
Board.
Aleksandr Chistyakov, former Deputy Chairman of Federal
Grid Company Management Board, was relieved of his duties
by the decision of the Board of Directors on 06.08.2009
(Minutes of the Meeting No. 86).
On 21.10.2009, the Board of Directors elected the following
new members of the Management Board (Minutes of the
Meeting No. 89):
1. First Deputy Chairman: Dmitriy Troshenkov;
2. Deputy Fhairman: Valeriy Chistyakov;
3. Director of Development and Customer Relations: Roman
Berdnikov;
4. Director of Telecommunications and Information
Technology: Dmitriy Gurevich;
5. CEO of MES Centre, a Federal Grid Company branch:
Misrikhan Misrikhanov.
On 27.10.2009, an Extraordinary General Shareholders
Meeting elected Oleg Budargin Chairman of the Federal Grid
Company Management Board.
Aleksey Maslov
Member of the Management Board
Responsibilities:
In the first half of 2009, his responsibilities included investment
and construction (up until July 2009).
Background:
Born 13.05.1975, Mr Maslov graduated from Moscow
State Bauman University of Technology with a degree in
Engineering and Mechanics. From 1998–2000, he studied
at the Financial Academy of the Russian Government, and
he holds a PhD in Economics. Mr Maslov was elected as a
member of the Federal Grid Company Management Board in
October 2005.
Share of participation in the charter capital of the Company (%): 0
Share of ordinary Company shares held (%): 0
Changes in the composition
of the Management Board in 2009
The following is the list of members of the Federal Grid
Company Management Board who served until 26.06.2009:
1. Andrey Rappoport
2. Viktor Vasilyev
3. Andrey Demin
4. Sergey Ivanov
5. Aleksey Maslov
6. Mikhail Tuzov
7. Aleksandr Chistyakov
8. Viktor Pryadein
On 26.06.2009, the Board of Directors relieved Viktor Pryadein
of his duties as member of the Management Board and
Director of Development and Customer Relations (Minutes of
the Meeting No. 82).
Andrey Rappoport, former Chairman of the Federal Grid
Company Management Board, was relieved of his duties
owing to the expiration of his contract on 01.07.2009.
On 11.07.2009, the Board of Directors approved the decision
(Minutes of the Meeting No. 85) to set up a temporary sole
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6– 4. COMPENSATION OF MEMBERS OF THE BOARD OF
DIRECTORS AND THE MANAGEMENT BOARD
Compensation Paid to Members of the Board of
Directors
Compensation of members of the Board of Directors is
based on the Provision on Payment of Compensation and
Compensations to Members of Federal Grid Company Board
of Directors, which was approved by the Board of Directors
of RAO UES of Russia on 10.03.2004. Compensation level is
determined according to the following criteria.
The size of compensation paid to each member of the
Board of Directors for participation in a meeting of the Board
(regardless of the form of the meeting) amounts to three times
the size of the minimum monthly wage of a first-rank specialist,
as determined in the Industrial Rates Agreement currently in
force in the Russian electricity sector. The money is paid within
seven calendar days of the date of the meeting.
The total amount of compensation paid to each member of
the Board of Directors is calculated based on the number of
Board Meetings he or she has attended, and on the size of the
dividends paid on ordinary shares of the Company following
the announcement of annual financial results (or quarterly, six-
month or nine-month results). The decision about the size of
the dividends paid on ordinary shares is made by the General
Shareholders Meeting.
Since the Annual General Shareholders Meeting held on
30.06.2009 decided not to pay any dividends for 2008,
compensation paid to members of the Board of Directors in
2009 was calculated based solely on the number of Board
meetings they had attended.
Information about remuneration, benefits and compensation paid
to members of the Federal Grid Company Board of Directors:
Total compensation paid
to members of the Board of Directors in 2009
RUB 4,497,029
Including:
Bonuses
Commission
Benefits
0
0
0
Compensation Paid to Members
of the Management Board
Compensation paid to members of the Management Board in
2009 was based on the Provision on the Terms of Employment
Contracts and the Amount of Compensation and Remuneration
Paid to the Top Managers of Federal Grid Company, as
approved by the Federal Grid Company Board of Directors on
24.12.2007 (Minutes of the Meeting No. 52). The document
stipulates that the amount of compensation paid to the top
managers of the Company is based on key indicators of their
performance. The specific nature of these indicators and their
target values are determined by the Board of Directors.
In 2009, the following indicators were used to rate the
performance of top managers (Minutes of the Meeting No.
93 of the Board meeting of 30.11.2009).
Quarterly indicators:
> Relative share of restrictions and limitations on energy
transmission services, %;
> Work-safety record (there have to be no incidents with
fatalities and no incidents in which several people are
injured, at least one of them seriously);
> Ratio of capital investment utilisation, %.
Annual indicators:
> Return on equity (ROE), %;
> No accidents;
> Losses in the transmission lines operated by Federal Grid
Company, %;
6–5. INTERNAL CONTROL
The internal control system of Federal Grid Company includes
the Controls and Audit Department (Financial Controls
and Internal Audit Directorate) and the Internal Control
Directorate.
The Audit Commission, elected by the General Shareholders
Meeting of 30.06.2008. was dissolved on 30.06.2009. Below
is a list of the members:
Name
Main position held
1. Tatiana Zlydareva
Consultant at the Federal Agency
The remit of the Controls and Audit Department includes:
> Devising and implementing financial and operational
control procedures at the Company and its subsidiaries
with the aim of preventing, identifying, putting an end to and
eliminating the consequences of any irregularities in the
management of financial and material resources;
> Devising and implementing a system of selective
inspections of financial and economic operations at the
Company and its subsidiaries to establish the compliance
of these operations with legal requirements;
> Conducting investigations of any possible irregularities
(fraud);
> Facilitating cooperation with external inspections agencies;
> Supporting the corporate Audit Commission and ensuring
the implementation of its decisions and recommendations.
2. Victor Lebedev
for State Property Management
Head of the Energy Sector Restructuring
Department of the Ministry of Economic
Development
3. Lyudmila Matyunina
First Deputy Head of the Internal Audit
Department of MRSK Holding
4. Maria Tikhonova
Head of Division at the Economic
Regulation and Ownership Relations in
TEK Department of the Russian Energy
Ministry
5. Marina Lelekova
Head of the Federal Grid Company
Financial Controls and Internal Audit
Directorate
The remit of the Internal Control Directorate includes:
> Continuous monitoring and analysis of the accounting
process at the Company and its subsidiaries and branches;
> Devising and implementing the internal control system,
The Annual General Shareholders Meeting held on 30.06.2009
elected the new members of the Audit Commission, including
(Positions held at the time of the election):
1. Tatiana Zlydareva – Consultant at the Federal Agency
preventing any negative consequences of the Company’s
operations and identifying internal reserves for bolstering
financial stability;
for State Property Management
Born: 1983
Education: tertiary
> Devising and implementing continuous operational control
Share of participation in the charter capital of the Company (%): 0
> Efficiency in the implementation of the investment
of the Company’s accounting procedures;
Share of ordinary Company shares held (%): 0
programme, %.
All quarterly and annual indicators in 2009 were on target. The
reports for Q1, Q2 and Q3 have been approved by the Board
of Directors (Minutes of the Meeting No. 98 of 10.03.2010).
The report for the fourth quarter and the annual report in 2009
have been submitted for approval by the Board of Directors.
Information on remuneration, benefits and compensation paid to members
of the Federal Grid Company Management Board:
Total compensation paid
to Management Board members in 2009
RUB 98,301,058.56
Other personal compensation
(Voluntary personal liability insurance)
RUB 2,766,617
Compensation for participation in meetings
of the Federal Grid Company Board of Directors
RUB 1,730,412
Including:
Salary
Bonuses
Commission
Benefits
RUB 44,936,369.58
RUB 50,991,855.00
0
0
Other personal compensations
(Voluntary personal liability insurance)
RUB 2,372,833.98
> Developing proposals for improving the existing accounting
2. Viktor Lebedev – Head of the Directorate at the State
and financial management mechanisms;
> Devising and implementing procedures for continuous
internal verification of accounting and operational
information;
Tariff Regulation and Infrastructure Reform Department
of the Ministry of Economic Development
Born: 1980
Education: tertiary
> Devising and implementing continuous internal monitoring
Share of participation in the charter capital of the Company (%): 0
of compliance of corporate financial and economic
operations with the Russian legislation.
Share of ordinary Company shares held (%): 0
3. Maria Tikhonova – Department Head
The Internal Control Directorate is accountable to the Deputy
Chairman of the Board. It is not connected in any way to the
Board of Directors.
The Audit Commission is also responsible for monitoring
the Company’s financial and economic operations, and it is
elected every year by the General Shareholders Meeting.
The remit of the Audit Commission is defined by the
Charter of the Federal Grid Company, which is available at
www.fsk-ees.ru/eng/investor_governance_doc.html.
of the Energy Ministry
Born: 1980
Education: tertiary
Share of participation in the charter capital of the Company (%): 0
Share of ordinary Company shares held (%): 0
4. Dmitriy Kozlov – Deputy Director
of the Energy Ministry Department
Born: 1981
Education: tertiary
Share of participation in the charter capital of the Company (%): 0
Share of ordinary Company shares held (%): 0
5. Yevgeniy Krylov – Department Head of Rosimushestvo
In 2009, the Company had Audit Commissions of two
convocations (of the 2008 and 2009 convocation).
(Russian State Property Management Agency)
Born: 1972
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Education: tertiary
Share of participation in the charter capital of the Company (%): 0
Share of ordinary Company shares held (%): 0
to members of
Compensation
the Audit Commission
is paid on the basis of the Provision on the Payment of
Remuneration and Compensation to Members of the Audit
Commission approved by the Federal Grid Company AGM
on 30.06.2008.
No compensation was paid to members of the Audit
Commission in 2009.
6– 6. HR Policy
The objective of the corporate HR policy is to ensure the
availability of skills and expertise in the Company and
its subsidiaries, and to facilitate the productive use and
development of human resources.
Staff Numbers and Structure
The total number of staff employed by the Company as on
31.12.2009 was 11,933 people.
Over the reporting period, the total number of employees
increased by 6.7%. This rise resulted from the implementation
of the programme of launching new energy facilities and
taking over existing facilities from MRSK.
The decrease in the number of staff employed by Federal
Grid Company in 2008 compared to 2007 was the result
of employee transfers from Federal Grid Company to
the following subsidiaries and branches established in
accordance with the decision of the Federal Grid Company
Board of Directors on 13.11.007:
> Main Electricity Grid Service Company of the Unified
National Electric Grid (Glavsetservice UNEG);
> Specialised Electricity Grid Service Company of the Unified
National Electric Grid (Elektrosetservice UNEG);
> Engineering and Construction Management Centre of
Unified Energy System (CIUS EES).
Federal Grid Company staff structure:
Staff category
Total
Administrative and managerial staff
Staff structure by specialisation
Grid operation staff
Including production staff
Maintenance staff
Mechanisation and transport staff
2008
11,181
3,815
10,613
6,242
44
524
2009
11,933
4,640
11,418
6,900
2
513
One of the key objectives of the Company’s HR policy is to
improve the skills and expertise of the staff. To this end, the
Company is developing comprehensive training programmes
aimed at improving technical skills and fostering innovative
thinking. More than 40% of the employees particpate in
corporate training programmes every year.
Another objective of the corporate HR policy is to attract young
specialists. As part of this effort, the Company has a number
of programmes for technology students, including stipends,
internships and open day events. The Company has created a
reserve pool of qualified specialists.
The Company encourages professionalism, dedication and
commitment with the help of various corporate, industrial and
state awards. More than 250 staff members have received
such awards.
HR Management
The Company views its human resources as a core asset.
Retaining and developing talent is, therefore, one of the top
corporate priorities.
HR management includes maintaining staff numbers at an
optimum level, as well as effective planning of those numbers.
The electricity sector is a high-tech industry, so the requirements
to Federal Grid Company staff are very high. Some 68 per
cent of the employees have higher education, and 28 per cent
have taken specialised vocational education. Specialists and
managers make up 46 per cent of the Company’s workforce
– that percentage is higher than the share of low-skilled
employees. Some 75 per cent of the workforce is in the 30-to-
50-year-old age group.
One of the key goals of HR policy is staff retention. In 2008,
the staff turnover rate was 7.5 per cent, falling to 4.4% in 2009.
It is especially important for the Company to retain the most
experienced and qualified specialists, ensure the availability of
skills and expertise in the key areas, and attract young talent.
Fair compensation policy forms the cornerstone of the
Company's HR policy. Decent wages and a system of financial
bonuses help Federal Grid Company retain leading industry
specialists and form the basis of economic efficiency. The
Company operates a uniform system of compensation and
rewards for good performance. This system takes into account
the following factors:
> Nature of different job categories;
> Regional differences in the labour market;
> Performance and productivity figures for each subsidiary,
branch and individual staff member.
In order to maintain the required level of skills and expertise,
the Company also operates a system of staff appraisal and
training.
The appraisal system is an important instrument of HR policy,
as it enables the Company to:
> Have a clear picture of the skills
and expertise available to it;
> Form a reserve pool of specialists;
> Formulate the corporate training requirements;
> Provide a clear career path and room for growth for its
employees.
Appraisals of the Company's managerial staff are held every
two years. Some 2,431 staff members were appraised in
2009.
Federal Grid Company staff numbers in 2009:
Branch
Numbers as on Numbers as on Numbers as on
31.12.2007
31.12.2008
31.12.2009
Executive bodies
MES Centre
MES Centre Repair
and Management
MES North-West
MES North-West
756
2,693
2,886
1,167
Repair and Management
701
Auto-transport Enterprise
MES North-West
MES Volga
MES Volga Repair
and Management
MES South
MES South Repair
and Management
MES Urals
Auto-transport Enterprise
MES Urals
MES West Siberia
0
761
949
947
927
1,523
0
862
MES Urals and West Siberia
Repair and Management
1,630
MES Siberia
MES Siberia Repair
and Management
MES East
MES East Repair
and Management
Elektrosetservice UNEG
1,498
1,639
565
730
785
669
2,715
3
1,036
0
155
756
4
974
0
1,166
369
872
1
1,617
5
808
31
0
838
2,767
0
1,100
0
147
783
0
1,067
0
1,240
366
939
2
1,878
0
806
0
0
Total
21,019
11,181
11,933
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Corporate Governance and Management
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Corporate Governance and Management
The training and scientific Centre of
Federal Grid Company at the Moscow
Energy Institute
The main goal of the Centre is to provide
in-depth training to young specialists in
the areas of science most required by the
Company.
The Centre is a modern training platform
for current and potential employees of the
Company. The equipment is cutting-edge.
Classes are held in a computer laboratory,
lecture hall, and a so-called “high-voltage”
hall where operating models of real
substation equipment are installed.
Graduate students from Moscow Energy
Institute are eligible to study at the Centre,
forming classes that have a specific
curriculum geared towards the needs of the
Federal Grid Company.
Both Moscow Energy Institute staff and
specialists from the Company teach at the
Centre.
Innovator Day
In December 2009, Federal Grid Company
celebrated Innovator Day on the outskirts
of Moscow, with 200 of the top-performing
members of the Innovator competition
participating. Selection alone to participate
in Innovator Day is testimony to the high
value placed on a participant's contributions
to the project.
Just four of the 28 projects were selected for
the finals – the Expert Council for Innovator
Day, from which the best innovation was
selected.
The winning project was submitted by
Andrey Alexeev, Head of Information
Technology at the Volga-Don enterprise of
MES Centre. His project was titled a System
for Collecting Information from Disturbance
Recorders. Use of the innovative technology
has resulted in electrical equipment
operating more reliably.
with the leading national universities and colleges. As part
of these arrangements, students are offered internships at
various Federal Grid Company branches, and the best of
them are awarded individual scholarships. Participating
students are then invited to apply for Federal Grid Company
jobs after graduation.
Another successful way of bringing the young specialists
up to speed in their new workplace is to pair them up with
more experienced colleagues. This approach facilitates the
induction process and caters to individual training needs of
each new member of staff. Federal Grid Company is also
implementing a separate induction programme for new staff,
including young specialists and recent graduates. All these
approaches not only provide valuable training for new recruits
in their actual workplace duties, but also immerse them in the
corporate culture and traditions.
Fostering Employee Innovation
One of the key objectives of the corporate HR policy is
to encourage free thinking and generation of new ideas
by the employees. In July 2009, the Company launched
the Innovator project, which aims to collect, analyse and
implement innovative proposals. Employees are encouraged
to submit new ideas that can help improve productivity through
incremental improvements as well as radical changes.
Another goal of the project is to help build up the reserve pool
of specialists. A special reward system has been introduced
to encourage participation and achievement.
Most of the ideas and proposals collected so far – about
60% – fall under three main categories: operational grid
management, management of grid assets, and production
and technology management.
Below are the key facts and figures from 2009:
> 5,995 ideas and proposals were submitted;
> 13,000 staff members are involved in generating and
implementing innovations;
> 757 experts are involved in assessing the proposals;
> 424 projects were launched;
> 101 proposals were assessed by the regional councils of
experts;
> 44 proposals were implemented by the regional branches.
Staff Training and Development
The Federal Grid Company corporate training system was
created to:
> Train skilled specialists;
> Formulate a reserve pool of specialists;
> Facilitate staff members’ professional and personal growth.
There are two main types of training in the Company:
> Compulsory training;
> Career development training.
Compulsory training courses in areas such as work safety,
industrial safety and other workplace requirements are taken
by each staff member once every three years.
Career development training courses are delivered by
specialised training facilities and include the following areas:
– Special professional training to improve staff
members' skills and qualifications;
– Refresher courses to improve staff performance;
– Training of young specialists;
– Training of the reserve pool of specialists;
– Managerial training.
In 2009, a total of 4,905 staff members (42% of the total) took
various corporate training courses.
New training courses were developed and launched in 2009
for the following groups of employees:
> Operational staff at all new electricity substations
All operational staff of new substations operated by all
subsidiaries and branches took a pilot training course.
> Substation managers
A specialist training course was held for the managers of the
substations operated by MES South branch.
> Chief substation engineers
The School of Chief Engineers course, which is the first part
of the training programme for this category of staff, was held
at the Moscow Energy Institute.
The Company continues its programme of training specialists
for the reserve pool. It includes managerial and HR training,
economics and finance courses, and a personal managerial
efficiency course.
The training of young specialists is one of the top corporate HR
priorities. As part of the Young Specialist programme, Federal
Grid Company branches have made special arrangements
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Corporate Governance and Management
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Corporate Governance and Management
CORPORATE SOCIAL
RESPONSIBILITY AND
ACCOUNTABILITY
_ Commitment to Sustainable
Development
_ Social Policy
7
CORPORATE SOCIAL
RESPONSIBILITY
AND ACCOUNTABILITY
the requirements of
7–1. COMMITMENT TO SUSTAINABLE DEVELOPMENT
Sustainable development is the kind of business development
that meets
the present without
jeopardizing long-term priorities of the Company, and of the
society in general. Federal Grid Company is committed to the
principle of sustainable development. In practice this means
that the Company realises the need for maintaining a balance
between achieving its economic objectives and addressing
the social and environmental priorities. The Company
recognises its duty to the state and the public, and accepts
that the business decisions of today have to contribute to the
welfare of future generations.
Reports on Corporate and Social Responsibility
Federal Grid Company first declared its commitment to the
principles of sustainable development in 2007, when the
Corporate and Social Accountability chapter was included
in the 2006 Annual Report. Starting from 2008, Federal Grid
Company has been publishing full annual reports on social
accountability and sustainability. Two such reports (for 2007
and 2008) have been released to date. The 2009 report is in
the pipeline.
The reports are prepared taking into account the Global
Reporting Initiative (GRI) G3 recommendations on steady
growth, and in cooperation with the stakeholders - the
groups, organisations and individuals who are affected by
the Company and on whom it depends. This cooperation
takes into account the principles and methodology of the AA
1000 SES stakeholder engagement standard.
Engagement of Stakeholders
Federal Grid Company views dialogue with the stakeholders
as a cornerstone of the corporate social accountability policy.
Analysis of the expectations of the key stakeholder groups to
achieve an understanding of their position on the key issues
facing the Company forms the basis for improving corporate
social accountability standards.
Federal Grid Company aims to engage the following key
stakeholder groups:
> Shareholders and investors;
> Federal authorities;
> Regional authorities;
> Local communities;
> Customers;
> Suppliers and subcontractors;
> Employees;
> Not-for-profit organisations.
As part of its interaction with the stakeholders, the Company
has held or taken part in various events, including:
> General Shareholders Meetings;
> Meetings between the top managers and various
stakeholder groups;
> Publication of various information on the corporate website
and the Intranet;
> Exhibitions and conferences;
> Relations with the media;
> Implementation of the Information Disclosure Procedure
for Technological Connection of Energy Consumers
to the UNEG and the publication of a brochure on the
technological connection procedure;
> Working visits by the Chairman of the Management Board
to various Russian regions and meetings with the regional
authorities.
> Participation in drafting various pieces of legislation;
> Signing cooperation agreements with individual stakeholder
groups;
> Cooperation with various organisations and institutions;
> Public hearings;
> Customer surveys;
> Working meetings and talks with individual stakeholder
groups;
> Corporate events;
> Participation in social projects;
> Implementation of environmental and social policies.
Key 2009 Events in the Area of Corporate
Social Responsibility
> Public hearings on the environmental impact of large grid
facilities in the Sochi Region;
> Dialogue with stakeholders on various other aspects of
Federal Grid Company environmental policy;
> Submission of Federal Grid Company’s Social
Accountability and Corporate Stability Report to the National
Register of Corporate Non-Financial Reports;
> Federal Grid Company Management Board member
Aleksey Maslov’s report to the State Duma energy
committee on import replacement programme during the
construction and refurbishment of grid facilities;
> Formulation of a plan of interaction with external
stakeholders;
> A number of cooperation agreements signed with
the regional authorities, suppliers and large electricity
consumers;
Elena Orlova [ Head of 500 kV Chagino substation ]
Supporting and developing the Company's
corporate culture is every manager's
responsibility.
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Corporate Social Responsibility and Accountability
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Corporate Social Responsibility and Accountability
7– 2. SOCIAL POLICY
The corporate social policy is based on the following
priorities:
> Unconditional compliance with laws and regulations;
> Health and safety of the employees;
> Staff motivation through various social benefits;
> Developing human resources;
> Social partnership;
> Corporate culture;
> Corporate values and principles set out in the Corporate
Ethics Code;
> External social policy, including charity and sponsorship.
Social Programmes for Employees
Social programmes foster a long-term relationship between
the Company and its employees, and enable Federal Grid
Company to achieve its social responsibility goals.
Voluntary medical insurance is the Company's most popular
and effective social programme for staff members. It helps
retain staff and achieve savings by reducing the number of
work days lost to staff sickness by giving employees access
to high-quality healthcare.
The voluntary medical insurance programme involves 829
healthcare and medical rehabilitation facilities.
The private pension programme has a long history in the
energy industry. It is one of the reasons why many staff
members spend their entire careers working in this sector.
The Company finances larger pensions for employees who
have spent a certain number of years working in the industry.
These pensions are awarded for life. In 2009, the Company
spent RUB 132.3 mln on private pensions.
Federal Grid Company also offers financial support to staff
members in difficult personal circumstances, as stipulated
in the Provision on Compassionate Financial Assistance to
Individuals.
Corporate Culture
Federal Grid Company’s corporate culture is outlined in
the Corporate Ethics Code, which sets out the Company’s
values, traditions and principles. The Code's regulations are
compulsory for all employees.
Charity
As part of its commitment to social accountability, Federal
Grid Company takes charity and sponsorship very seriously,
focusing its efforts on three main areas:
> Supporting education establishments and sector
specialists;
> Supporting childcare facilities where the Company
operates;
> Supporting medical institutions and facilities.
In order to promote corporate culture and foster corporate
spirit, the Company holds various corporate events for its
employees:
> Celebration of traditional holidays, as well as professional
holidays, including Energy Industry Day and Company Day;
> Various events for the children of employees, such as New
Year parties and drawing competitions;
> Team-building events;
> Trips;
> Sporting events.
Gennady Belov [ Senior dispatcher at 500 kV Chagino substation ]
Reliability is the absolute priority of our
Company.
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Corporate Social Responsibility and Accountability
115
Federal Grid Company Annual Report 2009
Corporate Social Responsibility and Accountability
FINANCE
_ 2009 RAS Financial Statements
and Audit Report
_ Management Discussion
and Analysis (MD&A)
8
FINANCE
8–1. 2009 RAS FINANCIAL STATEMENTS AND AUDIT REPORT
The information presented below has been extracted by
Federal Grid Company management from a complete
set of 2009 financial statements prepared under the
statutory Russian Accounting Standards (RAS), audited
by PricewaterhouseCoopers Audit. The audit report was
issued on a complete set of RAS financials consisting of
the statements presented below and notes to financial
statements.
Please visit
http://www.fsk-ees.ru/eng/investor_finance_ifrs.html
PricewaterhouseCoopers Audit
White Square Office Center
10 Butyrsky Val,
Moscow, Russia, 125047
Telephone: +7 (495) 967-6000
Fax: +7 (495) 967-6001
www.pwc.ru
AUDITOR REPORT ON STATUTORY FINANCIAL
(ACCOUNTING) STATEMENTS 2009
[Translation from the original Russian]
To the shareholders of Federal Grid Company:
Auditor
PricewaterhouseCoopers Audit
State registration certificate No. 008.890, issued by Moscow Registration Bureau
on 28.02.1992.
Certificate of inclusion in the Unified State Register of Legal Entities regarding
a legal entity registered before 01.07.2002, No. 1027700148431, issued by the
Interregional Inspectorate of the Russian Ministry of Taxes and Levies, No. 39 for
the Moscow City, on 22.08.2002.
Member of non-profit partnership Audit Chamber of Russia (NP ACR) being a self-
regulatory organisation of auditors, registration number 870, in the register of NP
ACR members.
Major registration record number (ORNZ) in the register of auditors and audit
organisations: 10201003683
Client
Federal Grid Company
5a Akademika Chelomeya Street, Moscow, 117630
State registration certificate No. 21081, series LO-002, issued by Leningrad Region
Registration Bureau on 25.06.2002, number in the Unified State Register of Legal
Entities No. 00/03124.
Certificate of inclusion in the Unified State Register of Legal Entities regarding a legal
entity registered prior to 01.07.2002, No. 1024701893336, issued by the Inspectorate
of the Russian Ministry of Taxes and Levies for the Tosno District of Leningrad Region
on 20.08.2002.
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Finance
PricewaterhouseCoopers Audit
White Square Office Center
10 Butyrsky Val,
Moscow, Russia, 125047
Telephone: +7 (495) 967-6000
Fax: +7 (495) 967-6001
www.pwc.ru
PricewaterhouseCoopers Audit
White Square Office Center
10 Butyrsky Val,
Moscow, Russia, 125047
Telephone: +7 (495) 967-6000
Fax: +7 (495) 967-6001
www.pwc.ru
AUDITOR’S REPORT
4
In our opinion, the Statutory Financial (Accounting) Statements of the
Company attached to this report have been properly prepared to present
fairly, in all material respects, the financial position of the Company as at
31.12.2009 and financial results of its operations for the period from 1
January up to 31.12.2009 in accordance with the legislation of Russian
Federation applicable for Statutory Financial (Accounting) Statements
preparation.
01.04.2010
AUDITOR’S REPORT
on Statutory Financial (Accounting)
Statements of Federal Grid Company
To the Shareholders of Federal Grid Company:
1
2
3
We have audited the attached Statutory Financial (Accounting) Statements
of Federal Grid Company (hereinafter – the Company) for the period from
01.01.2009 up to 31.12.2009, inclusive. Statutory Financial (Accounting)
Statements of the Company consist of the Balance Sheet, Profit and Loss
Account, Statement of Changes in Equity, Cash Flow Statement, Supplement
to the Balance Sheet, Explanatory Notes (hereinafter, the statements as a
whole are called Statutory Financial (Accounting) Statements). The Statutory
Financial (Accounting) Statements were prepared by the management
of the Company in accordance with the legislation of Russian Federation
applicable to Statutory accounting reports. The Statutory Financial
(Accounting) Statements differ to a significant degree from those prepared
in accordance with International Financial Reporting Standards (IFRS).
Preparation of the Statutory Financial (Accounting) Statements is the
responsibility of management of the Company. Our responsibility as auditors
is to express our opinion on the fair presentation, in all material respects, of
the Statutory Financial (Accounting) Statements based on our audit.
We conducted our audit in accordance with The Federal Law titled On
Auditing Activity, Federal Auditing Standards, and International Standards
on Auditing and Company internal standards.
Our audit was planned and performed to obtain reasonable assurance
about whether the Statutory Financial (Accounting) Statements are free
of material misstatement. The audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the Statutory Financial
(Accounting) Statements, assessing compliance with accounting principles,
techniques and rules of the Statutory Financial (Accounting) Statements
preparation, evaluating significant estimates made by the management of
the Company and the overall Statutory Financial (Accounting) Statements
presentation. We believe that our audit provides a reasonable basis
for our opinion on the Statutory Financial (Accounting) Statements.
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8 –2. MANAGEMENT DISCUSSION AND ANALYSIS (MD&A)
This report represents a review of the financial position
and performance of Federal Grid Company and should be
regarded together with the Company’s accounting reports for
2009, as prepared in accordance with Russian Accounting
Standards (RAS).
The Company continues to invest significantly in property,
plants and equipment for the purpose of development and
reliable functioning of the UNEG. The volume of construction,
reconstruction and renovation of property, plant and
equipment in 2009 was RUB 106,044 mln (2008 – RUB
136,221 mln).
Overview of Operations
Federal Grid Company owns, manages and ensures the
operations of the Unified National (All-Russian) Electric Grid
(UNEG), which implies the integrity of technological control
and provision of services to electricity market participants for
value on a contractual basis. Such services include energy
transmission via the UNEG, whose length as on 31.12.2009 is
118 thousand km. The Company became the legal successor
of RAO UES of Russia upon restructuring on 01.07.2008.
The Company owns 44 branches. The Company’s Head
Office is located in Moscow, and the average number of staff
for 2009 is 11,302 people (for 2008 – 14,526 people). The
Company’s shares are listed on the Russian Trade System
(RTS) and Moscow Interbank Currency Exchange (MICEX),
as of July 2008.
The Company’s major activity in the Russian electricity market
is providing consumers with services related to electricity
transmission via the UNEG. In accordance with Russian
legislation, services for electricity transmission via the UNEG
are the prerogative of the Federal Grid Company. Such
services relate to monopolistic activities and are regulated by
the state. The cost of the Company’s services for electricity
transmission is based on tariffs set by the Federal Tariff
Service.
The number of consumers of the Company’s electricity
transmission services grows every year, which partially results
from activities related to new consumers’ technological
connection to the UNEG. In 2009, the Company’s consumers
numbered 121 companies technologically connected to
the UNEG, including distribution grid companies (DGCs);
independent grid companies (GCs); energy sales companies
(ESCs); and major electricity-consuming companies.
In 2009, the Company used the following sources to finance
its investment activities:
> RAO UES funds from the sales of assets owing to
restructuring – 36%;
> funds included in the electricity transmission tariff – 25%;
> placement of treasury shares – 20%;
> other sources – 19%.
Together with electricity transmission services, the Company
renders services
technological connection of new
consumers to the UNEG. In 2009, the Company’s revenue
from the provision of such services was RUB 3,053 mln (2008
– RUB 45 mln).
for
Key Factors Impacting Performance
Major factors that impacted the Company’s economic results
for 2009 are as follows:
> consequences of the financial crisis and the resulting
impairment of investments received by the Company after
RAO UES restructuring;
> growth of the declared capacity, partially owing to
technological connection of new consumers;
> change in established tariffs for electricity transmission via
the UNEG.
Relations with the Government
As on 31.12.2009, 79.11%* of the Company’s ordinary voting
shares were owned by the state (as on 31.12.2008 – 77.66%),
represented by the Federal Agency for State Property
Management.
The Russian Federation has a direct impact on the Company’s
activity by regulating its tariffs through the Federal Tariff Service
(FTS). The investment programme of Federal Grid Company is
subject to approval by the Russian Federation Government.
changes in the value of companies’ net assets over two
years. Investment in Sangtudinskaya HPP-1 was assessed
based on the discounted cash flows method. In 2009, the
Company recorded a provision for investment impairment
in the amount of RUB 3.5 bln which was included in other
expenses.
Financial difficulties of some of the Company consumers
affected the terms of accounts receivable collection. Resulting
from the Company’s assessment of accounts receivable and
probability of their collection in 2009, a doubtful debt provision
of RUB 5.9 bln was recorded, including a provision for
advances issued in the amount of RUB 2.7 bln. The doubtful
debt provision related to the advances issued was recorded
with regard to the following major contractors – Svyazstroi
(advance for building a private digital mobile radio network
for the utilities system of the Mid-Volga Region; provision of
RUB 1.1 bln recorded); Interspetsstroi (provision of RUB 1.0
bln recorded).
implements
The Company
target Federal Programmes
using federal budget funds. These programmes include the
Programme for Electric Grids Development in the Sochi Region
for the period of 2008–2014 to support Olympic facilities;
Programme for Economic and Social Development of the Far
East and Trans-Baikal area for the period up to 2013 (energy
supply of the East Siberia-Pacific Ocean oil pipeline; facilities
used for the summit of Asia-Pacific Economic Cooperation).
In the course of its day-to-day activities, the Company interacts
with other state-controlled entities. In particular, most of the
Company’s services consumers are controlled by the state.
*Considering the amendments to Federal Grid Company Charter
of 11.03.2010 reflecting changes in Charter Capital resulting from additional
issue of shares finalised on 25.12.2009.
Regulation and Restructuring
of the Utilities Industry
In July 2008 the target model of the Company’s operation
was completed by merger of RAO UES of Russia and the
UNEG trunk pipeline grids into the Company. As a result of
the restructuring, the Company is the legal successor of RAO
UES of Russia.
The Company owns all the assets it obtained during the
restructuring, including cash, promissory notes, and non-core
assets, including shares of electricity generating companies
that were revalued in 2009 owing to the decrease in their
market value caused by the financial crisis of 2008–2009. A
part of obtained assets are planned for sale. The Company
plans to use funds received from sales of the above assets as
a financing source for its investment programme.
Consequences of the Global Financial Crisis
Starting from 2008, the Russian economy was affected by
the global financial crisis characterised by decreasing mutual
trust in the areas of investment and lending. Increased credit,
currency and price risks resulted in negative developments in
the economy, particularly significant growth in prices, volatility
of exchange quotations of securities, a reduction in industrial
production, as well as a rise in the number of loan defaults
and bankruptcies.
As a result of the financial crisis, the market value of utilities
companies received by the Company after RAO UES of
Russia restructuring decreased significantly. The Company
recorded these investments at their current market value as
on 31.12.2009. A corresponding loss of RUB 79.9 bln was
recorded within other expenses.
In addition, the Company analysed its non-marketable value
investments for impairment. The analysis took into account
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Finance
Financial Results
RUB mln
Income and expenses from operating activities
Revenue from operating activities,
85,077.8
68,485.0
16,592.8
24.2%
2009
2008
Difference, RUB mln
Change,%
including:
Electricity transmission services
Other activities
Cost of operations,
including:
Electricity transmission services
Other activities
Management and administrative expenses
Operating profit
Other income and expenses
Interest income
Interest expense
Gain on investments in other organisations
Other income
Other expenses
80,173.3
4,904.5
66,128.8
2,356.2
14,044.5
2,548.2
21.2%
108.1%
(64,079.9)
(58,977.3)
5,102.6
8.7%
(62,732.1)
(1,347.8)
(57,107.7)
(1,869.6)
5 624.4
(521.8)
(5,128.3)
15,869.6
(4,351.9)
5,155.8
776.4
10,713.9
7,292.0
(1,717.5)
717.2
6,806.4
(2,385.6)
223.3
105,760.5
31,347.1
(181,970.6)
(34,970.0)
485.6
(668.1)
493.9
74,413.4
147,000.5
Profit/(loss) before taxation
(54,048.8)
6,176.8
(60,225.6)
Deferred tax assets
Deferred tax liabilities
Current profit tax
Other similar mandatory payments
Profit tax adjustment for prior periods
Net profit/(loss) for the period
(180.2)
(722.0)
(4,876.3)
(4.6)
(34.0)
6.8
(216.9)
(3,224.9)
461.5
1,262.1
(187.0)
(505.1)
1,651.4
(466.1)
(1,296.1)
(59,866.0)
4,465.5
(64,331.5)
Revenue from Electricity Transmission Services
RUB mln
Revenue from electricity transmission services,
including:
Payment for maintenance of electric facilities included in the UNEG
Payment for standard process losses of electricity in the UNEG
2009
80,173.3
66,682.1
13,491.2
9.8%
(27.9%)
17.8%
3.1-fold
7.1%
(28.0%)
3.2-fold
3.4-fold
5.2-fold
9.8-fold
27.5-fold
2.3-fold
51.2%
(100%)
(103%)
14.4-fold
2008
66,128.7
52,564.1
13,564.6
Data for the analysed period of 2008–2009 reflect a growth
in revenue from providing electricity transmission services.
The growth of revenue by RUB 16,592.8 mln, or 24.2%, was
recorded for 2009 compared to a similar period for 2008.
electric facilities were the increase of tariffs for the UNEG
facilities maintenance by 21% and volume of declared
capacity by 4%.
In 2009, key factors of revenue growth from electricity
the maintenance of
transmission services regarding
Based on 2009 results, revenue from the provision of services
related to regulated operations (less revenue from technical
connection) amounts to 94.2% of total revenue.
% of the total result 2008
% of the total result
Change,%
Cost of Services Rendered
RUB mln
Cost components
Depreciation of property, plant and equipment
Repairs and maintenance
Electricity purchase
Payroll expenses and social expenses
Property insurance expenses
Rental expenses
Property security expenses
Other expenses
2009
22,562
14,127
13,433
7,028
1,094
772
766
4,298
35
22
21
11
2
1
1
7
20,412
9,624
11,419
7,244
1,185
3,329
698
5,066
35
16
19
12
2
6
1
9
Total cost of provided services
64,080
100
58,977
100
10.5
46.8
17.6
(3.0)
(7.7)
(76.8)
9.7
(15.2)
8.7
Depreciation of Property, Plant and Equipment
Increase in the expenses for depreciation of property, plant
and equipment in 2009 results from the merge of trunk grid
companies’ grids as part of the industry restructuring and
forming of a unified Company managing the UNEG facilities
and revaluation of property, plant and equipment as well as the
accrual of depreciation of new facilities commissioned at the
end of 2008 and 2009.
Payroll Expenses and Social Expenses
A lower number of the Company’s employees versus 2008
give rise to the change in payroll expenses and social
expenses by 3%.
Electricity Purchase
In 2009, expenses for electricity purchase increased by 17.6%
versus the same period for 2008. Such a growth results from a
16.3% increase in tariffs for electricity and capacity purchased
at the wholesale electricity (capacity) market (WECM) and
1.2% increase in volumes of purchased electricity.
Repairs and Maintenance
Repair and maintenance expenses increased by 48.6%
compared to 2008. Higher expenses related to this item are
owing to the following reasons:
> acceptance of trunk grid companies’ grids and higher
maintenance expenses;
> restructuring of (spin-off servicing subsidiaries) and
corresponding transfer of expenses for repairs from other
items (payroll, UST, business trip expenses, raw and other
materials);
> increase in the physical scope of work, including work
as per target programmes (expanded areas of line
route clearance, increased number of replaceable
insulators etc.);
> additional expenses for managing the accident at the
Sayano-Shushenskaya HPP.
Rental Expenses
These expenses include expenses for rent of production
property (UNEG facilities), and expenses for the rent of
offices and other administrative property of the Company’s
production divisions. Rental expenses decreased by 76.8%
in 2009 compared to 2008. This related to the restructuring
of trunk grid companies (their merger with Federal Grid
Company) and consequent decrease in payments for rent of
trunk grid companies’ grids with a corresponding increase in
depreciation charges and tax payments (property and land).
136
Federal Grid Company Annual Report 2009
Finance
137
Federal Grid Company Annual Report 2009
Finance
Property Protection Expenses
Increase in protection expenses by 9.7% in 2009 is
associated with the transfer of trunk grid companies’ grids
for maintenance and inflation.
Other Expenses
The decrease in other expenses is explained by a technical
factor – cost reallocation to repair and maintenance through
the spin-off of servicing subsidiaries as well as taking other
steps as per the Cost Reduction Programme.
Management and Administrative Expenses
RUB mln
Line item
Payroll expenses and social expenses
Information services and software expenses
Depreciation of property, plant and equipment and intangible assets
Production services
Material-related expenses
Rental expenses
Property insurance expenses
Property protection expenses
Communication services
Advisory services
Other expenses
2009
1,031.6
937.6
855.1
561.9
469.4
415.4
5.8
30.4
201.1
163.1
457.0
as % of total
2008
as % of total
Difference, %
20
18
17
11
9
8
0
1
4
3
9
1 114.8
851.2
436.9
328.1
304.6
388.2
21.7
39.8
121.6
299.7
445.3
26
20
10
8
7
9
0
1
3
7
10
100
(7.5)
10.2
95.7
71.3
54.1
7.0
(73.1)
(23.8)
65.4
(45.6)
2.6
17.8
Total management and administrative expenses
5,128.3
100
4,351.9
Depreciation of Property, Plant and Equipment
The main reason for increase in depreciation charge in 2009
was new property, plant and equipment (reconstruction
of ventilation system in the office located at Bolshoi
Nikolovorobinsky Lane.) and implementation of new software
(intangible assets – Personnel Management computerised
system, computerised management document flow, etc.)
that resulted in the increase in depreciation charge by 96%
versus 2008.
Payroll and Social Expenses
Decrease in payroll and social expenses by 7.5% in 2009 vis-
aà-vis 2008 is explained by the structural changes and transfer
of personnel to servicing subsidiaries.
Material-related Expenses
Increase in the material expenses is explained by the increase
in expenses for communication channels management (put
into operation of the third line of Unified Digital Communication
Network) and additional expenses for servicing the new
ventilation system in the office located at B. Nikolovorobinsky
per. and associated expenses for office repair.
Rental Expenses
Rental expenses include the expenses for renting communication
systems. Rental expenses increased by 7% in 2009 as
compared to 2008 that is associated with the conclusion of the
contract for renting optical fibre network within the framework of
Unified Digital Communication Network operation project (RUB
41.7 mln). If adjusted for the effect of the above contract, there
is a decrease in rental expenses, including those related to the
office premises by 4%.
Advisory and Legal Services
Decrease in advisory expenses by 46% is associated with the
significant expenses incurred in 2008, within the framework
of RAO UES of Russia restructuring support.
The following factors had a significant impact on the above
increase: increase in the declared capacity of consumers by
4%, increase in the established tariff by 21.2% in 2009; revenue
from technical connection amounting to RUB 3.1 bln.
Other Production-related Services
Significant increase in the above expenses is explained by
the Company’s production needs and considers casual works
performed in 2009 as per special purpose programmes on
property valuation, development of the UNEG development,
preparation of the forecasted balances of electricity and
capacity. The above expenses decreased by 24% versus
2008 provided the above factors are not considered.
Operating profit
In 2009 operating profit increased by more than threefold as
compared to 2008 owing to higher-than-anticipated growth
of revenue as compared with cost. The Company’s revenue
increased by 24.2%; however, the increase in the cost was
only 8.7%.
Interest income/expense
Interest income represents income on debt investments and
income from placement of available cash in bank accounts
and deposits. A significant part of income-bearing investments
was received by the Company as a result of RAO UES of
Russia restructuring on 01.07.2008.
In 2009, interest income increased by 7.1% versus 2008 as a
result of prolongation of a period for recognising income (in
2008, income on a major part of investments was recognised
during the second half of a year).
In 2009, the Company decreased total debt from RUB 34,161
mln as on 01.01.2009 to RUB 13,481 mln as on 31.12.2009
that resulted in the decrease in interest expense by 28% in
2009 as compared to 2008.
Other income
RUB mln
Description
Repayment of promissory notes
Income from release of bad debt provision
2009
81,068.3
2008
22,629.0
(including Index of energy power industry - RUB 17.8 bln)
20,017.4
1,722.6
Income from disposal of investments
(in 2009 – mainly the sales of Kuzbassenergo shares)
Other income
Total
2,729.3
1,945.4
105,760.5
5,364.2
1,631.3
31,347.1
138
Federal Grid Company Annual Report 2009
Finance
139
Federal Grid Company Annual Report 2009
Finance
Other expenses
RUB mln
Description
Effect of revaluation of equity investment at market value
Repayment of promissory notes
Expenses from disposal of investments
(in 2009 – mainly the sales of Kuzbassenergo shares)
Doubtful debt provision
Provision for investments impairment
Net book value of the property, plant and equipment and construction in progress written-off
Property tax
Other
Total
2009
79,905.9
79,281.6
9,793.5
5,902.1
3,502.6
634.9
605.2
2,344.7
181,970.6
2008
0
22,830.7
3,252.1
2,424.9
2,603.9
571.9
481.8
2,804.5
34,970.0
Company Net Assets
RUB mln
Description
2008
2009
nominal
Taking into account
the contributions
in the Charter Capital*
Net assets
666,470.9 579,745.7
619,923.6
* In 2009, Federal Grid Company was in the process of increasing its charter
capital owing to the issue of the additional capital. As a result, the accounts
payable (other current liabilities) of the 2009 accounting reports includes
the current payables to the founding parties related to the contributions in
the charter capital amounting to RUB 40.2 bln. In the first quarter of 2010,
following registration of the report on the results of the additional issue of
shares in the Russian Federal Service for Financial Markets, these payables
were reclassified as charter capital of Federal Grid Company.
According to the accounting reports, the net assets of Federal
Grid Company for 2009 decreased by RUB 86,725.2 mln vis-
aà-vis the similar period for 2008 and by RUB 46,547.3 mln,
if the latest contribution in the charter capital is taken into
account. The decrease in the net assets is mainly explained by
impairment of investments that resulted in a net loss for 2009.
In addition, the changes in the accounting policies of Federal
Grid Company related to the accrual of doubtful debt provisions
on the advances issued and other liabilities had impact on the
decrease in net assets. As on 31.12.2009, the accrued provision
on the advances issued and other liabilities amounted to RUB
18,804 mln (as on 31.12.2008 – RUB 33,836 mln).
Income/Expenses from Disposal of Investments
The Company's repayment of third-party promissory notes
resulted in income of RUB 1,786.7 mln in 2009 (in 2008, this
was a loss of RUB 202 mln).
deterioration in the counterparty’s financial standing and
respective deterioration of payment discipline had an impact
on the accruing doubtful debt provision on the advances
paid.
Company Investment Activity
Property, Plant and Equipment Put into Operation in 2009
In 2009, the Company put into operation the following property, plant and equipment:
RUB mln
Current Profit Tax
The current profit tax for 2009 increased by 51% versus 2008
and amounted to RUB 4,876 mln. According to tax accounting
data, the 2009 taxable profit amounted to RUB 24,381 mln. In
2008, the taxable profit amounted to RUB 13,437 mln. At the
same time, the reduction of profit tax rate from 24% in 2008
to 20% in 2009 resulted in the respective decrease in profit
tax in 2009.
Net Profit (loss) for the Reporting Year
The Company's net financial result for 2009 was a loss
amounting to RUB 59,866 mln (in 2008 – profit amounting to
RUB 4,465 mln). As described above, the main reason for the
negative financial result was the recording of a loss resulting
from changes in the current market value of quoted equity
investments. The analysis performed shows that with regard
to operating activities the Company experienced an increase
in the operating profit by more than 3 times, but at the same
time the external factors (decrease in the shares quotation,
non-payment of counterparties) did not allow Federal Grid
Company to generate net profit in 2009.
Financial result from disposal of other investments was a loss
amounting to RUB 7,064 mln in 2009 including a loss from
sales of TGK-12 shares amounting to RUB 7,017 mln (in 2008
– income amounting to RUB 2,112 mln).
Impairment of Investments
As on 31.12.2009, the Company recorded a loss related to the
revaluation of equity investments at market value amounting
to RUB 79,906 mln within other expenses. Also, in 2009, the
Company accrued the provision for impairment of non-quoted
investments, for which the market value is not determinable
amounting to RUB 3,502 mln, including investments in
Sangtudinskaya HPP-1 – RUB 2,479 mln, investments in Mobile
Gas-Turbine Electric power plants – RUB 941 mln. In 2008, the
Company did not record revaluation of quoted equity investments;
the accrued provision for impairment of investments for which
the current market value is not determinable amounted to 2,604
mln, including the investments in Mobile Gas-Turbine Electric
power plants amounting to RUB 2,584 mln.
Doubtful Debt Provision (for the impairment of accounts
receivable and advances issued)
As a result of the assessment of accounts receivable and
their collection prospects, the Company accrued a doubtful
debt provision amounting to RUB 5,902 mln; in addition, the
Company accrued the provision amounting to RUB 2,734
bln related to the advances issued owing to the changes
in the accounting policies for accruing the provisions (in
2008, no provision on advances issued was accrued). The
Property, plant and equipment commissioned in 2009*
Capacity
Useful life of property,
Cost
введенных в эксплуатацию в течение 2009 г.*
commissioned
plant and equipment (years) (RUB mln net of VAT)
Reconstruction of 220 kV Cherepet-Orbita high voltage line
38.4 km
Construction of high voltage line 330 kV
Kolskaya NPP-Knyazhegubskaya HPP-PS; 330/110/35 kV
Loukhi-Putkinskaya HPP-ORU; 330 kV Ondonskya HPP (second area)
107 km, 2х125 МVА
200 kV Psou-Poselkovaya high voltage line with PS 220 kV Poselkovaya
46.8 km, 2х25 МVА,
500 kV Far East -Vladivostok high voltage line with PS 500 kV Vladivostok
200 kV Oznachennoe (Beya)-Askiz high voltage line
220 kV Zarya-Yartsevo High voltage line
Reconstruction of 220 kV Vostochnaya-Volkhov-Severnaya
double-chain high voltage line
Expansion of 220 kV Nagornaya (facility AT-3) substation
3х40 МVА
501 МVА,
94.6 km, 2х6 km
50.1 km
8.3 km
18 km
200 МVА
220 kV Yablonovskaya substation with 220 kV Krasnodarsksya TEC-Yablonovskaya
high voltage line and 220 kV Yablonovskaya-Afipskaya high voltage line
250 МVА, 33+16 km
Reconstruction of 220 kV Slavyanskaya Facility substation of the second AT
125 МVА
220 kV Kirillovskaya substation (STK)
2х50 МVАр
500 kV Emelino substation with entries of high voltage line 500 kV, 220 kV
501 МVА, 180 МVАр
500 kV Soboli substation with entries of high voltage line 220 kV,
110 kV (the first start-up stage)
Severnaya substation (AT No. 2)
2х250 МVА, 2х5 km
125 МVА
45
45
45
45
45
45
45
35
35
35
35
35
35
35
474
1,292
3,111
3,506
888
158
512
326
1,272
697
114
2,349
1,524
153
140
Federal Grid Company Annual Report 2009
Finance
141
Federal Grid Company Annual Report 2009
Finance
Property, plant and equipment commissioned in 2009*
Capacity
Useful life of property,
Cost
commissioned
plant and equipment (years)
(RUB mln net of VAT)
220 kV Taturovo Complex substation technical upgrading and reconstruction
2х63 МVА, 2х25 МVАр
500 kV Tomskaya substation (CSR facility)
AT-2 facility with capacity of 125 MVA at 220 kV Bachatskaya substation
Expansion of 500 kV Trachukovskaya (facility AT 3) substation
500 kV Peresvet substation with entries of high voltage line 500 kV
Surgutskaya GRES-2-Ilkovskaya and high voltage line 220 kV,
high voltage line 500 kV Somkinskaya-Peresvet
Expansion of 220 kV Urengoi (CSR facility 220 kV) substation
Expansion of 220 kV Nadym (CSR facility 220 kV) substation
Reconstruction of PS 500 kV Irtysh CSR facility
Expansion and reconstruction of outdoor switchgear 500 kV
Kashirskaya GRES-4 with AT 500/220 kV facility
Reconstruction of 220 kV Psou substation
Complex reconstruction of 500 kV Ochakovo substation
Reconstruction of 330 kV Yuzhnaya substation
Reconstruction of 500 kV Tyumen substation (501 MVA, 125 MVA)
External electricity supply, Valaam
240 МVАр
125 МVА
501 МVА
2х501 МVА,
180 МVАр, 50 km
(entries 500),
66.8 km (entries 220),
57.5 km (overhead
transmission line 500)
100 МVАр
100 МVАр
180 МVАр
500 МVА
200 МVА
4 АТ 500/220 kV
by 500 МVА,
5 АТ 220/110 kV
by 250 МVА,
4 Т 220/10 kV
by 100 МVА
3х1.3 km АТ
330/220 kV
2x250 МVА
7х167 МVА,
2х125 МVА,
9х60 МVАр
2х16 МVА,
2х6.3 МVА,
2х21.5 km,
2х24.7 km
Entries in high voltage line 220 kV Dagomys-Psou at CSR 220 kV of Sochinskaya TEC 2х3.5 km
Entries of high voltage line 220 kV
Magistralnaya- Yuzhno-Balykskaya GPKh at substation 220 kV Sredniy Balyk
48 km
Replacement of CS by CTK at substation 500 kV Zarya
BSK and CSR at 220/110 kV Kogalymskaya substation
BSK and CSR at 220/110 kV Progress substation
BSK at 500 kV Oznachennoe substation
160 МVАр
2х25 МVАр, 25 МVАр
2х25 МVАр, 25 МVАр
2х104 МVАр
35
35
35
35
35
35
35
35
35
35
35
35
35
35
45
35
35
35
35
35
941
520
178
668
5,258
222
240
430
1,327
1,984
14,398
7,162
4,906
2,203
102
354
347
142
142
353
Investments in Financial Assets
The Company has a number of long-term investments in
the Company’s subsidiaries and associated companies and
shares of other organisations, the ownership interest in which
does not provide for control or significant influence.
Investments in subsidiaries
RUB mln
Company name
Activity
31.12. 2009
2009
revenue
Net assets as on
31.12. 2009,
as per RAS
Share in
Book value
the charter
(including
capital, %
the provision)
S&T Elektroenergetika
R&D
100.00
3,895.8
514.8
1,161.8
APBE
System-wide forecast and analytical
works in electric energy
100.00
Volgaenergosnabkomplekt
Supplies of materials and equipment
100.00
Glavsetservice UNEG
Technical servicing and repairs
of electricity supply grid facilities
Mobile GTES
Generation of electricity
Power Generation Centre
Communication services
100.00
100.00
100.00
3.5
0.0
1.0
10,594.3
20.0
479.3
0.0
8,970.4
1,166.1
1,107.9
172.0
(343.3)
10,153.7
120.7
100.00
55.1
7,9
47.8
Power Generation IM
CIUS EES
Electronic and
Digital Technologies
Functions of a developer and constructor
related to the capital construction,
reconstruction and technical upgrading
of electricity supply grid facilities
NPKenergo
No activity
Elektrosetservice UNEG
Technical servicing and repairs
100.00
100.00
of electricity supply grid facilities
100.00
ESSK
Agency activity related to purchases
100.00
Index of Energy-FGC UES
Sales of securities
100.00
Chitatekhenergo
Communication services, r
econstruction of UNEG facilities
and communication lines maintenance
100.00
4.1
196.1
Power Generation Centre
Maintenance engineering service
of buildings, facilities and premises
98.56
97.4
0.0
Nurenergo
Transmission, distribution
and sales of electricity
77.00
Tomsk Backbone Grid
Transmission, distribution of electricity
52.03
833.0
0.0
953.8
133.9
0.0
1,707.6
0.0
3,728.2
130.4
454.4
0,0
866.4
0.2
763.2
2,188.2
114.4
51.1
214.6*
936.5
6.7
1,126.3
118.1
(11,037.7)
26.3
5.7
(2,037.0)
1,224.9
319.1
7,116.1*
(*) Assets are subject to acceptance and state registration procedures and, subsequently, they are included in property, plant and equipment for accounting
purposes.
GruzRosenergo IPS
Electricity transmission services
GVC Energetiki
Lessor
50 plus
1 share
50.00
142
Federal Grid Company Annual Report 2009
Finance
143
Federal Grid Company Annual Report 2009
Finance
Company name
Activity
31.12. 2009
2009
revenue
Net assets as on
31.12. 2009,
as per RAS
Investments in the shares of other companies
RUB mln
Company name
Share in
Book value
the charter
(including
capital, %
the provision)
Sangtudinskaya HPP-1
OGK-6
Energomarket
Trest SVES
SOVASATOM
Mosenergo
Natsnenergo
IVStend-Ivanovskaya GRES
Sibenergoholding
Tsentrenergoholding
Investments in the shares of other companies
31.12. 2009
Share in the charter
capital, %
Book value (including
provision), RUB mln
14.48
9.60
8.50
6.14
3.38
3.37
1.90
0.83
0.00072
0.00066
551.256
2,317.319
0.001
0.000
0.001
4,419.858
0.040
3.000
0.006
0.006
7,291,487
The majority of investments in the shares of companies listed in the table above were received by the Company as a result of
RAO UES of Russia restructuring. The Company is considering the possibility of selling the investments.
SMUEK
DESP
Energy company management
50.00
0.0
**
**
Comprehensive design
in electric energy industry
1 share ***
0.0
1,069.0
170.6
Investments in subsidiaries
18,221.6
22,100.5
9,288.4
*At the following exchange rate: RUB 100 = 5.8 lari
**The company was liquidated on 15.02.2010
***Other shares of the DESP are owned by NTTs of electrical power industry, wholly owned subsidiary of the Company
Index energy power industry – Federal Grid Company is the owner of minority interest of energy companies
Investments in associated companies
RUB mln
Company name
Activity
31.12. 2009
Выручка
2009
Net assets as
Share
Book value
in the charter
(including
capital, %
the provision)
on 31.12. 2009,
as per RAS
Kuban Backbone Grid
Transmission,
49.00
134.1
100.7
459.2
Severovostokenergo
distribution of electricity
Generation and sale
of electricity and heat
EnergoTekhKomplekt
Renting out of warehouses
Schekinskie PGU
OGK-1
IT Energy Service
ENIN
UEUK
TGC-7
TGC-11
TGC-6
Bashkirenergo
Construction and technical
upgrading of electric energy
industry facilities
Electricity and heat generation
IT services
R&D
Energy company management
Electricity and heat generation
Electricity and heat generation
Electricity and heat generation
Generation, transmission
and sale of electricity and heat
49.00
49.00
45.21
40.17
39.99
38.24
33.33
32.14
27.45
23.58
21.27
9.8
0.1
0.0
13,164.4
198.4
1.0
0.1
13,262.8
2,463.6
4,304.3
7,143.1
0.0
2.7
0.0
133.0
0.4
0.0
42,504.0
30,071.0
85.3
471.1
0.0
41,817.3
17,091.3
21,741.9
59,693.5
195.9
89.6
164.4
45,967.1
13,834.0
27,596.5
38,788.4
Investments in associated companies
40,681.7
183,508.0
157,299.5
144
Federal Grid Company Annual Report 2009
Finance
145
Federal Grid Company Annual Report 2009
Finance
Debt securities
As on 31.12.2009 and 31.12.2008, promissory notes of the following entities are accounted for within debt securities:
As on 31.12.2009 and 31.12.2008, the short-term promissory notes include the promissory notes of the below companies:
RUB thousand
Issuer
VTB Bank
SO -TsDU UES
MOESK
Otkrytiye Finance
Glavsetservice UNEG
Otkrytiye Financial Corporation
31.12.2009
31.12.2008
Due for repayment Annul rate,%
-
469,300
-
-
-
-
41,460,006
508,899
3,013,006
6,228,604
152,872
5,211,164
09.2010
12.2012
03.2009
09.2010
12.2009
11.2009
discount
7
17
discount, 2
14
01-05.2010
discount
Note
*
**
**
RUB thousand
Issuer
VTB Bank
Glavsetservice UNEG
Bank Alemar
Kaustik
GVC Energetiki
Total
Total
469,300
56,574,551
* reclassification from long-term promissory notes
Notes
*
31.12.2009
31.12.2008
Annul rate,%
43,925,294
150,000
-
55,260
60,000
47,324,927
90,400
1,007,336
-
60,000
44,190,554
48,482,663
discount
14
discount
15
17
*Reclassification in short-term investments
** Novation in interest-free promissory notes, the amounts are recorded within the accounts receivable
Cash Flows
As on 31.12.2009, the Company’s cash amounted to RUB
11,312 mln (as on 31.12.2008 – RUB 5,640 mln).
Actual cash inflow in 2009 amounted to RUB 226,985 mln,
which was by RUB 37,294 mln more than in 2008. Actual
payments decreased by RUB 51,129 mln versus 2008 and
amounted to RUB 195,668 mln.
In 2009, the Company financed the investments primarily by
cash received from operational activities, note repayment
and sales of investments received as a result of RAO UES of
Russia’s restructuring and additional shares placement.
146
Federal Grid Company Annual Report 2009
Finance
147
Federal Grid Company Annual Report 2009
Finance
SHAREHOLDERS
AND
INVESTORS
_ Equity
_ Stock Market
_ Dividend Policy
_ Taxation Matters for Shareholders
_ Investor Calendar 2010
9
SHAREHOLDERS
AND
INVESTORS
the charter capital amounted
9 –1. EQUITY
to Federal Grid Company’s Charter, as
According
on 31.12.2009,
to RUB
576,757,098,181, divided into 1,153,514,196,362 ordinary
registered non-documentary shares with a par value of RUB
0.50 each. There are 193,291,627,469 authorised ordinary
registered shares with a par value of RUB 0.50 each, for a total
par value of RUB 96,645,813,734.50.
Issues and classes (types) of shares:
> Class of shares: Ordinary;
> Type of shares: Registered, non-documentary;
> Par value per share: RUB 0.50;
> Number of shares outstanding (shares that have not been
redeemed or cancelled): 1,153,514,196,362;
> Number of additional shares placed as on 31.12.2009:
80,047,137,190 ordinary registered shares with a par
value of RUB 0.50 each, for a total par value of RUB
40,023,568,595;
> Number of authorised shares: 113,244,490,279 ordinary
registered shares with a par value of RUB 0.50 each, for a
total par value of RUB 56,622,245,139.50;
> Number of shares held by Federal Grid Company as
treasury stock: 0;
> Number of additional shares that may placed as a result of
conversion of outstanding securities convertible into stock,
or as a result of exercise of the Company’s options: 0.
State registration numbers
and state registration dates
of initial and additional equity
placements:
1-01-65018-D of 10.09.2002
1-01-65018-D-001D of 21.03.2006
1-01-65018-D-002D of 23.08.2007
1-01-65097-D-097D of 03.07.2008
1-01-65098-D-098D of 03.07.2008
1-01-65018-D-101D of 25.12.2008*
* The report on the results of the additional
securities placement was registered on
26.01.2010.
An additional placement of Federal Grid Company ordinary
registered non-documentary shares was completed on
25.12.2009:
Information on shareholders holding at least 5% of the Company’s charter
capital (as on 31.12.2009):
Number of
Total par value
ordinary registered
amount, RUB
non-documentary
shares.
Full name: the Russian Federation, represented by the Federal State
Property Management Agency (Rosimuschestvo);
> Registered address: 9 Nikolsky Pereulok, 109012
Moscow
> Stake in the Company’s charter capital: 79.11%
> Stake in the Company’s ordinary stock: 79.11%
Charter capital according
to the Charter
as on 31.12.2009
Number of additionally
placed securities under
state registration number
1-01-65018-D-101D as
1,153,514,196,362
576,757,098,181
on 25.12.2009*
80,047,137,190
40,023,568,595
Total number of outstanding
Federal Grid Company shares constituting at least 5% of its
charter capital and at least 5% of its ordinary stock have been
entered in the Company’s shareholder register as being held
by the following nominees:
1) Depository and Clearing Company:
– Registered address: 13 1st Tverskaya-Yamskaya
Street, 125047 Moscow;
– Percentage of the Company’s ordinary shares
held: 5.75%.
securities as on 31.12.2009
1,233,561,333,552
616,780,666,776
2) Depository and Corporate Technologies:
– Registered address: 17 Ramenki Street, Bldg. 1,
*The report on the results of the additional securities placement was
119607 Moscow;
registered on 26.01.2010.
Shareholder Information
The Russian Federation, represented by the Federal State
Property Management Agency (Rosimuschestvo), holds
79.11% of the Company’s shares, with another 20.89%
of the Company’s equity owned by over 470,000 minority
shareholders:
Shareholder Information %
79.11
20.89
Rosimuschestvo
Minority shareholders (470,000)
– Percentage of the Company’s ordinary shares
held: 5.66%.
Registrar Information
The registrar is an organisation that maintains a register of
holders of an issuer’s registered shares.
> Full name: Central Moscow Depository (CMD);
> Registered address: 34 Bolshaya Pochtovaya Street, Bldg.
8, 105082 Moscow;
> Postal address: 34 Bolshaya Pochtovaya Street, Bldg. 8,
105082 Moscow;
> Phone: (495) 221-13-33 Fax: (495) 221-13-83;
> E-mail: dr@mcd.ru;
> License information:
> License No.: 10-000-1-00255;
> Issued on: 13.09.2002;
> Valid until: Unlimited;
> Licensing authority: Federal Commission for the Securities
Markets of Russia;
> Date the registrar started maintaining the Federal Grid
Company’s register: 27.11.2002.
150
Federal Grid Company Annual Report 2009
Shareholders and Investors
151
Federal Grid Company Annual Report 2009
Shareholders and Investors
9–2. STOCK MARKET
Securities Trading
Since July 2008, Federal Grid Company shares have been
traded on the MICEX and the RTS stock exchanges in Russia.
The listing of its shares coincided with the completion of electric
energy industry reform, which resulted in more than 470,000
shareholders owning Federal Grid Company stock. The shares
started trading simultaneously on the MICEX and the RTS,
where they were included in the V-level quotation lists.
By the end of 2008, a sufficient track record had been built
for the stock to be upgraded to a higher-level quotation list.
However, because of legislation that limits the minimum state
stake at 75% plus one share, Federal Grid Company stock
does not qualify for inclusion in the A-level quotation list on
either exchange. Effective December 2008, the primary-issue
shares (state registration number 1-01-65018-D of 10.09.2002)
have been included in the B-level quotation list on both the
MICEX and the RTS.
Stock Exchanges and Securities Tickers
Exchange
MICEX
RТS
Ticker
FEES
FEES
FEESG
ISIN
code
Quotation
Bloomberg
Thomson
Date trading
list
ticker
Reuters ticker
was allowed
RU000A0JPNN9 B
RU000A0JPNN9 B
FEES RU
FEESS RU
FEESG RU
FEESS.RTS
FEES.RTS
FEESG.RTS
16.07.2008
16.07.2008
The fact that the Company’s shares have been included in
leading international and Russian stock indices is a testament
to the recognition of their impact on the stock market at
large. In the most meaningful development in 2009, Federal
Grid Company stock was included in the MSCI Russia the
MSCI Emerging Markets indices by MSCI Barra, a leading
international agency. This has provided the Company with
access to a wide range of professional investors, whose
respective investment activity restricts operations to highly
reliable securities that are part of the key stock indices.
The Federal Grid Company Stock Weightings in Key Stock Indices:
Index
MSCI Russia
MSCI Emerging Markets
MICEX
РMICEX10
MICEX PWR
MICEX LC
RTSI
RTSeu
Inclusion Date
Federal Grid Company weighting, % (current data)
28.02.2009
28.02.2009
27.04.2009
12.01.2010
27.08.2008
15.07.2009
15.09.2008
15.09.2008
1.43
0.045 – as on inclusion date
1.56
9.54
13.24
1.94
1.72
21.75
250
200
150
100
50
0
–50
250
200
150
100
50
0
–50
250
200
150
100
50
0
–50
In 2009, Federal Grid Company shares placed among the
top-ten most-liquid Russian securities, and were included
in the MICEX10 Index (top-ten most-liquid stocks traded on
MICEX).
Federal Grid Company stock performance compared to the key stock indices, %:
Jan
Feb
Mar
Apr
May
Jun
Jul
Aug
Sep
Oct
Nov
Dec
Federal Grid Company
Micex PWR
MICEX
RTS
Summary of Federal Grid Company’s stock performance on the MICEX in 2009:
Динамика изменения акций Федеральной сетевой компании в сравнении с основными индексами в 2009 году, %
MICEX
Period-end
Volume (shares)
Volume (RUB)
High
Low
1Q09
2Q09
3Q09
4Q09
Total:
0.074
0.149
0.196
0.296
0.154
0.325
0.386
0.409
0.149
0.268
0.352
0.319
82,161,416,200
9,802,130,260.20
141,173,824,900
32,605,155,019.70
112,393,576,700
31,047,527,393.20
117,171,087,800
41,039,565,469.80
0.074
0.409
452,899,905,600
114,494,378,142.90
1,171,618
Number
of trades
171,162
308,969
272,936
418,551
Summary of Federal Grid Company’s stock performance on the RTS in 2009:
ФСК
Micex PWR
ММВБ
РТС
январь
RTS
февраль
март
Low
апрель
High
май
июнь
Period-end
июль
Volume
август
(shares)
сентябрь
Volume
октябрь
(RUB)
ноябрь
Number
декабрь
of trades
1Q09
2Q09
0.0738
0.14917
0.15227
0.30674
0.14201
0.27066
3,466,599,364
1,436,101,845
379,161,118
322,148,592
Динамика изменения акций Федеральной сетевой компании в сравнении с основными индексами в 2009 году, %
0.3515
3Q09
1,802,145,891
470,642,431
0.38336
0.17
4Q09
Total:
0.3
0.0738
0.4008
0.4008
0.3195
1,344,759,452
470,301,466
586
326
384
342
8,049,606,552
1,642,253,606
1,638
ФСК
Micex PWR
ММВБ
РТС
152
Federal Grid Company Annual Report 2009
Shareholders and Investors
январь
февраль
153
март
апрель
Federal Grid Company Annual Report 2009
май
июнь
июль
август
сентябрь
октябрь
Shareholders and Investors
декабрь
ноябрь
Federal Grid Company Stock Prices in 2009
The weighted average price per Federal Grid Company
share on the MICEX rose by 159% in 2009, to RUB 0.319 as
on 31.12.2009.
The Impact of Company and Market Newsflow on Federal
Grid Company Stock Prices in 2009
The developments that influenced the Company’s share price
included the following:
> Inclusion of Federal Grid Company shares in the MSCI
Russia and the MSCI Emerging Markets in February;
> Disclosure of the Company’s financials for 2008 in early
April and for 1Q09 in mid-May;
> A decision by the Russian government to implement RAB
reguation at power-grid companies, effective as of 2010,
and the passing by the State Duma of the energy-efficiency
legislation in November;
> Approval by the Federal Tariff Service of Russia of rates of
return for the Federal Grid Company to calculate electricity
transmission fees;
> Approval of rates and the initial invested capital for the
Federal Grid Company.
The chart below presents the Federal Grid Company stock
price performance (rhs) and trading volume (lhs) on the MICEX
in 2009. The chart also shows the key events that impacted the
stock price the most. The table below the chart explains those
events, referenced by the number, in more detail.
Federal Grid Company stock price performance and trading volume on the MICEX:
Share price, RUB
Trade volume, mln
2
1
3
4
5
8
7
9
6
12 000
10 000
8000
6000
4000
2000
0
Jan
Feb
Mar
Apr
May
Jun
Jul
Aug
Sep
Oct
Nov
Dec
Date
Price change
Notes
12.02.09
12.04%
Динамика цены акций и объемы торгов Федеральной сетевой компании на ММВБ
Report of Federal Grid Company stock inclusion in the MSCI Barra
27.02.09
10.74%
One day before inclusion in the MSCI
Стоимость акции, руб.
15.04.09
13.14%
16.04.09
13.13%
Early July
2
A decline by 25.5%
3
in the space of 8 days
28.08.09
1
15.22%
Report of a CAPEX programme cut, and disclosure of a forecast
of RAB parameters and 2009–2011 financials
4
5
8
Press reports on electricity rates for 2010 and a possible cut to Federal Grid Company’s investment programme,
with subsequent approval of tariff rate hike caps by the government
6
The day after initial reports appeared of the government’s intention to imminently transfer power-grid companies
9
7
Объем торгов, млн шт.
12 000
10 000
September – October
A number of reports corroborating an imminent transition of Federal Grid Company to RAB regulation
to RAB regulation
11.11.09
январь
07.12.09
The State Duma passes the energy efficiency legislation requiring the Federal Grid Company
февраль
март
A decline by 11.2%
апрель
май
июнь
июль
август
сентябрь
октябрь
ноябрь
декабрь
The Federal Tariff Service approves a RAB-based return for Federal Grid Company –
to adopt RAB regulation effective 2010
8000
6000
4000
2000
0
At RUB 0.395, the consensus target price set by analysts at
15 major investment banks has been 24% above the weighed
average price of RUB 0.319 per Federal Grid Company share.
Experts are thus expecting Federal Grid Company stock to
continue rising, albeit at a slower pace than in 2009.
Federal Grid Company’ Global Depository Receipt programme
devised following the reorganisation of Federal Grid Company
and RAO UES of Russia and comprising depository receipts
conferring rights to underlying ordinary shares that were not
listed in accordance with the Regulation S or Rule 144А, was
launched on 30.06. 2008.
Global Depository Receipts (GDR)
On 24.06.2008, the FFMS authorised Federal Grid Company
to place and cause circulation outside of Russia of emission
securities based on all currently registered issues of its
ordinary shares in an amount not exceeding 287,269,492,431
ordinary shares.
As on 31.12.2009, the total amount of Federal Grid Company’
GDR programme was equivalent to 0.2% of the Company’s
charter capital.
GDR Programme Highlights
Ratio
International code
Depository bank
Programme launch date
Market price as on 31.12.2009
Amount of GDRs as on 31.12.2009
Regulation S
1 GDR : 500 shares
ISIN: US3133542015
Rule 144A
1 GDR : 500 shares
ISIN: US3133541025
Common Code: 036273577
Common Code: 0362733372
Deutsche Bank
30.06.2008
USD 5.30
4,001,007
Deutsche Bank
30.06.2008
USD 5.30
689,852
9–3. DIVIDEND POLICY
Federal Grid Company’s dividend policy is based on its Dividend
Policy Regulations that were developed in compliance with
existing Russian law and approved by the Board of Directors
on 15.02.2008. The Board would recommend dividends based
on financial performance while maintaining a balance between
the Company’s development needs and shareholders’ financial
interests.
A general shareholders meeting would determine the amount
of dividends to be paid on ordinary shares based on the
Board’s recommendation, but in no event may it approve a
payout above this recommendation.
In order to maintain the Company’s financial stability amid
a financial crisis, the Board of Directors recommended the
general shareholders meeting allocate 2008 net profit to
development. A general meeting resolution of 30.06.2009
approved the allocation of RUB 4,242,201,000 (95% of 2008
net profit) to development, and RUB 223,201,000 (5% of 2008
in the space of 3 days
11% for new invested capital, and 3.9% for initial invested capital in 2010, 5.2% in 2011, and 6.5% in 2012
22.12.09
A decline by 10.5%
Tariff decisions and initial invested capital for Federal Grid Company are announced
in the space of 3 days
Динамика цены акций и объемы торгов Федеральной сетевой компании на ММВБ
Federal Grid Company Annual Report 2009
154
Shareholders and Investors
155
Federal Grid Company Annual Report 2009
Shareholders and Investors
Стоимость акции, руб.
Объем торгов, млн шт.
2
1
3
4
5
8
7
9
6
12 000
10 000
8000
6000
4000
2000
0
январь
февраль
март
апрель
май
июнь
июль
август
сентябрь
октябрь
ноябрь
декабрь
0.42
0.35
0.28
0.21
0.14
0.07
0
1
2
0,42
3
0,35
0,28
4
0,21
5
0,14
6
0,07
7
0
8
9
0,42
0,35
0,28
0,21
0,14
0,07
0
net profit) to the Company’s reserve fund. The money allocated
to development was used to finance specific projects to the
extent determined by a separate Board resolution as part of
the Company’s priority activities:
Total dividend accruals
Per ordinary share
Unit
RUB ‘000
RUB
2006
587,847.4
2007
380,000
0.001626664
0.0007977370096
2008
0
0
The reserve fund and dividends are to be accrued from after-
tax (net) profit recognised in financial statements. Federal
Grid Company incurred a RUB 59,866 mln loss in 2009. No
dividends will therefore be paid for that year.
9–4. TAXATION MATTERS FOR SHAREHOLDERS
The taxation of income from the Company’s emission
securities that have been or are in the process of being issued
is regulated by the Tax Code of the Russian Federation, as
well as other regulations passed in compliance with the Tax
Code.
Tax rates:
Type of income
Legal entities
Individuals
Dividends
Bond coupons
Income from sale of securities
Resident
9%, 0%*
20%
20%
Non-resident
Resident
Non-resident
15%
20%
20%
9%
13%
13%
15%
30%
30%
* In accordance with paragraph 3, Article 284 of the Russian Federation Tax Code, the 0% tax rate shall be applied to dividend income received by Russian
organisations provided that at the date the dividend payment decision is made, the organisation receiving the dividends had continuously owned, over a
period of not less than 365 days, at least a 50% contribution (stake) in the charter (equity) capital (fund) of the organisation paying the dividend, or depository
receipts conferring the right to receive dividends equivalent to at least 50% of total dividends paid by the organisation, provided further that the cost of
acquisition of the contribution (stake) in the charter (equity) capital (fund) of the organisation paying the dividend, or depository receipts conferring the right to
receive the dividends, exceeds RUB 500 mln; otherwise, the 9% rate shall be applied.
9–5. INVESTOR CALENDAR 2010
Dates
December 24
November 15
November 2
October 2
August 14
July 30
July 3
June 29
May 15
May 5
April 15
April 3
February 15
February 3–5
February 4
January 27–28
January 12
Events
Presentation of preliminary 2010 results
Publication of the 3Q10 quarterly report
Publication of 9M10 RAS financial statements
Publication of a list of affiliates for 3Q10
Publication of 1H10 RAS financial statements
Publication of the 2Q10 quarterly report
Publication of audited 2009 IFRS financial statements
Publication of a list of affiliates for 2Q10
Annual General Shareholders Meeting
Publication of the 1Q10 quarterly report
Publication of 1Q10 RAS financial statements
Publication of audited 2009 RAS financial statements
Publication of a list of affiliates for 1Q10
Publication of the 4Q09 quarterly report
Participation in Troika Dialog’s Russia 2010 investment forum
Publication of interim 1H2009 IFRS financial statements
Participation in Deutsche Bank’s Russia One-on-One investment conference in London
Publication of a list of affiliates for 4Q09
156
Federal Grid Company Annual Report 2009
Shareholders and Investors
157
Federal Grid Company Annual Report 2009
Shareholders and Investors
10–1. SUBSIDIARIES
Branches and subsidiaries of Federal Grid Company as of 31.12.2009
Full name
Federal Grid Company
share of the charter capital
Ordinary shares owned
by Federal Grid Company
Branches and subsidiaries in which Federal Grid Company has a 100% share of the charter capital
Energy Forecasting Agency (APBE)
Volgaenergosnabkomplekt
Glavsetservice UNEG
Index of Energy-FGC UES
Mobile GTES
MUS Energetika
S&T Elektroenergetika
UC Energetika
CIUS EES
NPKenergo
Chitatekhenergo
Elektrosetservice UNEG
Energostroisnabkomplekt UES
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
Subsidiaries in which Federal Grid Company has a 75-99% share of the charter capital
Centre of Energy
Nurenergo
98.56%
77.00%
Subsidiaries in which Federal Grid Company has a 50-74% share of the charter capital
Tomsk MES
GVC Energetiki
SMUEK
GruzRosenergo IPS
52.025%
50.00% plus 1 share
50.00%
50.00%
Dependent companies in which Federal Grid Company has less than a 50% share of the charter capital
Kuban MES
Severovostokenergo
EnergoTekhKomplekt
Schekinskie PGU
OGK-1
IT Energy Service
ENIN
UEUK
TGK-7 (Volzhskaya)
TGK-11
TGK-6
Bashkirenergo
49.00%
49.00%
48.99%
45.21%
40.17%
39.99%
38.24%
33.33%
32.14%
27.45%
23.58%
21.27%
100.00%
100.00%
100.00%
-
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
98.56%
77.00%
59.881%
50.00% plus 1 share
50.00%
50.00%
49.00%
49.00%
65.34%
45.21%
40.17%
-
38.24%
33.33%
32.14%
27.45%
23.58%
22.29%
159
Federal Grid Company Annual Report 2009
Attachments
ATTACHMENTS
_ Subsidiaries
_ Transactions
_ Audit Commission Conclusion
on the Veracity of Information
in the Annual Report
_ Branches
10
10–2. TRANSACTIONS
Information on Federal Grid Company
Transactions in 2009
Below is a list of the transactions completed by Federal Grid Company,
acknowledged as interested party transactions, and approved by the
Federal Grid Company Board of Directors in 2009:
1. Supplementary agreement No. 2 to the contract for
building services between Federal Grid Company and CIUS
EES of 01.04.2008 No. Ts/01. Value of the supplementary
agreement: RUB 1,041,500,000 (one billion forty-one million
five hundred thousand), plus 18% VAT to the sum of RUB
187,470,000 (one hundred and eighty-seven million four
hundred and seventy thousand) (Minutes of the Meeting No.
76 of 3.03.2009).
2. Supplementary agreement No. 3 to the contract for
building services between Federal Grid Company and CIUS
EES of 01.04.2008 No. Ts/01. Value of the supplementary
agreement: the price of the services in the first quarter of
2009 will be RUB 544,320,000 (five hundred and forty-four
million three hundred and twenty thousand), plus 18% VAT
to the sum of RUB 97,977,600 (ninety-seven million nine
hundred and seventy-seven thousand six hundred) (Minutes
of the Meeting No. 76 of 3.03.2009).
3. Property
lease agreement between Federal Grid
Company and CIUS EES. The rent consists of: a fixed part,
which the sides agreed will not exceed RUB 10,100,780 (ten
million one hundred thousand seven hundred and eighty)
and ninety-two kopecks for 360 days, in accordance with
annexes No. 1-8 to the present agreement; plus VAT as
stipulated by the Russian legislation (Minutes of the Meeting
No. 76 of 3.03.2009).
4. Equipment rental agreement (with a buyout clause)
between Federal Grid Company and MRSK Holding. The value
of the contract is as follows: RUB 888,522 (eight hundred and
eighty-eight thousand five hundred and twenty-two) and 33
kopecks per month, plus 18% VAT to the sum of RUB 159,934
(one hundred and fifty-nine thousand nine hundred and thirty-
four) and 2 kopecks, inclusive of the payment for the lease of
items listed in Annex 2 of the contract, which constitutes RUB
226,353 (two hundred and twenty-six thousand three hundred
and fifty-three) and 77 kopecks per month, plus 18 % VAT to
the sum of RUB 40,743 (forty thousand seven hundred and
forty-three) and 68 kopecks. In case of early return of the
items listed in Annex 2, in accordance with Paragraph 5.3
of this contract, the price will be reduced to RUB 662,168
(six hundred and sixty-two thousand one hundred and sixty-
eight) and 55 kopecks per month, plus 18% VAT to the sum
of RUB 119,190 (one hundred and nineteen thousand one
hundred and ninety) and 34 kopecks (Minutes of the Meeting
No. 76 of 3.03.2009).
5. Trust management agreement between Federal Grid
Company and Inter RAO UES. The size of compensation paid
to the trust manager is RUB 3,000 per quarter (Minutes of the
Meeting No. 76 of 3.03.2009).
6. Contract for repair and maintenance of grid facilities
between Federal Grid Company and MRSK Volga. The value
of the contract is RUB 10,660,030 (ten million six hundred
and sixty thousand and thirty), inclusive of VAT (Minutes of the
Meeting No. 81 of 28.05.2009).
7. Contract for repair and maintenance of grid facilities
between Federal Grid Company and MRSK Volga. The value
of the contract is RUB 73,358,640 (seventy-three million three
hundred and fifty-eight thousand six hundred and forty), inclusive
of VAT (Minutes of the Meeting No. 81 of 28.05.2009).
12. Additional agreements to purchase of licenses for SAP
software and software support services to a contract between
Federal Grid Company and MRSK North-West (Minutes of the
Meeting No. 81 of 28.05.2009).
8. Supplementary agreement No. 6 to Agent Agreement
No. 2 of 12.10.2006 between Federal Grid Company
(Customer) and MRSK North-West (Contractor). The size
of compensation paid to the Contractor is set at 2% of the
volume of utilised capital investment, plus VAT at the rate set
forth in Russian legislation, paid out from the agreed sum of
funding (Minutes of the Meeting No. 81 of 28.05.2009).
9. Contract for service and maintenance of overhead
transmission lines and substations operated by PMES
Caspian, signed between Federal Grid Company and
MRSK North Caucasus. The value of the contract is set at
RUB 16,492,973 (sixteen million four hundred and ninety-
two thousand nine hundred and seventy-three) and 28
kopecks, inclusive of VAT (Minutes of the Meeting No. 81
of 28.05.2009).
10. Contract for ongoing repairs of overhead transmission
lines and substations operated by the PMES Caspian, signed
between Federal Grid Company and MRSK North Caucasus.
The value of the contract is set at RUB 20,641,850 (twenty
million six hundred and forty-one thousand eight hundred
and fifty) and 92 kopecks, inclusive of VAT (Minutes of the
Meeting No. 81 of 28.05.2009).
13. Additional agreements to purchase of licenses for
SAP software and software support services to a contract
between Federal Grid Company and MRSK Urals (Minutes of
the Meeting No. 81 of 28.05.2009).
14. Sublicensing agreement to purchase of licenses for
mySAP Business Suite software and support services
between Federal Grid Company and MRSK North-West. The
value of the contract is set at RUB 13,495,779 (thirteen million
four hundred and ninety-five thousand seven hundred and
seventy-nine) and 69 kopecks, including 18% VAT to the sum
of RUB 2,058,678 (two million fifty-eight thousand six hundred
and seventy-eight) and 26 kopecks. (Minutes of the Meeting
No. 81 of 28.05.2009).
15. Sublicensing agreement to purchase licenses for mySAP
Business Suite software and support services between Federal
Grid Company and MRSK South. The value of the contract is
set at RUB 40,477,815 (forty million four hundred and seventy-
seven thousand eight hundred and fifteen), including 18% VAT
to the sum of RUB 6,174,581 (six million one hundred and
seventy-four thousand five hundred and eighty-one) and 95
kopecks. (Minutes of the Meeting No. 81 of 28.05.2009).
11. Supplementary agreement to purchase of licenses for
SAP software and software support services to a contract
between Federal Grid Company and MRSK North Caucasus
(Minutes of the Meeting No. 81 of 28.05.2009).
16. Additional agreements to purchase of licenses for SAP
software and software support services to a contract between
Federal Grid Company and MOESK (Minutes of the Meeting
No. 81 of 28.05.2009).
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17. Sublicensing agreement to purchase of licenses for
mySAP Business Suite software and support services
between Federal Grid Company and Lenenergo. The
value of the contract is set at RUB 26,988,384 (twenty-
six million nine hundred and eighty-eight thousand three
hundred and eighty-four) and 69 kopecks, including
18% VAT to the sum of RUB 4,116,872 (four million
one hundred and sixteen thousand eight hundred and
seventy-two) and 24 kopecks. (Minutes of the Meeting
No. 81 of 28.05.2009).
18. Sublicensing agreement to purchase of licenses for SAP
for Utilities software between Federal Grid Company and
Lenenergo. The value of the contract is set at RUB 50,207,321
(fifty million two hundred and seven thousand three hundred
and twenty-one) and 73 kopecks, including 18% VAT to the
sum of RUB 7,658,744 (seven million six hundred and fifty-
eight thousand seven hundred and forty-four). (Minutes of
the Meeting No. 81 of 28.05.2009).
19. Sublicensing agreement to purchase of licenses for
SAP for Utilities software between Federal Grid Company
and MRSK North Caucasus. The value of the contract is set
at RUB 6,891,034 (six million eight hundred and ninety-one
thousand and thirty-four) and 15 kopecks, including 18% VAT
to the sum of RUB 1,051,174 (one million fifty-one thousand
one hundred and seventy-four) and 70 kopecks. (Minutes of
the Meeting No. 81 of 28.05.2009).
20. Sublicensing agreement to purchase of licenses for SAP
for Utilities software between Federal Grid Company and
MRSK North-West. The value of the contract is set at RUB
10,504,727 (ten million five hundred and four thousand seven
hundred and twenty-seven) and 21 kopecks, including 18%
VAT to the sum of RUB 1,602,416 (one million six hundred
and two thousand four hundred and sixteen). (Minutes of the
Meeting No. 81 of 28.05.2009).
47,200 (forty-seven thousand, two hundred), inclusive of VAT
(Minutes of the Meeting No. 81 of 28.05.2009).
21. Sublicensing agreement to purchase of licenses for SAP
for Utilities software between Federal Grid Company and
MRSK Urals. The value of the contract is set at RUB 49,747,418
(forty-nine million seven hundred and forty-seven thousand
four hundred and eighteen) and 60 kopecks, including 18%
VAT to the sum of RUB 7,588,589 (seven million five hundred
and eighty-eight thousand five hundred and eighty-nine) and
29 kopecks. (Minutes of the Meeting No. 81 of 28.05.2009).
22. Sublicensing agreement to purchase of licenses for SAP
for Utilities software between Federal Grid Company and MRSK
Centre. The value of the contract is set at RUB 42,217,335
(forty-two million two hundred and seventeen thousand three
hundred and thirty-five) and 68 kopecks, including 18% VAT to
the sum of RUB 6,439,932 (six million four hundred and thirty-
nine thousand nine hundred and thirty-two) and 56 kopecks.
(Minutes of the Meeting No. 81 of 28.05.2009).
23. Sublicensing agreement to purchase of licenses for
SAP for Utilities software between Federal Grid Company
and MOESK. The value of the contract is set at RUB
141,069,882 (one hundred and forty-one million sixty-nine
thousand eight hundred and eighty-two), including 18%
VAT to the sum of RUB 21,519,134 (twenty-one million five
hundred and nineteen thousand one hundred and thirty-
four) and 55 kopecks. (Minutes of the Meeting No. 81 of
28.05.2009).
24. Preliminary agreement for the lease of optical fibre
between Federal Grid Company and MRSK North-West. The
rent is calculated on the basis of the tariff per one pair of
fibres per 1 km for the term of 25 years, which is set at RUB
25. Contract for training services between Federal Grid
Company and MRSK Urals. The value of the contract is set
at RUB 521,876 (five hundred and twenty-one thousand
eight hundred and seventy-six) and 80 kopecks, including
18% VAT to the sum of RUB 79,608 (seventy-nine thousand
six hundred and eight) and 32 kopecks for the training of 38
people. (Minutes of the Meeting No. 81 of 28.05.2009).
26. Contract for the lease of earthen dykes under the 500
kV overhead transmission lines of the Vyatka-Votkinskaya
hydro-electric power plant between Federal Grid Company
and RusHydro. The monthly rent is set at RUB 5,978 (five
thousand nine hundred and seventy-eight) and 41 kopecks,
including 18% VAT to the sum of 911 (nine hundred and
eleven) and 96 kopecks. The total value of the lease contract
is RUB 65,762 (sixty-five thousand seven hundred and sixty-
two) roubles and 51 kopecks, including 18% VAT to the sum
of 10,031 (ten thousand and thirty-one) and 57 kopecks
(Minutes of the Meeting No. 81 of 28.05.2009).
27. Agent services contract for the Buguchanskaya hydro-
electric plant’s power output facilities between Federal Grid
Company and CIUS EES. The value of the contract is set at
RUB 181,580,000 (one hundred and eighty-one million five
hundred and eighty thousand) roubles, including 27,698,644
(twenty-seven million six hundred and ninety-eight thousand
six hundred and forty-four) and 7 kopecks of VAT (Minutes of
the Meeting No. 81 of 28.05.2009).
28. Agent contract for design and engineering survey
services between Federal Grid Company and Inter RAO UES.
The value of the contract is set at 2 (two) per cent of the
utilised capital investment funding, plus VAT. (Minutes of the
Meeting No. 81 of 28.05.2009).
29. Contract of purchase between Federal Grid Company
and CIUS EES. The value of the purchase contract is set
at no more than RUB 25,440,690 (twenty-five million four
hundred and forty thousand six hundred and ninety), plus
18% VAT to the sum of RUB 4,579,324 (four million five
hundred and seventy-nine thousand three hundred and
twenty-four) and 20 kopecks. (Minutes of the Meeting No.
81 of 28.05.2009).
30. Contract for training services between Federal Grid
Company and MRSK Urals. The value of the contract is set
at RUB 2,517,188 (two million five hundred and seventeen
thousand one hundred and eighty-eight) and 27 kopecks,
including 18% VAT to the sum of RUB 383,977 (three hundred
and eighty-three thousand nine hundred and seventy-seven)
and 87 kopecks for the training of 170 people. (Minutes of the
Meeting No. 81 of 28.05.2009).
31. Contract for the repair and maintenance of grid facilities
between Federal Grid Company and MRSK Volga. The value
of the contract is RUB 13,014,447 (thirteen million fourteen
thousand four hundred and forty-seven) and 74 kopecks,
including 18% VAT to the sum of RUB 1,985,254 (one million
nine hundred and eighty-five thousand two hundred and
fifty-four) and 74 kopecks (Minutes of the Meeting No. 81 of
28.05.2009).
32. Property lease contract between Federal Grid Company
and Index of Energy-FGC UES. The value of the contract
is set at RUB 51,137 (fifty-one thousand one hundred and
thirty-seven) and 90 kopecks per month, plus VAT to the sum
of RUB 9,204 (nine thousand two hundred and four) and 82
kopecks (Minutes of the Meeting No. 81 of 28.05.2009).
33. Contract for the lease of part of the earthen dykes
No. 1 and No. 2 under the VGES-Izhevsk 220 kV overhead
transmission line pylons between Federal Grid Company
and RusHydro. The monthly rent is set at RUB 1,705 (one
thousand seven hundred and five) and 83 kopecks, including
18% VAT to the sum of RUB 260 (two hundred and sixty) and
21 kopecks. The total value of the contract is RUB 18,764
(eighteen thousand seven hundred and sixty-four) and 13
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kopecks, including 18% VAT to the sum of RUB 2,862 (two
thousand eight hundred and sixty-two) and 33 kopecks
(Minutes of the Meeting No. 81 of 28.05.2009).
Urals. The value of the contract is RUB 272,299 (two hundred
and seventy-two thousand two hundred and ninety-nine) and
68 kopecks, including 18% VAT (Minutes of the Meeting No.
87 of 24.08.2009).
34. Sublicensing agreement for the SAP for Utilities software
between Federal Grid Company and MRSK Volga. The value
of the contract is RUB 53,703,228 (fifty-three million seven
hundred and three thousand two hundred and twenty-eight) and
82 kopecks (Minutes of the Meeting No. 82 of 26.06.2009).
35. Additional agreements to purchase of licenses for
SAP software and software support services to a contract
between Federal Grid Company and MRSK Volga (Minutes
of the Meeting No. 81 of 28.05.2009).
39. Contract for technical service and maintenance of high
oil pressure 220 kV cable lines AT-5 No. 1, 2 and AT-6 No. 1,2
at the Chagino substation between Federal Grid Company
and MOESK. The value of the contract is RUB 405,118 (four
hundred and five thousand one hundred and eighteen)
and 64 kopecks, plus 18% VAT to the sum of RUB 72,921
(seventy-two thousand nine hundred and twenty-one) and 36
kopecks (Minutes of the Meeting No. 87 of 24.08.2009).
36. Sublicensing agreement for mySAP Business Suite
software and support services between Federal Grid
Company and MOESK. The value of the contract is set at
RUB 46,827,265 (forty-six million eight hundred and twenty-
seven thousand two hundred and sixty-five) and 81 kopecks.
(Minutes of the Meeting No. 82 of 26.06.2009).
40. Contract for service and maintenance of electric and
technical equipment of the 500 kV Ochakovo substation,
which is owned by MOESK, between Federal Grid Company
and MOESK. The value of the contract is RUB 33,481,956
(thirty-three million four hundred and eighty-one thousand
nine hundred and fifty-six) and 62 kopecks (Minutes of the
Meeting No. 87 of 24.08.2009).
37. Supplementary agreement No. 4 to the contract for
building services between Federal Grid Company and CIUS
EES of 01.04.2008 No. Ts/01. The value of the supplementary
agreement: RUB 1,435,680,000 (one billion four hundred and
thirty-five million six hundred and eighty thousand), plus 18%
VAT to the sum of RUB 258,422,400 (two hundred and fifty-
eight million four hundred and twenty-two million four hundred
thousand) (Minutes of the Meeting No. 83 of 29.06.2009).
38. Contract for operational service and maintenance
of electric equipment of the Kauchuk 220 kV overhead
transmission line between Federal Grid Company and MRSK
41. Property
lease agreement between Federal Grid
Company and RusHydro. The monthly rent is set at RUB
6,000,868 (six million eight hundred and sixty-eight) and 32
kopecks, including 18% VAT to the sum of RUB 915,386 (nine
hundred and fifteen thousand three hundred and eighty-six)
and 69 kopecks. The value of the rent for the period from
22.08.2009 to 1.04.2010 is RUB 43,941,842 (forty-three
million nine hundred and forty-one thousand eight hundred
and forty-two) and 22 kopecks, including 18% VAT to the sum
of 6,702,992 (six million seven hundred and two thousand nine
hundred and ninety-two) roubles and 88 kopecks (Minutes of
the Meeting No. 90 of 01.10.2009).
42. Supplementary agreement for the property lease contract
between Federal Grid Company and TGC-6. The monthly
rent is set at 37,071 (thirty-seven thousand and seventy-one)
roubles and 91 kopecks, including 18% VAT to the sum of
5,655 (five thousand six hundred and fifty-five) roubles and 4
kopecks (Minutes of the Meeting No. 90 of 01.10.2009).
43. Property lease agreement between Federal Grid Company
and TGC-6. The rent for 11 (eleven) months is set at RUB
107,564 (one hundred and seven thousand five hundred and
sixty-four) and 60 kopecks, including 18% VAT to the sum of
RUB 16,408 (sixteen thousand four hundred and eight) and 15
kopecks (Minutes of the Meeting No. 90 of 01.10.2009).
44. Agreement signed between Federal Grid Company
and SO UES, with the purpose of the latter company’s debt
restructuring. The value of the agreement is 2,635,681,034
(two billion six hundred and thirty-five million six hundred and
eighty-one thousand and thirty-four) roubles and 4 kopecks
(Minutes of the Meeting No. 90 of 01.10.2009).
45. Agreement for the purchase of additional shares.
The total value of the additional shares in Federal Grid
Company transferred to the Russian Federation’s ownership
under the agreement is calculated by multiplying the total
number of shares being transferred under the agreement
(14,454,313,725 shares) by the value of one additional share,
which is set at 51 (fifty-one) kopecks per share, equalling RUB
7,371,699,999 (seven billion three hundred and seventy-one
million six hundred and ninety-nine thousand nine hundred
and ninety-nine) and 75 kopecks (Minutes of the Meeting No.
94 of 16.12.2009).
46. Agreement for the transfer of shares in the Company
to the Russian Federation in return for investment from the
national budget. The total value of the additional shares in
Federal Grid Company transferred to the Russian Federation’s
ownership in return for investment from the national budget
is calculated by multiplying the total number of shares being
transferred under the agreement (980,392,156 shares) by
the value of one additional share, which is set at 51 (fifty-
one) kopecks per share, equalling RUB 499,999,999 (four
hundred and ninety-nine million nine hundred and ninety-nine
thousand nine hundred and ninety-nine) and 56 kopecks
(Minutes of the Meeting No. 94 of 16.12.2009).
47. Agreement for special evaluator services between
Federal Grid Company and Inter RAO UES. The value of the
contract is RUB 50,000 (fifty thousand), including 18% VAT
to the sum of RUB 7,627 and 12 kopecks (Minutes of the
Meeting No. 94 of 16.12.2009).
48. Agreement for services in the area of protection of state
secret between Federal Grid Company and CIUS EES. The
value of the contract is RUB 285,000 (two hundred and
eighty-five thousand) per quarter, including 18% VAT to the
sum of RUB 43,474 and 58 kopecks (Minutes of the Meeting
No. 94 of 16.12.2009).
49. Agreement for the lease of non-residential properties
between Federal Grid Company and CIUS EES. The value
of the contract consists of: fixed rent set at RUB 1,464 (one
thousand four hundred and sixty-four) and 40 kopecks per
square meter per month, including the VAT rate at the time
of the delivery of service and in accordance with Chapter 21
on VAT of the Russian Tax Code, plus utility and maintenance
bills. (Minutes of the Meeting No. 94 of 16.12.2009).
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10–3. AUDIT COMMISSION CONCLUSION ON THE VERACITY OF
INFORMATION IN THE ANNUAL REPORT
50. Agreement for the provision of a standardised set of
information services titled Regular Supply of Forecasts for
Electricity Consumption in Russia’s Regions for the mid-
term (seven years) and long-term (15 years) period, signed
between Federal Grid Company and APBE. The value of the
contract is RUB 57,820,000 (fifty-seven million eight hundred
and twenty thousand) (Minutes of the Meeting No. 94 of
16.12.2009).
51. Agreement for the provision of a set of services titled
Comprehensive Analysis of the Existing Conditions in the
Sector and Development of Proposals on Improving Efficiency
at the Current Energy Facilities, Tariff and Balance Solutions
for 2010–2012, and Methods of Node-based Forecasts of
Electricity Consumption in Russia’s Regions, signed between
Federal Grid Company and APBE. The value of the contract
is RUB 90,860,000 (ninety million eight hundred and sixty
thousand) (Minutes of the Meeting No. 94 of 16.12.2009).
52. Agreement for the provision of services in developing
proposals on modifications to the General Blueprint of
Electricity Facilities Placement in Russia until 2020, with a
View Towards 2030 (Modification of the General Blueprint),
signed between Federal Grid Company, SO UES and APBE .
The value of the contract, in accordance with the Calculations
of the Contract Value and the Protocol of Reconciliation of the
Contract Value, was set as RUB 103,840,000 (one hundred
and three million eight hundred and forty thousand) roubles,
including 18% VAT to the sum of 15,840,000 (fifteen million
eight hundred and forty thousand) (Minutes of the Meeting
No. 94 of 16.12.2009).
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10–4. BRANCHES
Federal Grid Company branches
MES Centre
1 Tkatskaya Street, Moscow, 105318
MES North-West1 Kurchatov Street, St Petersburg, 194223
MES Volga
226 Molodogvardeiskaya Street, Samara, 443100
MES South
2 Darnitsky Lane, Inozemtsevo Settlement, Zheleznovogsk, 357400
MES Urals
6 Tolmacheva Street, Yekaterinburg, 620219
MES Siberia
117 Ada Lebedeva Street, Krasnoyarsk, 660099
MES East
47 Dzerjinskogo Street, Khabarovsk, 680000
Nizhegorodskoe PMES
29 Shlisselburg Street, Nizhny Novgorod, 603600
Chernozemnoe PMES
1 Garazhnaya Street, Kursk, 305026
Volga-Okskoe PMES
31 Egergetikov Street, Energetikov Settlement, Vladimir, 600902
Volga-Don PMES
221a Lenin Prospect, Volgograd, 400006
Vologdskoe PMES
18 Planernaya Street, Vologda, 160023
Priokskoe PMES
101A Timiryazev Street, Tula, 300012
Moscow PMES
Beliy Rast, Dmitrovsky District, Moscow Region, 141870, PS 750 kV
Upper Don PMES
Komsomolets Settlement, Tambov District, Tambov Region, 392543
Valdaiskoe PMES
55 Kalinina Street, Tver, 170001
Amurskoe PMES
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
14.
15.
16.
17.
18.
19.
20.
41.
42.
43.
44.
Tomsk PMES
1 Energeticheskaya Street, Tomsk, 634062
Kaspiiskoe PMES
73a Dakhadaev Street, Makhachkala, Republic of Dagestan, 367012
Auto-transport PMES of Urals
5 Tolmachev Street, Yekaterinburg, 620041
Auto-transport PMES of North-West
1 Kurchatov Street, St Petersburg, 194223
21.
22.
23.
24.
25.
26.
27.
28.
29.
30.
31.
32.
33.
34.
35.
36.
37.
38.
Zabaikalskoe PMES
35B Botanicheskaya Street, Ulan-Ude, Republic of Buryatia, 670045
Kuzbasskoe PMES
25a Kirchanova Street, Kemerovo, 650004
Omskoe PMES
4 Prospect Gubkina, Omsk, 644035
West Siberia PMES
17 Prospect Kalilina, Barnaul, 656002
Khakassia PMES
39 Industrialnaya Street, Sayanogorsk, Republic of Khakassia, 662793
Sverdlovskskoe PMES
3 Pereulok Malakhitovy, Yekaterinburg, Sverlovsk Region, 620085
South Urals PMES
2 Zapadny Proezd Street, Chelyabinsk, 454008
Permskoe PMES
34 Visherskaya Street, Perm, Perm Region, 614058
Mid-Volga PMES
2 Stankostroiteley Street, Ulyanovsk, Zasviyazhsky District, 432945
Lower Volga PMES
40 Sokolovaya Gora Street, Saratov, 410038
Stavropolskoe PMES
Food Industry Estate, Zeleznovodsk, Stavropol Territory, 357400
Kuban PMES
5 Tramvainaya Street, Krasnodar, 350021
Rostovskoe PMES
54/1 Dnepropetrovskaya Street, Rostov-on-Don, Pervomayskiy
District, 344093
Bryanskoe PMES
Vygonichi Settlement, Bryansk Region, 243360
Vyborgskoe PMES
Perovo Settlement, Vyborg District, Leningrad Region, 188932
Novgorodskoe PMES
10 Velikaya Street, Veliky Novgorod, 173001
Karelskoe PMES
11 Veterinarny Lane, Petrozavodsk, Republic of Karelia, 185013
Bely Rast Specialised Production Base PMES
101 Shatkovskogo Street, Svododny, Amur Region, 676400
PS 750 Bely Rast, Belyi Rast, Dmitrovsky District, Moscow Region,
Khabarovskoe PMES
141870
3 Tselinnaya Street, Khabarovsk, Khabarovsk Territory, 680032
39.
West Siberia PMES
Primorskoe PMES
3 Mordovtsev Street, Vladivostok, Primorsk Territory, 690000
Krasnoyarskoe PMES
3A Vesny Street, Krasnoyarsk, 660135
4 Geologicheskaya Street, Surgut, Khanty-Mansiisk autonomous
region, Tyumen Region, 628405
40.
Leningradskoe PMES
1 Kurchatov Street, St Petersburg 194223
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GLOSSARY
11
Company Names and Branches
MES
PMES
Abbreviations
ACPS
ACS
ADCMS
AEFC
ARMMS
AS
ASC
ASEFT
ASTC
ASTPM
AT
AWP
BPS
BtB
CB
CCS
CIMS
CTC
D
DC transmission
DITS
EBIT
EBITDA
ECA
ECECIMS
Backbone Electric Grid
Enterprise of Backbone Electric Grid
Annual Comprehensive Procurement System
Automated Controller System
Automated Document Circulation Management System
Asynchronised electromechanical frequency converter
Automated Repair and Maintenance Management System
Automation system
Asynchronised synchronous condenser
Asynchronised Synchronous Electric Frequency Transformer
Automated System of Technological Control
Automated System of Technological Process Management
Autotransformer
Autumn-winter period
Baltic Pipeline System-2
Back-to-back scheme
Capacitor bank
Carrier-communication system
Corporation Information Management System
Central Tender Committee
Disturbance
Direct current transmission
Digital information transmission system
Earnings Before Interest and Taxes
Earnings Before Interest, Taxes, Depreciation and Amortisation
Emergency control automatics
Automated Commercial Electricity Consumption Information and Metering System
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Glossary
ECECMS
ESPO
FACTS
FOL
GIDS
GRES
HPP
HSC
HTSC
HTSCTL
KPI
LSTC
M&S
MAI
MCSR
MSK
NGO
NPP
OCO
OS
OTL
PST
R&D
RAB
RD
RPA
RPEC
RRL
RSK
S&A
SC
SC
SC
SS
STATCOM
SVC
TC
TCSC
TL
TPP
Automated Commercial Electricity Consumption Information and Metering System
Eastern Siberia-Pacific Ocean oil pipeline
Flexible Alternating Current Transmission Systems
Fiber-optic line
Gas Insulated Distributor System
State regional power plant
Hydro-electric power plant
Hardware and software complex
High-temperature superconductors
High-temperature superconducting cable transmission line
TR
UDGTS
UES
UES of Russia
UGTS
UNEG
UPFC
VRG
WECM
Technical requirements
Unified Digital Grid Telecommunications System
Unified energy system
United Energy System of Russia
Unified Grid Telecommunication System
Unified National (All-Russian) Electric Grid
Unified power flow controller
Vacuum Reactor Groups
Wholesale Electricity (Capacity) Market
Key performance indicator
Low-temperature superconductors
Maintenance and servicing
Multi-chamber Arrestor Insulator
Magnetically controlled shunt reactor
Transmission company
Non-governmental organisation
Nuclear Power Plant
Operational Controller Office
Outdoor switchgear
Overhead transmission line
Phase shifting transformer
Research and development
Regulatory Asset Base
Requirement description
Relay protection and automatic equipment
Relay protection and emergency controls
Radio relay line
Distribution company
Subsidiaries and branches
Synchronous condenser
Series capacitor
Sales company
Substation
Synchronous static compensator
Static VAR compensator
Technological connection
Thyristor controlled series capacitor
Transmission line
Thermal power plant
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173
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Glossary
CONTACT
DETAILS
12
Federal Grid Company:
Address: 5A Akademika Chelomeya Street, Moscow, 117630, Russia
Telephone: +7 (495) 710 9000
Fax: +7 (495) 710 9655
E-mail: info@fsk-ees.ru
Website: www.fsk-ees.ru/eng
Direct line for shareholders: 8 800 200 1881
Contact details for institutional investors and analysts:
Investor Relations Department
Telephone: +7 495 710-90-64
E-mail: ir@fsk-ees.ru
Information on the auditor (auditors) of Federal Grid Company:
The Annual General Shareholders Meeting on 30.06.2009 approved PricewaterhouseCoopers Audit as
the auditor of Federal Grid Company for the period until the next AGM.
The complete and abbreviated names of the Company are: PricewaterhouseCoopers Audit
Address: 10 Butyrskiy Val Street, Moscow, 125047, Russia
Telephone: +7 (495) 967 6000
Fax: +7 (495) 967 6001
E-mail: natalia.gubareva@ru.pwc.com
Website: http://www.pwc.com
Number, date of issue and term of the auditor's licence, name of the issuing authority:
Licence for auditor services: No. E000376, issued by Decree No. 98 of the Finance Ministry of the
Russian Federation, dated 20.05.2007, for a term of five years from the date of issue.
No factors have been identified that may affect the independence of the auditor from Federal Grid
Company.
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Contact details
Information on the registrar:
Full company name: National Depositary Centre
Abbreviated company name: NDC
Address: 1/13, Building 4, Sredniy Kislovskiy, Moscow,
Postal address: 1/13, Building 4, Mashkova Street, Moscow, 105062
Telephone: (495) 221 1333
fax: (495) 221 1383
E-mail: dr@mcd.ru
Licence information:
Licence number: 177-03431-000100
Date of issue: 04.12.2000
Term of the licence: indefinite
Issuing authority: Federal Commission for the Securities Market