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IDGC Holding, OJSC For Electric Energy Tariff Optimization and Distributive Grids Consolidation

08.04.2011

On April the 8th, 2011, Sergey Shmatko, the Minister of Energy of the Russian Federation, and Il’ya Klebanov, the Authorized Representative of the President of the Russian Federation at Northern-Western Federal District, carried out a joint video conference devoted to the issue of electric energy tariffs optimization. Heads of federal subjects, and top managers of the largest energy companies located at the Northern-Western district participated in implementation of the conference. IDGC Holding, Group of Companies were represented by General Director of IDGC Holding, OJSC managing company Nikolay Shvets, Deputy General Director for Economics and Finance of IDGC Holding, OJSC Aleksey Demidov, and General Director of JSC “IDGC of North-West” Aleksander Kukhmay.

In his speech, General Director of IDGC Holding, OJSC Nikolay Shvets provided for objective calculations of electric energy transmission tariffs set by regional energy commissions of federal subjects for the year 2011, and proposed measures for optimization. The Head of IDGC Holding especially underlined necessity of constructive decision of “last mile” issues and consolidation of distributive electric grids under IDGC Holding, OJSC and IDGC (interregional distributive grid companies) and DGC (distributive grid companies) at responsibility areas.

As Nikolay Shvets noted, “In case the ‘last mile’ issue is not timely regulated, distributive electric energy companies will get enormous incomes falling out hard to compensated even by means of credits. It can touch upon reliability of electric energy supply because of additional difficulties due to absence of sufficient funds for implementation of repair works and preparation of distributive electric grid complex depreciation of which equals approximately 70 percent.

— A grid company has no other sources of finance to implement repair programs except for means included in electric energy transmission tariff,” noted Nikolay Shvets.

Having told about the problem of electric grids fragmentation, the Head of IDGC Holding pointed out that IDGC Holding, OJSC was ready to become coordinator of all grid assets.

Due to Shvets, "Companies included in IDGC Holding have all necessary resources, production base, and trained personnel. Consolidation of grids will allow not only to give growth to electric energy supply reliability, but to significantly minimize spending on maintenance of numerous fragmented and, as practice shows, ineffectively working small scale grid companies at the territory of the Northern-Western federal district.

Il’ya Klebanov, the Authorized Representative at the Northern-Western federal district, performed an initiative to create a joint working group under the chairmanship of the Russian Federation Minister of Energy to work out proposals regarding decision of the problems pointed out under the joint meeting including the issues of electric energy tariffs optimization. Structure of the working group was proposed to include representatives of heads of regions, and directors of IDGC and DGC.

Minister of Energy Sergey Shmatko supported the initiative. Proposals worked out under joint consultations were expected to be provided to the Government of the Russian Federation by the next week.

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