Operational results

ELECTRICITY TRANSMISSION AND DISTRIBUTION

In 2007, the total length of the power transmission lines of all voltages owned by RAO UES entities amounted to 2,466,400 km, or 99.7 percent of the 2006 figure.

This reduction in the length of the Holding Company's lines was chiefly due to the retirement and derecognition of the depreciated lines of 0.38-20 kV, which lost their importance after liquidation of agricultural facilities or reduction in agricultural production, as well as due to the more precise measurement, land surveying and exclusion of leased lines, which were previously included in the figure.

In 2007, the actual net electricity supplied from the Unified National Electricity Grid (UNEG) to distribution companies, regional energos that have not been unbundled and direct customers on the wholesale electricity market amounted to 464,045.515 million kWh, an increase of 7.04 percent, or 30,513.775 million kWh from 433,531.74 million kWh in 2006.

Despite such an increase in the amount of electricity transmitted through the UNEG, energy losses in the networks were up by a mere 0.26 percent, or 55.7 million kWh. The insignificant increase in electricity losses amid rapid growth of electricity deliveries from the UNEG was the result of the energy loss management efforts undertaken by OAO "FGC UES" in the UNEG networks, which included implementation of metering systems and ensuring excellent quality of equipment maintenance.

During the reporting year, interval metering equipment will be installed along the UNEG perimeter, and work will be launched to automate data collection from these meters in accordance with the Programme for the creation of an automated commercial information and metering system adopted for the period until 2010.

In 2007, among the counterparties of OAO "FGC UES" were 90 entities connected to the UNEG, including distribution companies (74 percent), large electricity users (21 percent), and energy retail companies (5 percent).

Last year, OAO "FGC UES" entered into contracts for connection to the UNEG grid with a total capacity of 4,785.24 MW. Also, pursuant to connection contracts made previously, OAO "FGC UES" carried out measures to physically connect the applicants' power receiving equipment having a total capacity of 561 MW.

As at end-2007, the RAO UES distribution companies transferred 648,649.5 million kWh of electricity, an increase of 3.1 percent over 2006. The total energy losses in the distribution networks declined compared to 2006 to 8.31 percent of the electricity input in the power grid.

OPERATIONAL PERFORMANCE OF RAO UES DISTRIBUTION COMPANIES

The decline in overall electricity losses in the distribution networks was due to the fact that arrangements were put in place in 2007 to cut technical and commercial losses of electricity.

2007 saw ongoing work to have certificates of conformity of electricity quality issued. Subject to mandatory certification is electricity in 0.4 kV main substations from which electricity can be delivered to individual customers only for their personal use. Last year, certification was completed at 12,226 main substations out of 16,897, as compared to 4,671 n 2006. 207 certificates of conformity have been obtained which evidence that the electricity quality is in accordance with required parameters. The certificates are valid for 3 years. During this three-year period, electricity quality checks will be carried out on a regular and consistent basis.