Implementation of the investment program in 2013

The investment program for 2013 was formed pursuant to requirements of the Resolution of the Government # 977 of 01.12.2009, coordinated by subjects of the Russian Federation and approved in the structure of the investment program for 2012-2017 by the Order of the Ministry of Power Industry of Russia # 240 of 05.05.2012.

Capex under the investment program for 2013 totaled RUB 18.7 bn.

In 2013 within investments 907 MVA of transformer capacity and 1,846 km of power lines were put in operation. The gain of capacity made 709 MVA and 1,159 km.

Dynamics of execution of the investment program

Name	Capex	Input of fixed assets	Financing	Capacity input		Capacity gain
	RUB mln w/o VAT	RUB mln	RUB mln with VAT	МVA	km	МVA	km
	2011
St. Petersburg	10,829	11,246	11,446	623	935	513	740
Leningrad Region	4,232	5,077	4,101	373	778	279	341
JSC Lenenergo, total	15,061	16,323	15,547	996	1,713	792	1,081
2012
St. Petersburg	11,515	12,424	12,337	1,409	716	951	657
Leningrad Region	3,377	3,651	3,663	502	864	314	355
JSC Lenenergo, total	14,891	16,075	16,000	1,911	1,581	1,265	1,012
2013
St. Petersburg	13,158	14,355	13,940	603	764	529	620
Leningrad Region	5,570	4,299	5,405	304	1,082	181	539
JSC Lenenergo, total	18,729	18,653	19,345	907	1,846	709	1,159
Gain 2013/2012, %
St. Petersburg	14	16	13	−57	7	−44	−6
Leningrad Region	65	18	48	−39	25	−42	52
JSC Lenenergo, total	26	16	21	−53	−17	−44	15

In relation to the level of 2012 for the reporting period the volume of Capex increased by 26%. It was caused by:

works under contracts on technological connection under obligations – this is one of the main directions of investment activity of the Company which purpose is execution of accumulated obligations on technological connection, including towards a preferential category of consumers of St. Petersburg and the Leningrad Region pursuant to the concept of execution of accumulated obligations on technological connection, approved by the Company’s Board of Directors.
execution of actions under the signed contract on technological connection on the individual tariff on a title “New DS-110 kV with CL-110 kV for connection of new substations 110 kV of “Kamennogorsk-tyagovaya”, “12 km”, “29h km”, “46” of FSUE Uniform Group of Customers of the Federal Agency of Railroad Transport.

Decrease in the rates of input of transformer capacity in 2013 (–53%) is connected with early input of equipment in 2012 that is reflected in the report on execution of the investment program for 2012, +51% to the plan (under the approved investment program the input of facilities was planned in 2013):

In St. Petersburg – substation # 127 (126 MVA), substation # 33 (32 MVA), substation # 93 (126 MVA), substation # 185 (160 MVA – leasing), substation # 369 (63 MVA – leasing), 161.4 MVA – property for payment of additional issue of JSC Lenenergo shares;
In the Leningrad Region – substation # 484 (50 MVA), substation # 158 (80 MVA), substation # 98 (63 MVA – leasing).

In 2013 the growth of input of power lines made 17% that is also caused by works on construction and reconstruction of distributive grid 0.4–10 kV under contracts on technological connection of consumers on accumulated obligations, including of a preferential category of applicants.

Actual implementation of the investment program in comparison with the plan

	2011		Change, %	2012		Change, %	2013		Change, %
	Plan	Fact	Change, %	Plan	Fact	Change, %	Plan	Fact	Change, %
Capex, RUB mln w/o VAT	15,633	15,061	−4	14,100	14,891	6	13,039	18,729	44
Input of fixed assets, RUB mln	17,105	16,323	−5	16,023	16,075	0	13,934	18,653	34
Financing, RUB mln with VAT	19,463	15,547	−20	16,327	16,000	−2	15,954	19,345	21
Input of fixed assets
transformer capacity, MVA	744	996	34	1,267	1,911	51	1,051	907	−14
power lines, km	1,444	1,713	19	1,363	1,581	16	696	1,846	165

Decrease in the growth rates of input of transformer capacity in 2013 (–14%) is caused by early input of equipment in 2012 that is reflected in the report on execution of the investment program for 2012 (+51%). According to the approved investment program input of objects was planned in 2013.

Sources of financing of the investment program

The main sources of Capex financing of JSC Lenenergo in 2013 are: amortization, additional issue of shares, or technological connection fees, debt funds, and VAT refund.

	2011	2012	2013
	RUB mln w/o VAT
Sources of investments (on financing), total	15,547	16,000	19,345
Own funding sources
Amortization	4,415	2,826	1,903
Net profit	377	0	0
Additional issue of shares	0	1,204	1,770
Other own sources (calculations by property, lost income)	1,916	1,386	1,319
VAT refund	2,251	2,119	2,533
Debt funding sources
Borrowings (credits and loans)	2,838	5,174	7,032
Technological connection fee – advance payments	3,751	3,290	4,788

Directions and structure of Capex

Structure of Capex, RUB mln w/o VAT

	2011	2012	2013	Change, 2013/2012, %
St. Petersburg	10,829	11,515	13,158	14
Retrofitting and renovation	4,510	3,156	3,430	9
New construction	6,242	7,344	9,704	32
Other	77	1,015	25	−98
Leningrad Region	4,232	3,377	5,570	65
Retrofitting and renovation	2,242	2,141	3,084	44
New construction	1,982	1,213	2,463	103
Other	8	23	23	1
JSC Lenenergo, total	15,061	14,891	18,729	26
Retrofitting and renovation	6,753	5,297	6,513	23
New construction	8,223	8,557	12,167	42
Other	85	1,037	48	−95
Including under the programs
Technological connection	9,196	10,417	11,860	14
Renovation of basic equipment and auxiliaries	10,530	6,320	4,899	−22
Energy saving and increase of power efficiency	13,631	3,523	6,873	95
Creation of systems of anti-emergency and regime automatic equipment	53	68	89	31
Creation of telemechanics and communication systems	170	580	532	−8
Installation of devices for voltage regulation and compensation of circulating power	12
Application of innovative technologies and equipment	5,933	1,408	2,833	101
Actions for anti-terrorist security of facilities	61	55	125	129
Replenishment of emergency stock	22	79	42	−47%

In the structure of the investment program for 2013 34.8% of total amount of investments is the share of retrofitting and renovation. The growth of volumes of retrofitting and renovation by 2012 makes 23%.

Negative dynamics of decrease in other directions of Capex in 2013 is associated with property transfer from administration of St. Petersburg to the Company regarding electronetwork facilities in the amount of RUB 1.0 bn for payment of additional issue of JSC Lenenergo shares in 2012. Without the accepted property the dynamics and the share of this item of expenditures did not essentially change.

Decrease in the share of renovation of basic equipment and auxiliaries during the reporting period was caused by early input of equipment (including leasing equipment) in 2012.

Works on telemechanization and communication in 2013 were executed according to the planned parameters.

Negative dynamics of decrease regarding replenishment of emergency stock in 2013 concerning the level of 2012 was associated with reduction of large-scale technological violations.

In 2013 technological connection had the greatest weight in the total amount of Capex (RUB 10.9 bn, 58%); this is one of the main directions of investment activity of the Company which purpose is execution of accumulated obligations on technological connection.

Main directions of Capex in 2013

The program of special importance is the Program of renovation of CL 6–110 kV financed with attraction of federal funds, and it is also a priority task amounting to RUB 2.2 bn (12%).
RUB 1.6 bn (8%) were directed on retrofitting and renovation of facilities 35–110 kV in 2013.
New construction of facilities 35–110 kV totaled RUB 0.9 bn (5%).
RUB 1.3 bn (7%) were directed on development of distributive networks 0.4–10 KV.
The program of technological management automation was carried out according to ITT strategy of the Company and constituted RUB 0.7 bn (4%) in 2013.
The cost of program of introduction of AIMSEM systems totaled RUB 0.3 bn (1%).

The most important and priority projects of the investment program put in operation in 2013

Project name	Purpose of the project	Planned terms of construction	Date of object commissioning	Cost of fixed assets put in operation, RUB mln	Input of capacity, MVA/km	Structure of capital equipment
Reconstruction of substation 110 kV # 184	Increase of power supply reliability of consumers of Krasnogvardeysky district of St. Petersburg. Commissioning of capital equipment of substation and CL 110 kV (0.21 km) was carried out in 2012. In 2013 works on external networks of water supply and sewerage, system of security and fire alarm, and substation protection were complete.	2007–2012	Q4 2013	31		Outdoor switchgear 110 kV: PASS MO-145 (12 pieces); PASS MO(SBB) (13 pieces); RPAE cases; indoor switchgear 10 kV: (TLSh-10-5- UZ) (15 pieces)
Reconstruction of substation 110 kV # 17	Increase of power supply reliability of consumers and elimination of electronetwork restrictions in Kirovskiy district of St. Petersburg. The transformer capacity of 63 MVA was put in operation in 2008. In 2013 input of substation protection (0.8 km) was carried out.	2006–2013	Q4 2013 (partial input)	7		TDTN 63000/110-U1 power transformer (1 piece)
Reconstruction of substation 110 kV # 127 – increase of transformer capacity	Technological connection of consumers of Kurortny district of St. Petersburg. In 2012 input of two power transformers was carried out. In 2013 CDDEI equipment of 35 kV, the system of relay protection and automatic equipment of 35 kV, and substation control building were commissioned.	2007–2013	Q4 2013 (partial input)	180		U1 TRDN 63000/110 power transformer (2 pieces), KRUN-35kv UHL1 (1 to - t)
Substation # 124A with CL 110 kV	Technological connection of consumers of Kalininsky district of St. Petersburg. In 2013 a new building of substation was commissioned.	2007–2014	Q4 2013 (partial input)	182
Renovation of 6–110 kV, including	The target program on reconstruction of oil-filled CL	2013	2013	3,638	0/57
Reconstruction of CL 6–110 kV: CL 110 kV K-103, K-104	Decrease in the level of accident rate of grids. Ensuring reliability of power supply of industrial facilities and household enterprises of Vasilyevsky island and Petrograd part of St. Petersburg.	2010–2012	Q4 2013	643	0/8
Reconstruction of CL 6–110 kV; CL 110 kV K-105, K-106	Decrease in the level of accident rate of grids. Increase of power supply reliability of consumers of Central and Krasnogvardeysky districts of St. Petersburg. Input of CL 110 kV K-105, K-106 was carried out in 2012. In 2013 the equipment of temperature monitoring for the purpose of control over temperature parameters of cable lines was commissioned.	2010–2011	Q4 2012, Q2 2013	8
Reconstruction of CL 6–110 kV: CL 110 kV K-126, K-127	Increase in capacity of power lines with a view of increase of power supply reliability of consumers of Central district of St. Petersburg and creation of conditions for connection of additional loading.	2010–2012	Q4 2013	1,085	0/18
Reconstruction of CL 6–110 kV: CL 110 kV K-119, K-120	Decrease in the level of accident rate of grids. Increase of power supply reliability of industrial and household enterprises, and social and significant subscribers of Petrogradsky, Vyborgsky and Kalininsky districts of St. Petersburg	2013	Q4 2013	364	0/6
Reconstruction of CL 6–110 kV: CL 110 kV K-101, K-102	Decrease in the level of accident rate of grids. Increase of power supply reliability of industrial and household enterprises of Vyborgsky and Kalininsky districts of St. Petersburg	2013	Q4 2013	711	0/12
Reconstruction of CL 6–110 kV: CL 110 kV K-117, K-118	Decrease in the level of accident rate of grids. Ensuring increase of power supply reliability of consumers of Vyborgsky and Kalininsky districts of St. Petersburg.	2013	Q4 2013	357	0/6
Reconstruction of CL 6–110 kV: CL 110 kV K-140, K-141	Increase of power supply reliability of industrial and household enterprises of Vyborgsky and Kalininsky district of St. Petersburg, including consumers of 1 category of power supply reliability and socially significant facilities.	2013	Q4 2013	469	0/8

The most important and priority projects of the investment program launched in 2013

Project name	Purpose of the project	Planned terms of construction	Input of capacity, MVA/km	Structure of capital equipment
Complex development of electric networks of Petrogradsky district of St. Petersburg	Formation of the optimum scheme of power supply of Petrogradsky district providing possibility of connection of applicants in the terms required under contracts on technological connection taking into account declared category of reliability for the general capacity of 40.8 MW, and connection of future consumers on applications for the general capacity of 37.9 MW. Creation of a supplementary reserve of capacity and ensuring further development of grids of Petrogradsky district. Ensuring power safety at simultaneous decrease in specific expenses, increase of environmental safety of the historical downtown of St. Petersburg. Replacement of CL sites and substations’ worn out equipment.	2013–2016	511/85	9 x CDTS 35/6/0.4 kV in capacity of 2 x 12,5 MVA each; new substation 110 kV with transformers of capacity 2 x 63 MVA; reconstruction of existing substation 110 kV with installation of transformers of capacity 2 x 80 MVA
Reconstruction of CL 6–110 kV: CL 110 kV K-128, K-129	The project is implemented within the target program “Renovation of CL 6–110 kV” on reconstruction of oil-filled CL. The reconstruction will provide increase of power supply reliability of consumers of Vasilyevsky Island and Kirovskiy district of St. Petersburg, increase in capacity, connection of additional loadings to substation of JSC Lenenergo, increase of reliability of transits providing increase of stability of the power supply system in emergency operation, reduction of the volume of abortively interruptible loadings.	2013–2014	0/7
Reconstruction of CL 6–110 kV: CL 110 kV K-29, K-30	The project is implemented within the target program “Renovation of CL 6–110 kV” on reconstruction of oil-filled CL. The reconstruction will provide increase of power supply reliability of consumers of Admiralteysky and Moskovskiy districts of St. Petersburg, increase in capacity, connection of additional loadings to substation of JSC Lenenergo,, increase of reliability of transits providing increase of stability of the power supply system in emergency operation, reduction of the volume of abortively interruptible loadings.	2010–2013	0/2

The program of renovation of the cable network 6–110 kV in St. Petersburg financed by the federal budget

The program of priority actions on renovation of cable lines 6-110 kV financed with attraction of budgetary funds was developed with a view of increase of reliability of work of the cable network in St. Petersburg and provision of uninterrupted power supply of city districts.

Initial term of implementation of the program according to the agreement between JSC Rosseti, Ministry of Power Industry of the Russian Federation and St. Petersburg was planned for 2013. Subsequently there was signed a tripartite agreement between St. Petersburg, JSC Lenenergo and JSC Rosseti (approved by Minutes # 1, # 42-s of 21.08.2013), and supplementary agreements on implementation of the renovation program between Ministry of Power Industry and JSC Rosseti under which the deadline of implementation of the program was prolonged till 2014.

By results of 2013 execution of the plan of Capex under the program of renovation of CL 6-110 kV totaled 89%. The deviation from planned indicators is connected with existence of savings of budget cost by results of trading and procurement procedures.

In 2013 within implementation of the program “Renovation of CL 6-110 kV” input of CL 110 kV K-103, K-104; K-126, K-127; K-101, K-102, K-117, K-118; K-119, K-120; K-140, K-141 was carried out with the general length of 57.1 km in the districts of St. Petersburg.

As a result of the renovation of CL 110 kV the capacity of power lines increased that contributed to increase of power supply reliability of consumers of Petrogradsky, Central, Vyborgsky, Kalininsky, and Vasileostrovsky districts, including consumers of 1 category of power supply reliability and socially significant facilities, and to creation of conditions for connection of additional loading. The share of equipment with above-level time-frame after implementation of the projects made 0% at the indicator before implementation of the project of 100%.

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