1.1

Mission. Strategic goals and priorities

Our Mission is:

Provision of maximum network security and availability for consumers.

Our strategic goals are:

1. Improved quality and reliability
of end-user services
2. Enhanced energy efficiency
(energy-saving and loss reduction)
3. Revamp
of Company’s grid facilities (innovations)

Our strategy complies with long-term objectives of the Strategy of Russian energy sector developmentNo.1-ref (next time you see this sign, please, refer to Appendix “References”):

Long-term firm and open transmission service Reliability and safety of network performance
Build-up of electric networks with max efficiency, compliant with global standards Energy tariffs, affordable for the Russian economy to promote its investment attractiveness

Our strategic priorities mainly focus on:

Improved reliability and quality (to meet consumer demands) Enhanced safety(reduced injuries, incl. unreported) Enhanced network efficiency and RGO quantity reduction 50% by 2017 (on 2012) and 50% by 2030 (on 2017)
Opex reduction 15% by 2017 (on 2012), adjusted for inflation, per 1 unit Reduction of administrative expenses at least15% down on 2013 figures Reduction of investment expenses30% by 2017 (on 2012), in ruble terms per 1 physical unit (km, MVA)
Execution of the government directive No.2-ref reduction of per-unit year-end opex

RELIABILITY

Repair program

Monitoring of equipment condition facilitates scheduling of repairs and is comprised of preliminary in-depth survey, status-check evaluation by experts and technical diagnostics of equipment, compliant with relevant regulatory and administrative documents. Repair campaign primarily focuses on life extension of power equipment when obsolete parts and components of power equipment are replaced by cutting-edge ones: new arresters instead of obsolete ones, RIP-insulated transformer bushings instead of oil-filled ones; renewal of post insulators of discharge switches; polymer insulators instead of damaged porcelain ones; new overhead protection cable instead of a battered one to improve operability of aerial power lines and substations during thunderstorm season; spiral fittings instead of compression and bolted ones; wood (used for 0.4-10 kV power line poles), soaked in new-generation eco-friendly preservatives, to replace damaged one, etc.

Capital construction quality control

The Company supervises construction works with a view to implement the government decreeNo.3-ref and to oversee that construction, reconstruction and refurbishment works comply with design documentation, technical rules, land plot development plans and site investigations.

Consolidation of grid assets and interaction with local grid operators

As for property acquisition, during the reported period we have closed a number of deals to improve operability of grid facilities and to lessen future connection costs. In the course of interaction with proprietors or other legal owners of network facilities, inconsistent with the RGO criteria embodied by the government decree No.4-ref (with regard to the transfer of grid asset management functions), we analyzed consolidation of these assets in terms of feasibility, found a range of network assets attractive to us and negotiated consolidation prospects with the owners. Prevailing part of proprietors intends to reap benefits as RGOs further on, presenting inconsistent conditions for asset transfer.

ENHANCING ENERGY EFFICIENCY

During 2015 IDGC of Urals (OAO) entrenched energy-saving and enhanced efficiency practices in line with federal No.5-7-ref and regionalNo.8-10-ref laws and bylaws of the CompanyNo.11-ref. The Company has obtained a certificate No.15.1098.026 dated as of 26.06.2015 to verify compliance of its energy management system with ISO 50001:2011. See more details on the subject-matter in the Board of Directors’ progress report.

INNOVATIONS

Program of Innovation Development

Our R&D program is compiled by sector-specific challenges and prospective innovation concepts and is comprised of: i) activities focusing on breakthrough technologies targeted at revolutionary developments, technologies and methods; and ii) practical issues aiming to improve known technologies.

Program projects deal with energy transmission and are focused on:

Device developmentIncl. devices, appliances, facilities, hardware complexes, their components (operating and electrical schemes or alternate design) Development of novel materials and/or substances(compositions) Development of handling tools (accounting, measuring, probing, technological, etc. tools, incl. tools used to produce products, appliances, materials, substances)
Creation of soft-&hardware and e-databases R&D works preceding never-before-seen prototypes and experimental models (equipment, facilities, technologies, materials, substances, processes, software and electronic databases)

Program proposals originate from the R&D policy with regard to:

  • Fundamentals of network build-up and performance;
  • Electrical machinery and power line paraphernalia;
  • Network relay protection and automation;
  • Telecommunications and IT;
  • Reliability, security and energy saving;
  • Integrated infrastructure projects.

The Company has its own R&D Board, active since 2008. It is a collegiate advisory body, established to deal with innovations and technical policy, coupled with finding prospective growth areas for networks. The Board coordinates development and onward implementation of new technologies and equipment at newly constructed and refurbished facilities to improve reliability and efficiency of network performance and reduce exploitation costs.

Program of Prospective Development of Retail Metering Systems

The Program of Prospective Development of Retail Metering Systems (or PDRMS program) was adopted by the Board of Directors No.12-ref. To perform activities, outlined by the program, we actively work to create and upgrade data-measuring systems and to computerize collection of data from metering devices. Objects of the program’s focus are energy supply junctions located at the entrance points of multifamily residential houses, 35 or 110 kV substations or boundaries with small-scale and household consumers. All these facilities are located in heavy-loss electric networks. Most of installed or replaced metering devices are integrated into computerized metering systems. Anticipated total effect from the measures, delineated by the investment part of the program, is linked with i) reduced commercial losses due to enhanced accuracy class of metering devices; ii) limitation of unauthorized access of consumers to metering devices and circuits; iii) possibility to reveal electricity theft and misreporting more effectively; and iv) increase of reported energy transmission due to the unison of metering and integrity enhancement processes.