Rendering of grid connection services

Grid connection services are rendered to legal entities and individuals wishing to get an opportunity of power supply of newly constructed facilities for different purposes, and to consumers requiring increased power consumption on the facilities connected to JSC Lenenergo grid.

General scheme of the technological connection process

Sales volumes

By results of 2013 JSC Lenenergo provided connection under 7,378 contracts having exceeded a similar indicator of 2012 by 6%. The volume of connected capacity over JSC Lenenergo (taking into account connection of generation facilities) for the similar period increased by 47% concerning 2012.

The main contribution to increase in the volume of executed obligations is provided by results of grid connection activities in the territory of St. Petersburg: increase in quantity concerning 2012 by 9%, in capacity – by 68%.

Dynamics of grid connection contracts performance in 2011–2013

2011

2012

2013

Change, 2013/2012, %

pieces

MW

pieces

MW

pieces

MW

pieces

MW

JSC Lenenergo

6,302

321

6,949

523

7,378W/o connection of generation facilities under three grid connection contracts for the general capacity of 400 MW.

371W/o connection of generation facilities under three grid connection contracts for the general capacity of 400 MW.

6

– 29

St. Petersburg

2,328

169

2,037

338

2,224

207

9

– 39

Leningrad Region

3,974

151

4,912

185

5,154

165

5

– 11

In 2013 JSC Lenenergo provided grid connection of the following generation facilities:

  • 3 hydroelectric generators on blocks 1,2,4 of Svetogorsk hydroelectric power station, 11 hydroelectric generators of Lesogorsk hydroelectric power station (21.75 MW);
  • 2 combined-cycle plants on Pervomayskaya heat station-14 in St. Petersburg (360 MW);
  • 3 hydroelectric generators on Lesogorsk hydroelectric power station-10 in the Leningrad Region (18 MW).

Thus, total revenue under the executed contracts on grid connection of the specified generation facilities made less than 1% of the total consolidated sales of JSC Lenenergo for 2013.

Breakdown of connected capacity

The indicator of connected capacity has been growing since 2011. Considerable prevalence of the group “Over 670 kW” is caused by connection of large generation facilities in the territory of St. Petersburg and Leningrad Region.

The main share in the structure of declared capacity across St. Petersburg belongs to the category of applicants “Over 670 kW” – 89% from the general declared capacity (including connection of the generation facilities of Pervomayskaya heat station-14 for 360 MW, and Glavstroy of St. Petersburg for 8.6 MW). The category “From 150 kW to 670 kW” being second-large makes 7% of the general capacity which corresponds to 40 MW.

Distinctive feature of grid connection in the territory of the Leningrad Region is prevalence of applicants on the group “Up to 15 kW” making 27% of the total amount of connected capacity.

Across the Leningrad Region the maximum share in structure of declared capacity also belongs to the category “Over 670 kW” which corresponds to 61% of the total amount of connected capacity.

Breakdown of connected capacity on primary branches of activity in 2013

The main contribution in the structure of connected capacity of St. Petersburg besides generation facilities is formed by applicants of construction branch (22% in the general structure of connected capacity), and facilities of wholesale and retail trade (3%). Processing productions, distribution of electric power, gas, water and health care facilities in the sum form about 5% of connected capacity (27 MW).

A considerable share in the structure of connected capacity on the territory of the Leningrad Region is occupied by the group “Individuals” (24% of total amount of connected capacity).

The volume of demand for grid connection

In 12 months 2013 JSC Lenenergo received 28,444 demands for grid connection from consumers on total capacity of 2,828 MW. Thus, according to JSC Rosseti requirements at formation of the volume of demands there are considered demands not only of the current period, but also of the previous periods on which contracts in the reporting period were signed.

The main share of demands was accepted from applicants across the Leningrad Region and it totaled 21,467 pieces on the general capacity of 1,307 MW.

By results of work for the reporting period a slight decrease in the number of demands is noted that is caused by a slowdown of business activity in the region.

In 2013 JSC Lenenergo signed 18,066 contracts, including 4,663 pieces across St. Petersburg for the general capacity of 337 MW and 13,403 pieces across the Leningrad Region for the general capacity of 518 MW.

Volume of demand for grid connection in St. Petersburg and the Leningrad Region

Indicator

2011

2012

2013

Change, 2013/2012, %

pieces

MW

pieces

MW

pieces

MW

pieces

MW

Demands on grid connectionthe volume of demands for the reporting period, and demands of the previous periods on which contracts in the reporting period are signed are specified

JSC Lenenergo

19,870

2,306

29,832

2,934

28,444

2,828

– 5

– 4

St. Petersburg

4,453

1,454

7,341

1,682

6,977

1,521

– 5

– 10

Leningrad Region

15,417

853

22,491

1,252

21,467

1,307

– 5

4

Concluded contracts on grid connection

JSC Lenenergo

14,561

485

20,160

1,410

18,066

855

– 10

– 39

St. Petersburg

3,656

247

5,366

901

4,663

337

– 13

– 63

Leningrad Region

10,905

238

14,794

510

13,403

518

– 9

2

The structure of declared capacity of JSC Lenenergo in 2013 testifies to prevalence of a share of the group “Over 670 kW” in the total amount of capacity both in St. Petersburg and in the Leningrad Region.

Distinctive feature of structural breakdown of applicants in the territory of the Leningrad Region is prevalence of applicants on the group “Up to 15 kW” (19% of the general declared capacity).

Dynamics of declared capacity on categories of applicants in JSC Lenenergo testifies to steady growth of this indicator since 2011 (increase by 52% to the level of 2013) and is provided at the expense of increase in contribution of the group “Over 670 kW”.

Technological connection of preferential categories of applicants

Among main challenges of JSC Lenenergo is ensuring appropriate grid connection of applicants to power network equipment. The number of potential consumers submitting applications for connection to electric networks of JSC Lenenergo has been steadily growing.

In accordance with the basic provisions approved by the Resolution of the Government of the Russian Federation # 1178 “About pricing in the field of regulated prices”, the cost of grid connection of power accepting devices of applicants up to 15 kW is defined at the rate of 550 rubles per one connection. The specified changes in turn led to a repeated growth of the number of contracts signed with this group of applicants (a preferential category).

The applicants which connection is carried out on the 3rd category of reliability on one source of power supply taking into account earlier connected power accepting devices, at voltage level below 20 kV inclusiveand being at distance no more than 300 meters in cities and no more than 500 meters in rural areas to the existing power network facilities of grid organizations treat a preferential category of applicants.

By results of 2013 connection of the applicants of preferential category (550 rub per connection) in the volume of revenue of RUB 0.08 mln w/o VAT across St. Petersburg and RUB 2.27 mln w/o VAT across the Leningrad Region was made.

Concerning gardening and country noncommercial associations the payment rate for grid connection of power accepting devices should not exceed 550 rubles increased by the number of members of these associations.

However rates of performance of obligations towards the applicants of preferential category are significantly behind the rate of conclusion of new contracts.

The main reason for default of obligations in time is the lack of financing of capital works necessary for performance of specifications on grid connection of applicants.

The connected capacity amounted to: across St. Petersburg – 1.6 MW, across the Leningrad Region – 53.7 MW. Costs of work on connection of the preferential category of applicants totaled RUB 419.3 mln w/o VAT. Lost incomes across St. Petersburg for 2013 was RUB 34.1 mln w/o VAT and across the Leningrad Region – RUB 512.6 mln w/o VAT.

Performance of obligations under delayed contracts on grid connection

Deficiency of the funding source of capital works necessary for performance of specifications on grid connection of applicants leads to violation of terms to perform obligations. Emergence and accumulation of obligations towards applicants occurs for the following reasons:

  • existence of power stations closed for grid connections;
  • deficiency of financing of the investment program of JSC Lenenergo regarding grid connection;
  • avalanche growth of the volume of contracts with a preferential category of applicants.

As of 01.01.2014 the number of delayed obligations (without contracts with a property component) is 35,967 pieces with a total amount of connected capacity of 1,080 MW that makes 80% of all accumulated obligations. It is necessary to take into consideration that 27% of total delayed obligations are not executed through the fault of the applicant.

The plan of execution of current, accumulated and delayed obligations towards applicants of St. Petersburg and the Leningrad Region has been developed to determine the necessary volume of expenses and rates of performance of JSC Lenenergo contracts under which there are defined:

  • the volume of expenses necessary for execution of accumulated obligations in the volume of RUB 40 bn, including RUB 11.5 bn with VAT for preferential categories of applicants;
  • physical parameters of constructed power network facilities till 2017 (more than 8,000 km of OTL 0.4–110 kV are constructed/reconstructed, about 1,700 TS/RS 0.4–10 kV with replacement of transformers are reconstructed, and more than 2,700 TS/RS 0.4–10 kV are constructed), etc. Following the results of 2013 JSC Lenenergo has already provided input of 820 facilities for the general capacity of 592.1 MVA and total length of lines of 1,764.4 km on the voltage level 0.4–10 kV.
W/o connection of generation facilities.Structure of connected capacity under grid connection contracts

Indicator

Unit

2011 

Share, %

2012 

Share, %

2013 

Share, %

Connected capacity, including

MW

321

100

523

100

371

100

under current contracts

MW

130

41

227

43

164

44

under delayed contracts

MW

190

59

296

57

207

56

Revenue from grid connection services

Revenue structure under grid connection contracts

Indicator

Unit

2011

2012

20131

Change, 2013/2012, %

St. Petersburg

Revenue

RUB mln w/o VAT

4,710

6,173

5,198

– 16

Connected capacity

MW

169

338

207

– 39

Average rate under closed contracts

RUB/kW

27.8

18.3

25.2

38

Leningrad Region

Revenue

RUB mln w/o VAT

3,601

1,109

1,317

19

Connected capacity

MW

151

185

165

– 11

Average rate under closed contracts

RUB/kW

23.8

6.0

8.0

33

JSC Lenenergo

Revenue

RUB mln w/o VAT

8,311

7,282

6,515

– 11

Connected capacity

MW

321

523

371

– 29

Average rate under closed contracts

RUB/kW

25.9

13.9

17.6

26

The average rate under closed contracts is calculated as relation of revenue from grid connection (RUB thousand) to the size of connected capacity (MW).

The property form of contracts provides that the consumer of services independently satisfies specifications, and all property created at performance of these conditions, is transferred to JSC Lenenergo as a payment for grid connection. In connection with the entry into force in 2010 of changes in the Rules of grid connection (# 759) under which all obligations to the borders of the applicant’s site are executed by a grid organization, conclusion of property contracts was stopped.

Decrease in the average rate in 2012 concerning 2011 was caused by existence in revenue of 2011 of large contracts with LLC Gazprominvestzapad concluded on the individual rate.

Revenue of JSC Lenenergo from rendering grid connection services is made by contracts with payment of service of two types:

  • cash in full volume (“monetary contracts”)
  • contracts with a property component (“property contracts”).
Breakdown of executed contracts by payment method, RUB mln w/o VAT

Indicator

2011

Share, %

2012

Share, %

2013 

Share, %

Revenue from grid connection services

8,311

100

7,282

100

6,515

100

under monetary contracts

6,238

75

5,428

75

4,582

70

under property contracts

2,073

25

1,854

25

1,933

30

Decrease in revenue by results of 2013 concerning 2012 is caused by postponement for 2014 of the terms of performance of a large contract due to the lack of granting by the applicant of working documentation.

Profit and loss from grid connection activities

Results of financial and business activity on grid connection for 2011–2013, RUB mln

Indicators

2011, RUB mlnIndicators for 2011–2012 are given according to the annual accounting reporting for 2013 taking into account retrospective data reflection.

2012, RUB mlnIndicators for 2011–2012 are given according to the annual accounting reporting for 2013 taking into account retrospective data reflection.

2013, RUB mln

Change,

2013/2012, %

Revenue from grid connection services

8,311

7,282

6,515

– 10.5%

Cost of grid connection services

1,226

400

437

9.2%

Gross profit on grid connection services

7,084

6,882

6,078

– 11.7%

Other income and expenses

105

– 23

34

Profit (loss) before tax from grid connection services

6,979

6,905

6,045

– 12.5%

Profit tax

561

411

312

– 24.1%

Net profit (loss) from grid connection services

6,418

6,494

5,733

– 11.7%

Decrease in net profit is caused by negative dynamics of revenue from grid connection in 2013 in comparison with 2012.

Introduction of customer service standards

Among priorities of the Company’s development today is improvement of interaction with customers by implementing a client-focused approach aimed at ensuring maximum transparency and efficiency when rendering services.

Customer focus has been introducing at the expense of creation and functioning of the system of centralized customer service. The standard “System of centralized customer service” was approved by the decision of the Board of Directors (item 6 of Minutes # 13 of 19.12.2011).

The number of basic principles of the system of centralized service includes

  • sufficient knowledge of customers about the Company and services;
  • territorial availability and comfortable conditions of internal service;
  • availability and efficiency of correspondence and interactive services;
  • qualified service;
  • transparency of business processes of service and objectivity of consideration of complaints submitted by customers.

In 2013 the following actions directed to enhance the Company’s customer focus were implemented:

  • Procedures on the business process regulation “Grid connection to electric networks” were carried out, sub-processes were described, and duty regulations were updated.
  • Average time of processing of applications was reduced, the system of applications registration was improved (including at the expense of development of the system of electronic documents flow), and preparation of draft contracts on grid connection with introduction of an automated control system by the process of grid connection (ACS) SharePoint was automated.
  • Single telephone number of JSC Lenenergo allowing getting information on all major activities when contacting the Company was created.
  • Possibility of application for grid connection by phone was introduced (at the maximum capacity of power accepting devices up to 15 kW), and the extra service providing possibility of implementation of “turnkey” grid connection is being introduced.
  • Function of submitting an application for grid connection through a private office on the website of a grid organization on the internal portal on the Internet, allowing tracking main stages of the course of processing of the application for grid connection was introduced in a test mode.
  • Geo-information system displaying information on power supplies on the map of St. Petersburg and the Leningrad Region has been functioning.
  • Automation of all sub-processes of grid connection with a view of implementation of the system of continuous improvements was carried out.
  • The additional office of Client service center across the Leningrad Region «Tikhvin» was open in 2013.
  • Council of consumers of JSC Lenenergo was established.

Actual indicators of the quality of rendered services characterize primary activity of the Company (grid connection and electric power transmission) and are calculated on the basis of calculation methods approved by Ministry of the Power Industry. In the basis of calculation of indicators of the quality of rendered services the total of applications of consumers of services (demands and contracts on rendering of services, inquiries of reference information and so on) is used. Planned values of indicators of the quality of rendered services for the long-term period of regulation are approved by executive authorities of subjects of the Russian Federation. The planned indicators of rendered services established by regulators by results of 2013 are considered reached due to implementation of the customer-focused approach.

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