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April 6, 2019

Pavel Livinskiy has told about the results of Rosseti PJSC in 2018 at the collegium of the Ministry of energy of the Russian Federation

On the first of April there was the extended meeting of the Collegium of Ministry of energy of the Russian Federation on the basis of performance in 2018 and strategies of Ministry of Energy in 2019.

 In his report Head of  Rosseti company group Pavel Livinskiy has noted that in 2018 there was carried out the large-scale work tended for increase of indices of reliability of power supply to consumers, energy efficiency and improvement of economic and fonancial indeces of the power holding. 

The great attention was paid to implementation of the risk-oriented control model, among other things, during preparation and passing the autumn-winter maximum of loads. One of the most important elements of preparation was presented by the large-scale exercises of specialists in energetics which took place in 2018 in 30 regions of the country during which the personnel has worked out at the active power facilities the skills of practical cooperation during elimination of theological violations and has increased its professional qualification and, for reliability growth of power supply, has eliminated major problems in regional power utility systems. 

The key corporative event in 2018 has become the approval by the company`s board of management the conception "Digital transformation 2030". Implementation of pilot projects on digital transformation of the power grid has started up by this time in several regions of Russia and their preliminary results confirm the precision and correctness of performed computations. The phased implementation of shaped plans will allow to improve the quality of provided services and consolidate the financial and economic situation of the Rosseti group. 

Now the particular attention of the management is given to regulatory issues. Government of the Russian Federation sustains the joint initiatives of Rosseti and Ministry of Energy of the Russian Federation with regard to ensuring the long-term tariff regulation, reduction of cross-subsidization volumes and improvement of privileged technological connection as well as introduction of fee for capacity margin. 

In his report Pavel Livinskiy has noted that in 2019 the company provides the measures intended for introduction of amendments to regulatory legal acts. Including as it relates to introduction of fee for capacity margin, application of economically sound rates for technological connection to electricity networks  as well as differentiation of service tariff for power transfer for direct consumers of mains system. Distribution of the cross-subsidization burden on all consumers, including those connected to the Unified Power Grid, legislative recognition of regulatory agreements, and introduction of a “reference” principle of forming tariffs for electricity transmission services are of equal importance. 

“All initiatives, including those related to tariff regulation, will be implemented gradually without effecting an average consumer. Tariffs will not grow. These measures are required for the economic incentive of power grid development. It is important for us to carry out activities that will allow us to increase the Rosseti shares liquidity and dividend yield. Financial indicators improved in 2018, but the company may face challenges already in 2019.  Today, the current limitation of maximum tariff growth lead to increase of the electricity price by 11%, which that will naturally result in the increase of the company's operating expenses. That is why it is important to revise the regulatory approach so that the balance of tariff decisions does not lead to a deterioration in financial results. In 5 years the holding has reduced its operating expenses by a third and lost almost 20% of productive supply in the distribution. Nevertheless, the power grid complex operates efficiently and stably even in these conditions, but its inner economic reserves are exhausted. All legislative initiatives are aimed at creating economic incentives so that to meet set objectives and provide consumers with high-quality electricity without increasing the final tariff growth”, said Pavel Livinskiy. 




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