Provision of Network Connection Services
Network connection is comprehensive services designed to make it technically feasible to supply electricity to customers and includes the actual connection of power-receiving equipment of electricity consumers, power generation facilities, and electric grid facilities owned by grid organizations and other persons to networks of grid organizations. Network connection services are provided for applicants in relation to power-receiving equipment that is put into operation for the first time or in relation to previously connected power-receiving equipment under rehabilitation if its connected capacity is increased and in the case of previously connected power-receiving equipment whose electricity supply reliability categories, connection points, or production operation type are changed without involving any revision of its connected capacity value but whose external electricity supply will be implemented in a different manner. The “Customers” section of the Company’s corporate website contains network connection information. This information includes as follows:
- A list of documents governing connection to electric grids of grid organizations;
- Model network connection contracts approved by the Russian Government;
- Links to the pages of websites of the Company’s subsidiaries with information about the current network connection fees.
Additionally, the Company’s corporate website contains a link to the Uniform Network Connection Portal at портал-тп.рф. The Uniform Network Connection Portal:
- Displays a map of main substations operated by the Company’s subsidiaries s and FGC UES in Russia;
- Provides customers with contact information of FGC UES and the Company’s subsidiaries for inquiries about network connection;
- Clarifies the network connection procedure;
- Contains links to the capital investment programs of FGC UES and the Company’s subsidiaries.
Improving the Regulatory and Legal Framework of Network Connection
The Company is engaged in coordinating network connection operations conducted by its subsidiaries and takes part in improving the regulatory and legal framework of this process.
The fundamental documents that govern connection to electric grids of grid organizations are as follows:
- Federal Law No. 35-FZ of March 26, 2003, “On the Electric Power Industry.”
- Resolution of the Government of the Russian Federation No. 759 of September 24, 2010, “On the Improvement of the Procedure for Electricity Network Connection” amending Resolution of the Government of the Russian Federation No. 861 of December 27, 2004, “On the Approval of the Rules of Nondiscriminatory Access to Electricity Transmission Services and the Provision Thereof, the Rules of Nondiscriminatory Access to Operational Dispatching Control Services in the Electricity Industry and the Provision Thereof, the Rules of Nondiscriminatory Access to Services of the Administrator of Trading System of the Wholesale Market and the Provision Thereof, and the Rules of Network Connection of Power-Receiving Equipment of Electricity Consumers, Power Generation Facilities, and Electric Grid Facilities Owned by Grid Organizations and Other Persons to Networks.”
- Resolution of the Government of the Russian Federation No. 1178 of December 29, 2011, “On Pricing in the Area of Regulated Prices (Tariffs) in the Electric Power Industry.”
- Resolution of the Government of the Russian Federation No. 24 of January 21, 2004, “On the Approval of the Standards of Disclosure by Wholesale and Retail Electricity Market Entities.”
Efforts to improve the regulatory and legal framework of network connection (including with respect to the applicants qualifying for network connection on preferential terms) are in accordance with Ordinance of the Government of the Russian Federation No. 754-r of May 6, 2012, “On the Approval of the Plan to Prepare Legal Regulations Aimed at Enhancing the Affordability of the Power Infrastructure” and Ordinance of the Government of the Russian Federation No. 1144-r of June 30, 2012, “On the Approval of the Action Plan (Road Map) ‘Enhancing the Affordability of the Power Infrastructure.’”
The Road Map “Enhancing the Affordability of the Power Infrastructure” was developed by the Agency for Strategic Initiatives with the participation of experts, including the Company employees. Experts of the Company took an active part in formulating proposals that underlay the Road Map. The goal of the initiative is to provide applicants with easier conditions of connection to the power infrastructure in Russia. According to the proposals, the network connection procedure should be easier, faster, more transparent, and less expensive.
When implemented, the initiative will make it possible to improve Russia’s investment climate and, consequently, raise the inflow of capital into the country and living standards.
The World Bank’s Doing Business annual rankings are chosen as benchmarks to assess progress in implementing the initiative. The target of these efforts is to achieve the inclusion of Russia in the top 20 countries according to the rankings.
The legal regulations approved in 2012 in order to carry out the measures specified in the Road Map are as follows:
- Resolution of the Government of the Russian Federation No. 445 of September 4, 2012: the notification procedure for informing retail companies of the required network connection.
- Resolution of the Government of the Russian Federation No. 1015 of October 5, 2012: the provision of payment in three-year installments for customers consuming electricity (capacity) in the range of 15 to 150 kW under network connection contracts.
- Resolution of the Government of the Russian Federation No. 1209 of November 22, 2012: the approval of the model network connection contract for redistributed capacity.
- Resolution of the Government of the Russian Federation No. 1354 of December 20, 2012: the notification procedure for issuing operation permits to the customer’s facilities rated 670 kW or below and 10 kV or below.
- Order of the Ministry of Energy of the Russian Federation No. 465 of September 28, 2012 “On Amendments to the Guidelines for Calculating the Level of Reliability” (registered with the Ministry of Justice of the Russian Federation under No. 26139 on December 14, 2012): the improvement of service quality standards related to network connection.
Network Connection Tariffs
The connection fee amount is determined by executive authorities of constituent entities of the Russian Federation in charge of government regulation of tariffs in accordance with the Guidelines approved by the Federal Tariff Service’s Order No. 209-e/1 of September 11, 2012.
Payment under network connection contracts is made on a one-shot basis, and it can be agreed that payment is made for separate network connection operations.
The connection fee for power-receiving equipment rated 15 kW or below (including any power-receiving equipment previously connected to a given connection point) is not in excess of 550 rubles, provided that the distance between the requesting entity’s site boundary to electric grid facilities having the voltage class necessary for the requesting entity and operated by the grid organization receiving the request is not in excess of 300 meters in urban areas and urban-type settlements or 500 meters in rural areas.
Applicants whose maximum capacity ranges between 15 and 150 kW qualify for payment in installments on an interest-free basis in the amount of 95% of the connection fee for a period of up to three years.
If power-receiving equipment of individual customers and power generation facilities are connected to electric grid facilities with a voltage of 35 kV or above and/or maximum capacity of 8,900 kW or above, then the connection fee is calculated on an individual basis for each network connection.
Subparagraph 4 of paragraph 2 of Article 23.2 of Federal Law No. 35-FZ of March 26, 2003, “On the Electric Power Industry” specifies that, effective from January 1, 2011, the network connection fee may not include the investment component for paying any expenses associated with the development of the existing infrastructure, including links between territorial grid organizations’ facilities and the Unified National (All-Russian) Electric Grid’s facilities, other than expenses related to the construction of electric grid facilities—from existing electric grid facilities to connected power-receiving equipment and/or electricity industry facilities.
When amendments to subparagraph 4 of paragraph 2 of Article 23.2 of Federal Law No. 35-FZ of March 26, 2003, “On the Electric Power Industry” became effective, the average network connection fee rate decreased by 47% and 37% in 2012 compared with 2010 and 2009 respectively. It is forecasted that the average network connection fee rate in 2013 will fall by 62% and 55% compared with 2011 and 2009 respectively.
|Fee Rate Type
|Number of Subsidiaries’ Branches
|Fee Rate, rubles/kW
|Standardized Fee Rate, “rubles/kilometer”
|Fee Rate, rubles/kW +
|Individual Tariff, rubles/connection
STRUCTURE OF FEE RATES CHARGED BY THE COMPANY’S SUBSIDIARIES AS OF DECEMBER 31, 2012Скачать в XLS
MRSK HOLDING’S AVERAGE FEE RATE, RUBLES/KWСкачать в XLS
Monitoring of Network Connections
In 2012, the Company received 414,849 network connection requests for total capacity of 27,457 MW and entered into 333,675 network connection contracts for total capacity of 11,875 MW. The number of actually signed network connection certificates was 210,237 for total capacity of 6,098 MW.
The share of completed connections in total demand for capacity in 2012 is 22% in physical terms (MW) and 51% in quantitative terms (the number of connections). The share of signed network connection contracts in total demand for capacity is 43% in physical terms (MW) and 80% in quantitative terms (the number of connections).
In 2012, the Company’s subsidiaries received 414,849 network connection requests, totaling 27,457 MW. The number of submitted network connection requests for the 12 months of 2012 increased by 25% on the 12 months of 2011, while the capacity covered by network connection requests for the 12 months of 2012 grew by 30% as compared with the 12 months of 2011.
The Company’s subsidiaries signed 333,675 network connection contracts for the 12 months of 2012, totaling 11,875 MW. The number of signed network connection contracts and the capacity covered by these contracts for the 12 months of 2012 increased by 22% and 36% respectively on the 12 months of 2011.
The number of actually signed network connection certificates was 210,237, totaling 6,098 MW. The number of completed network connection contracts for the 12 months of 2012 grew by 25% against the 12 months of 2011. The rise in capacity (MW) reached 33%.
THE COMPANY’S CHANGES IN THE NUMBER OF SUBMITTED NETWORK CONNECTION REQUESTS AND SIGNED NETWORK CONNECTION CERTIFICATES FOR 2010–2012 (PCS.)Скачать в XLS
THE COMPANY’S CHANGES IN THE TOTAL CAPACITY COVERED BY SUBMITTED NETWORK CONNECTION REQUESTS AND SIGNED NETWORK CONNECTION CERTIFICATES FOR 2010–2012 (MW)Скачать в XLS
For the 12 months of 2012, the Company’s subsidiaries received 72 network connection requests, totaling 4,355 MW; entered into 31 network connection contracts, totaling 1,755 MW; and actually signed 24 network connection certificates, totaling 1,313 MW.
The Company’s subsidiaries in 2012 completed work on network connection for several large power generation facilities constructed under Ordinance of the Government of the Russian Federation No. 1334-r of August 11, 2010, “On the Approval of the List of Generation Facilities Used for the Supply of Capacity Under Capacity Supply Contracts”:
- IDGC of Volga: 225-MW CCGT, Syzran CHPP, Volga TGK.
- IDGC of North-West: 110-MW CCGT, Vologda CHPP, TGK-2.
- Kubanenergo: 180-MW CCGT, Adler TPP, OGK-2.
Revenues from Network Connection Services
In 2012, with the planned target of 35,933 million rubles, exclusive of VAT, the Holding Group’s actual revenues from network connection services totaled 37,604 million rubles, exclusive of VAT, or 105% of the plan.