2.5

Technological connection

Demand for technological connection to electric networks mirrors last year’s demand. In 2015 we concluded 30,197 contracts (+25 contracts YoY). Total requests for technological connection filed with the Company decreased slightly on 2014 to amount to 36,134 requests. The amount of executed contracts in 2015 almost equals 2014 figures: we connected 34,429 consumers (34 593 consumers in 2014), though capacity in requests and under concluded contracts sharply fell down: -38% in requests and -52% under concluded contracts, as compared to 2014. Connected capacitance totaled 1,080 MW (+14% YoY). Key trend to be easily outlined is that demand for technological connection to networks in residential development continued to persist. We also see gradual uptick in the connections of small-scale generation facilities to our electric networks.

During the reported period the Company has performed a range of activities, stipulated by the corporate network availability roadmap: automation of in-house business processes, enhancement of access to information for consumers (incl. conduct of public seminars, etc.), improvement of technical solutions and increase of in-house workscope.

Demand for connection (pcs)*

25
25
25

Demand for connection (MW)*

25
25
25

Fishery, manufacturing, mining operations, transportation and communications showed a dramatic decline of requests for technological connection in 2015, as compared to 2014.

Connection request comparison table for 2014-2015 is presented below:

IDGC of Urals (OAO) Connection requests filed* Change
2014 2015 absolute % absolute %
pcs MW pcs MW pcs pcs MW MW
Individuals 28,958 363.66 27,820 359.03 -1,138 -3.9 -4.63 -1.3
Agriculture, hunting and forestry 703 104.04 632 54.62 -71 -10.1 -49.42 -47.5
Fishery and fish farming 6 0.12 2 0.05 -4 -66.7 -0.07 -62.2
Mining operations 58 89.05 38 43.50 -20 -34.5 -45.55 -51.1
Manufacturing 252 101.79 162 74.66 -90 -35.7 -27.13 -26.7
Production and distribution of electric energy, gas and water (generators) 15 852.67 12 176.91 -3 -20 -675.75 -79.3
Production and distribution of electric energy, gas and water (electric networks of regional grid operators) 73 134.98 56 184.77 -17 -23.3 49.79 +36.9
Production and distribution of electric energy, gas and water (others) 318 157.76 305 138.85 -13 -4.1 -18.92 -12
Real estate development 1,570 489.91 1,145 293.41 -425 -27.1 -196.50 -40.1
Wholesale and retail distribution; repair of cars, motorcycles, household goods and personal appliances 1,200 136.41 931 36.92 -269 -22.4 -99.49 -72.9
Transportation and communications 547 105.18 377 13.04 -170 -31.1 -92.14 -87.6
Education institutions 190 22.02 143 16.94 -47 -24.7 -5.08 -23.1
Healthcare and social service institutions 170 28.11 142 8.40 -28 -16.5 -19.72 -70.1
Other 4,420 635.93 4,369 588.56 -51 -1.2 -47.36 -7.4
INDUSTRY TOTAL 9,522 2,857.96 8,314 1,630.62 -1,208 -12.7 -1,227.34 -42.9
TOTAL, incl. individuals 38,480 3,222 36,134 1,989.65 -2,346 -6.1 -1,231.97 -38.2

* data excludes temporary connection

Connection contracts cancelled during the reported period

pcs MW RUB mn returned, excl VAT Contract value, RUB mn, excl. VAT
2014
Permenergo 656 52 12.55 212.80
Sverdlovenergo 1,241 32 11 61.19
Chelyabenergo 643 96 5.97 25.08
Total 2,540 179.62 30.02 299.07
2015
Permenergo 617 (-6% YoY) 58 (+13%) 28.83 (+130%) 264.40 (+24%)
Sverdlovenergo 1,402 (+13%) 53 (+63%) 65 (+467%) 154.32 (+152%)
Chelyabenergo 854 (+33%) 121 (+27%) 10.00 (+67%) 74.01 (+195%)
Total 2,873 (+13%) 180 (+29%) 104.02 (+247%) 492.72 (+65%)

Connection requests are waived in the following cases:

A filer changes intentions (changes in terms for construction of filer’s equipment) A filer waives the project (no funds) A filer has no intentions to construct any facilities (specifications received just to increase value of filer’s land plot)

During 2015 Permenergo has cancelled 617 contracts upon filer’s initiative (58 MW, RUB 264.4 mn, excl. VAT), cancellations declining 6% YoY. Most of the contracts (79%) were cancelled by 0-15 kW filers, 69% of cancellations done by individuals. Sverdlovenergo has cancelled 1,402 contracts (53 MW, RUB 154.3 mn), cancellations increasing 13% YoY. Most of the cancelled contracts (93% or 1,310 contracts) were 0-15 kW contracts, 83% or 1,163 contracts being contracts concluded with individuals. Chelyabenergo has cancelled 854 contracts upon filer’s initiative (121 MW, RUB 74.01 mn), cancellation hiking 33% YoY. Most of the contracts (78%) were cancelled by 0-15 kW filers, 57% of cancellations done by individuals.