- Electricity transmission to electric networks, as well as technological connection to electric networks are regulated by the state. Regulatory approval of tariffs for services directly influences volumes of the received proceeds.
Thus, according to the decision of the Government of the Russian Federation on June 11, 2014 #542, executive bodies on subjects of the Russian Federation in the field of state regulation of tariffs, was entrusted to take decisions on the establishment of (revised) from July 1, 2014 united (boiler) tariffs for electric power transmission if these tariffs are set from July 1, 2014 at a level exceeding the specified level of tariffs as of June 30, 2014, in order to ensure the establishment of united (boiler) tariffs from July 1, 2014 for the second half of 2014 at a level not to exceed the level of these tariffs as of June 30, 2014.
In connection with the need to execute the decision of the Government of the Russian Federation, the Company’s revenue from electric power transmission services was decreased.
Also, to a shortfall of revenue as a result of the choice of the two-part tariff type by consumers conducts overestimate by the regulator of capacity of declared power, applied in the calculation of tariffs, over the actual capacity.
- Implementation in conjunction with the Federal Tariff Service and the bodies of regulation of tariffs of the Russian Federation measures to amend the current legislation of the Russian Federation in the field of pricing on services of natural monopolies, aimed to protect the interests of distribution grid companies at establishment of tariffs for electric power in the retail market.
- Conducting systematic work with regional regulators to establish economically justified tariffs that include all possible costs.
- Work on pre-trial settlement of the dispute with the Committee on Tariff on how to apply the level of the declared capacity to calculate the joint-operations tariff for the maintenance of electric networks in St. Petersburg.
- Increase the operating efficiency of the Company by implementing programs to reduce production costs.
- Approval of volumes and sources of financing of the investment program with the authorities in view of territorial development programs.
||Technological connection risks
- Due to the large amount of applications for technological connection (TC), the risks of breaching the antimonopoly legislation in terms of the provision of services on technological connection and initiating by applicants of legal actions.
- The risk of profits loss on non-fulfillment of the contract properly on the implementation of the TC.
- Failure to comply with the obligations by the applicants, including the rejection of TC leads to non-use of newly constructed equipment and the potential revenue shortfall from electricity transmission services.
- There is a risk of reducing the volume of connected capacity in applications on TC to the electric networks.
- The risk of source deficiency of funding for the implementation of the TC contracts consequence of the approval by regulator of rates for TC below economically reasonable level.
- Implementation of the plan of execution of accumulated liabilities.
- Optimization of the processing of consumers applications on TC using information technology and standard solutions, the development of interactive services.
- Reduce the stages and timing of the TC.
- Work with claims in respect of the applicants in terms of cost recovery for the TC.
- Conducting work to monitor the dynamics of the volume of the maximum power at the request of applications on TC, forming the correct amount of obligations under contracts on the implementation of the TC, providing other supporting materials to the regulatory bodies.
- Work in a working group under the Government of St. Petersburg “Improving accessibility of energy infrastructure,” elaboration of measures aimed at reducing the time and stages of the TC realization, oriented, including amending in regulations on land use and construction of network objects.
||Risks of growth of overdue and bad accounts receivable
- Disagreements between the electric grid and power supply companies in respect of the volume of consumption of electricity and power applied in the calculation of tariffs. The consequence of this is the appearance of the disputed and overdue receivables for transmission services, which leads to lower liquidity and financial stability of the Company.
- Company performs an analysis and systematization of the reasons of disagreement on the volume of electricity transmitted, implemented a set of measures for the settlement of disputes, debt collection and claims work.
- Implementation of comprehensive Program of energy saving and increase of power efficiency, including the installation of metering devices and activities to identify of non-contractual consumption.