In 2012 72% of the total investment volumes were directed to the technical re-equipment and reconstruction of the network complex in order to reduce wear-out percentage of primary equipment and execute the works on the consumers' technological connection. 25% of the total investment volumes were directed to the new construction and expansion and about 3% to acquisition of fixed assets.

In accordance with the investment program of JSC IDGC of the North-West the following major projects were implemented in 2012:

Within the framework of technical re-equipment and reconstruction:

Vologdaenergo branch

In September 2012 Vologdaenergo branch put into operation after reconstruction SS 110/10 kV Susolovka in the Veliky Ustyug district of the Vologda Region.

In the course of the project implementation at the substation the old power transformer was replaced by the new one of TMN-2500/110 type, works for replacement of the existing telemechanics equipment were carried out and new current transformers 110 kV, relay cabinet and metering cabinets were installed.

The investment project for reconstruction of substation 110/10 kV Susolovka is referred to the category of socially important projects and was implemented to ensure operation in the 2012-2013 fall-winter period. The substation supplies the village in which such facilities as high school, kindergarten, post office, boiler-house and housing and public utilities are located. The project implementation enables further development of infrastructure of the Veliky Ustyug district and ensures reliable and high-quality power supply to consumers.

New fixed assets amounted to RUB15.2 million. In physical terms 2.5 MVA of transformer capacity were commissioned.

In December 2012 Vologdaenergo branch put into operation SS 35/10 kV Kornilovo after its reconstruction.

The potential responsibility zone of substation 35/10 kV Kornilovo for energy supply to consumers covers 11 municipalities, in which 268 settlements are located, with the total population of 9,167. The substation supplies about 50 socially important institutions.

The reconstruction will allow to decrease the capacity deficit, to increase substantially the reliability and quality of power supply to socially important and industrial consumers of the energy unit of the Ust-Kubinsky district and to provide an opportunity for technological connection of consumers.

The reconstructed SS operates on the basis of complex distribution module equipment (CDME) 35 and 10 kV. In the course of reconstruction the old power transformers were replaced with the new ones having capacity of 10 MVA each. Relay protection, automatics, telemechanis and communication devices were replaced as well. A new dead-end support of OL-35 kV Sokol-Kornilovo at SS 220/110/35/10 kV Sokol was installed.

New fixed assets amounted to RUB 104.8 million. In physical terms 20 MVA of transformer capacity and 0.333 km of OL 35 kV were commissioned.

In December implementation of the investment project for reconstruction of substation 35/10 kV Domozerovo located in the Cherepovets district of the Vologda Region was completed.

In the course of reconstruction at the substation two new power transformers TMN-6300/35 of 6.3 MVA each were installed and vacuum switches SIЕMENS 35 kV were assembled in transformer cells of 35 kV.

The reconstruction was carried out based on forecasts of rapid growth of energy consumption in the Zasheksninskaya part of Cherepovets town, in particular, in the area of planned construction of a bridge across the Sheksna river, which is located in the electric power supply zone of SS Domozerovo. Upon agreement with the Administration of Capital Construction of the Mayor's Office of Cherepovets Vologdaenergo branch will provide a temporary supply to the construction site of the Bridge Crossover across the Sheksna river in the section of Arkhangelskaya street, after which it will transfer the facility, which is strategically important for the development of the town infrastructure, onto the permanent energy supply.

The commissioning of Domozerovo substation provided for reliable and high-quality power supply to consumers and strategically important facilities of the town of Cherepovets and the Cherepovets district. Moreover, the project implementation provided an opportunity for the construction of low-rise houses within the radius of 20 km from the SS located in the ecologically clean area.

New fixed assets amounted to RUB 16.9 million. In physical terms 12.6 MVA of transformer capacity were commissioned.

Karelenergo branch

Karelenergo branch completed the reconstruction of power transmission line L-83p Pudozh-Kubovo. The overhead line with voltage of 35 kV stretches from SS-36 Pudozh to SS-32 Kubovo and supplies with electric power about one-third of the population of the area, including 24 villages, in particular such large settlements as Kolovo, Krivtsy, Kubovo, Vodla.

L-83p with the length of over 40 km is a dead-end line so every failure on this line resulted in interruption of energy supply to these villages. The reconstruction of the line took several years and was carried out in four stages. Almost all works were carried out using the company's own resources. All wooden supports were replaced with concrete ones and cable of a larger cross-section was installed. The reconstruction will allow to increase the reliability of the line, to reduce loss and to supply villages with voltage of better quality.

In the course of reconstruction a vacuum switch to 85p line was installed at substation Kubovo.

New fixed assets amounted to RUB 44.4 in 2012. In physical terms 18.47 km of lines were commissioned.

The reconstruction of OL-110 kV L-163 SS-56 Pyaozero — SS-58 Kestenga, with replacement of supports and cables, was completed. The line was constructed in 1976, 49% of supports were dangerously rotted; moreover, the line is a dead-end line for substations SS-59 Sofporog and SS-56 Pyaozero. As a result of the reconstruction of L-163 SS-56 Pyaozero — SS-58 Kestenga, the quality and reliability of electric power supply to consumers increased and the probability of emergency shutdown of electric equipment decreased, which resulted in the reduction of undersupply of electric power and decrease of repair expenses.

New fixed assets amounted to RUB 40.5 million. In physical terms 27.64 km of lines were commissioned.

Komienergo branch

In December 2012 a stage of work on the project "Technical Re-equipment of SS 110/10 Zapadnaya" for replacement of two power transformers with capacity of 25 MVA to transformers with capacity of 40 MVA was completed. The project was included in the investment program due to the increase in the Syktyvkar loads.

In the course of the reconstruction the following works were performed:

• reconstruction of foundations for power transformers with replacement of foundation slabs and installation of unhardened oil receiving bowls;
• replacement of 25 MVA power transformers with 40 MVA transformers (type of new transformers: TRDN-40000/110/10-UHL1);
• reconstruction of metal-clad switchgear К-2-10-20 10 kV by installation of 4 inlet, 2 sectional and 2 outlet switches;
• concrete modular PTS 2х400/10/0,4 kV with two transformers TMG-400/10/0.4 kV was assembled;
• two cable lines 10 kV from SS Zapadnaya to TS 10/0.4 kV No. 189 with the total length of 0.065 km;
• automated security and fire alarm system was installed in the premises of SS 110/10 kV Zapadnaya;
• video surveillance system was installed in the territory of SS 110/10 kV Zapadnaya.

The project implementation allowed to increase electric power supply due to technological connection of new facilities and the reliability of energy supply to consumers connected to SS Zapadnaya.

New fixed assets amounted to RUB 62.9 million. In physical terms 80.8 MVA of transformer capacity were commissioned.

In the 4th quarter works under investment project "Modification of the Main Scheme of SS 35/6 kV Vorkutinskaya with Replacement of Equipment and Transformers of 4х5.6 MVA with those of 2х16 MVA" were completed.

In the course of the reconstruction the following works were performed:

• replacement of oil power transformers of TM-5600/35/6 kV type (4 units) with dry transformers of DTTHR-16000/35/6 kV type (2);
• replacement of cells of 6 kV with concrete partitions (3) and oil switches of VMG-133-II type with KS-10 cells with vacuum switches of VBM-10-20(31,5)/630-1600 UHL2 type with 6 kV overvoltage suppressor packages, with current transformers and zero-sequence transformers;
• replacement of oil switches of VM-35-630 type (5 units) with vacuum switches of VBPS-35IISH-25/630 UHL1 (2) with current transformers of TOL-35 type, with disconnecting switches of RGP-35 and 35 kV overvoltage suppressor packages.

This project implementation allowed to increase the reliability of energy supply to consumers of I category, to reduce technical loss and expenses relating to operation and repair of equipment and to increase the level of electric security.

New fixed assets amounted to RUB 83.8 million.

Pskovenergo branch

In June 2012 Pskovenergo branch completed the reconstruction of distribution point (DP) in Velikiye Luki (DS-1) in the neighborhood of the locomotive and repair plant.

The distribution point was constructed in the middle of the ХХ century and supplies houses and multi-apartment buildings of the neighborhood constructed for employees of the locomotive and repair plant (population is about 7,000 people) as well as local school, kindergarten and sales points.

In the renewed DP-1, CL-6 kV with generator switchgear of CHP and the line from old DP were redirected and the capacity transmitted over the cable lines increased from 1.3 to 4 MVA. For the first time in Pskovenergo, relay protection and automatic devices of Scientific and Production Enterprise EKRA were applied for protection of 6 kV connections.

New fixed assets amounted to RUB 75.5 million. In physical terms 0.61 km of lines were commissioned.

In the 4th quarter 2012 the reconstruction of substation 110/35/10 kV SS-284 Novorzhev was completed. As a result of the reconstruction of separators-short circuiting switches 110 kV Т-1, Т-2 were replaced with SF6-type switches 110 kV.

Substation SS-284 Novorzhev was constructed and put into operation in accordance with the project in 1968. Fixed assets are 90% worn. The old scheme considerably reduced the reliability of functioning of substation with respect to ODD-110/35/10 kV.

In order to implement this project, the following technical principles of equipment were applied:

• increased reliability, security and simplicity of the structure;
• minimum necessity in maintenance;
• high mechanical and commutation resource;
• high level of explosion and fire safety.

As a result of the project implementation the quality of energy supply to consumers increased ensuring prevention of future loss (possible undersupply of electric power, fines, expenses on rescue and recovery operations).

New fixed assets amounted to RUB 21.040 million.

Within the framework of new construction:

Arkhenergo branch

In December 2012 Arkhenergo branch completed the construction of OL 0.4-10 kV for electric energy supply to Ust-Vaenga village of the Vynogradovsky district of the Arkhangelsk Region.

The construction of new OL 10-0.4 kV was carried out upon agreement with the Administration of the Arkhangelsk Region under the program of restoration of out-of-service electric grids.

The project implementation was necessary due to the 100% wear and tear of the existing grids.

This project implementation increased the reliability of energy supply to consumers and security of the population and employees of the operating company from electric shock, provided an opportunity to connect new loads to consumer networks which may bring income from electric energy sales.

New fixed assets amounted to RUB 77.134 million. In physical terms 1.703 MVA of transformer capacity (12 PTS) and 33.322 km of transmission lines (13.459 km — OL-10 kV; 19.863 km — OL-0.4 kV) were commissioned.

Karelenergo branch

In order to supply electric power to electric plants of the Kizhi conservation area, to increase the reliability and quality of energy supply to consumers in the Kizhi and Big Klimenetsky Islands and to enforce Decree No. 1633-r of the Government of the Russian Federation of November 7, 2008 to ensure supply of electric energy to consumers of the Kizhi conservation area and closely located villages connected in the future and to increase the capacity of electric grids supplying the Kizhi Island, Karelenergo branch performed works under the two investment projects:

• Reconstruction of the scheme of external electric supply of the Kizhi Necklace. Construction of OL-35 kV SS-78 Velikaya Guba — SS 35/10 Zharnikovo (technological connection of the Kizhi conservation area to the electric grid facilities of JSC IDGC of the North-West). The new OL-35 kV constructed using cable SIP-3 1х95 from SS-78 Velikaya Guba to SS-35/10 kV constructed in Zharnikovo village.

  New fixed assets amounted to RUB 82.0 million, the line length reached 32.09 km.

• Reconstruction of the external power supply scheme of the Kizhi Necklace. Construction of SS 35/10 kV Zharnikovo (technological connection of the Kizhi conservation area to the electric grid facilities of JSC IDGC of the North-West). Works on installation of two power transformers of 6.3 MVA each, assembly of DD-35 and 10 kV in modular buildings, construction of Shared Control Points (SCP), SS fencing, assembly of relay protection and automatic means, automated information and measuring system of commercial energy metering, communication and telemechanic means, security and fire alarm, and video surveillance systems were completed.

  New fixed assets amounted to RUB 73.712 million, the line length reached 0.16 km (12.6 MVA).

In 2012 the branches of JSC IDGC of the North-West commenced works on the following major investment projects:

Vologdaenergo branch

Reconstruction of SS 110 kV Zapadnaya, reconstruction period: from 2012 to 2014. Design specifications and estimates have been approved and favorable opinions of the State Expertise Committee have been obtained for all 3 launching sites. 1 launching site "Construction of ODD with closed distribution devices (CDD) 35/10/6 kV" is implemented. The contractor, LLC Peterburgenergostroy, has carried out removal of cables and disassembly of equipment, constructed foundation and the ground floor of the building. Walls are laid in silex brick, floor structure, slabs and monolith are carried out. For the launching sites 2 and 3 projects decisions made are adjusted in order to reduce the cost of reconstruction. The design specifications and estimates have been referred for approval.

Reconstruction of SS 110 kV NPS, reconstruction period: from 2012 to 2014. Design specifications and estimates have been approved and a favorable opinion of the State Expertise Committee has been obtained. The contractor is JSC Vologda Mechanized Column-19. Works for construction of foundation for ODD with CDD 10 kV, emergency oil drain with oil container and water supply system have been completed. Walls laying, floor structure construction have been completed, window frames, doors, roof installed, power transformer assembled, ODD equipment 110 kV partially installed. Works for building of ODD with CDD and monolith floor structure sections are performed. ODD foundations have been built, modular integrated transformer substation (MITS) 110 kV assembled, intra-site roads partially constructed. The cable bridge is under construction and assembly of equipment on ODD 110 kV is in progress.

Reconstruction of SS 110 SS 110 kV Roslyatino, was planned to be commissioned in 2012 but due to delays in supply of materials by the contractor was postponed to June 2013.

The contractor is LLC Vologdaenergomontazh. Design specifications and estimates have been approved and a favorable opinion of the State Expertise Committee has been obtained. Vertical planning and grounding grid are each 90% completed. The support of OL 110 kV and UB-35-110 has been assembled and installed. The fencing has been assembled. The modular SCP building has been set on the foundation, foundations for package distribution device (PDD) 110kV units assembled, MITS 110 kV, reception portals 110 kV, access road, modular PTS 10 kV assembled. Equipment for SCP, modular metal-clad switchgear 10 kV, units of SF6 insulated switchgear 110 kV are assembled.

Reconstruction of OL 110 kV Sheksninskaya 1.2 with taps to SS 110 kV Iskra, SS 110 kV Zayagorba, SS 110 kV Nifantovo and Sheksninskaya HEP, reconstruction period: from 2012 to 2018. Design and exploration works are performed, project designer: CJSC MK-Energostroyproekt. The contractor has developed design specifications and estimates for the 1st stage of reconstruction (100%). The route has been preliminary developed and exploration works for the 2nd stage of the reconstruction are 90% completed. Works for land allocation, approval of the route plan by the owners are performed; working documents for the 2nd stage are 80% ready.

Construction of SS 110 kV Yuzhnaya with overhangs to OL 110 kV in Cherepovets, construction period: from 2012 to 2014. Design and exploration works are performed, designer: LLC Vologdaselenergoproekt. Design documents for SS have been referred for review in full; working documents for OL 110,35,10 kV have also been issued, works for approval of land allocation for OL are performed. Lease agreements have been made for land plots for designing and construction of OL 110 kV Yug 1, 2, OL 35 kV Irdomatka and Domozerovo, OL 10 kV Matinga in the territory of Cherepovets. Favorable opinions of the State Expertise Committee have been obtained for all launching sites.

Reconstruction SS 110 kV Tarnoga, reconstruction period: from 2012 to 2014. Design specifications and estimates have been developed, require partial adjustment. The designer, LLC TransKolenergo, is now performing works for adjustment of design specifications and estimates and obtaining an opinion of the State Expertise Committee. The contractor, LLC Vologdaenergomontazh, is performing works for construction of the building of ODD with CDD, reconstruction of OL 110 and 35 kV.

Pskovenergo branch

Reconstruction of SS 35/10 kV No. 39 Lekhovo (replacement of T-1 and installation of T-2 with capacity of 2x4MVA, replacement of separators-short circuiting switch 35 kV with vacuum switch on T-1 input, installation of vacuum switches of input T-2, sectional, creation of 2 sections of busbars 10 kV, reconstruction of 1section of busbar 10 kV).

The key goal of the project implementation is the connection of three production sites for hog fattening of LLC Velikiye Luki Pig-Breeding Complex, located at: Pskov Region, Nevel district, Volchyi Gory village and Frolovo village, with maximum requested capacity 2,080 kW. Implementation of this investment project envisages works for replacement of power transformers of SS No. 39 with increase of capacity from 1x1.6 MVA to 2x4 MVA. The following works have been completed: construction works on CDD 35 kV and CDD 10 kV, works for assembly of oil receiving devices for power transformers. Transformers for own needs and a searchlight tower with lightning discharger have been installed. Power cables were laid out from power transformers and ТСН to CDD-10kV. Assembly of cable channels on ODD and fencing works are carried out. The key equipment, with the exception of power transformers, was supplied.

The total cost of design and exploration works carried out in 2012 for the purpose of performance of construction and reconstruction of facilities in 2013 and further years in JSC IDGC of the North-West amounted to RUB 200.5 million, exclusive of VAT.

Capital Investment Structure

Despite the fact that compared to 2011 the share of investments directed to technical re-equipment and reconstruction in the total volume of the Investment Program decreased by 3% (72% in 2012 compared to 75% in 2011), in absolute terms the volume of investments in 2012 grew by 27% and amounted to RUB 4,892.1 million. The growth of the volume of investments directed to technical re-equipment and reconstruction of the grid complex was due to the necessity to decrease the level of wear and tear of the fixed assets and to perform of works for technological connection of consumers.

In 2012 the volume of investments in R&D in JSC IDGC of the North-West amounted to RUB 7.98 million.