Strategic goals and priorities of the Company
Being part of the unified distribution grid complex of Russia, the Company seeks to achieve the objectives defined at the state level, i. e. milestones for electric grid complex till 2030, set by the Development Strategy of the Electric Grid Complex of the Russian Federation *.
In order to perform the above milestones as well as ensure effective activity and development, the Company sets the following strategic goals:
- Increase of electric power supply reliability of Krasnodar Krai and the Republic of Adygea;
- Improvement of the quality of customer service and increase of the accessibility of power grid infrastructure;
- Advanced grid development and implementation of new technologies;
- Increase of investment appeal and capitalization;
- Proper working conditions, increase of professional competence and loyalty of the Company personnel.
The Board of Directors approved certain areas of Company activities as priority ones. In order to achieve the strategic goals, the Company sets specific objectives and implements Company development in the priority areas:
1. Innovative development:
The purpose of the innovative development of the Company is a transition to electric grids of a new technological mode with qualitatively new characteristics of reliability, efficiency, accessibility, manageability and customer centricity of the power grid complex. The Innovative Development Program sets target levels of the development of innovative trends and determines the status of assets implemented as part of the investment program as innovative ones.
The development of the updated Innovative Development Program for 2016–2020 with an outlook until 2025 has been started.
2. Ensuring the established reliability and quality level of the rendered services in accordance with regulatory legal acts
Increase of reliability and quality of energy supply to the level corresponding to customer needs.
Reduction in undersupply of electricity.
Cost reduction of technological connection for small and medium-sized businesses.
3. Introduction of the Company’ Production Assets Management System (hereinafter referred to as the PAMS)
The purpose of the introduction of the Company Production Assets Management System (PAMS) is: improvement of quality of planning maintenance and repair works, productivity improvement, reduction of labor input in maintenance and repair processes by optimizing information technology solutions.
4. Ensuring availability of the energy infrastructure and quality of technological connection to the Company electric grids.
Efficiency improvement of production and investment activities.
Organization of work on development, approval and implementation of technological connection procedure of electrical installations of legal entities and individuals to the electric grid of Kubanenergo PJSC in accordance with the existing regulatory framework with account of a balance of interests of the grid company and customers of technological connection service.
5. Development planning of the distributive power grid complex of Kubanenergo PJSC
The purpose of development planning of the distributive power grid complex of Kubanenergo PJSC is to ensure development of the grid infrastructure and generating capacities in order to meet long-term and medium-term demand for electric power and capacity, create stable and favorable conditions for attraction of investments in the construction of electric power facilities and creation of an effective and balanced energy infrastructure ensuring social and economic development of Krasnodar Krai and the Republic of Adygea.
By efforts of project organizations, Kubanenergo PJSC annually performs development of Comprehensive Programs of Development of Electric Grids of 35 kV and above in the territory of the Krasnodar Krai and the Republic of Adygea for a five-year period.
6. Implementation of environmental policy
The purpose of the implementation of environmental policy is to ensure the introduction of energy-efficient technologies and the improvement of technological processes, which contribute to reduction of harmful effect, as well as to ensure consistent performance of environmental activities. The implementation of the priority area is an operating activity and shall be performed constantly.
7. Increase of anti-terrorist and anti-sabotage protection level of the Company electric grid facilities.
Improvement of the safety system (including but not limited to the automated safety management system) based on the principles of geographical distribution, security, reliability and efficiency of the Company security management system, the wholeness of integration and business processes.
8. Measures aimed at the decrease in electricity losses using extra tariff funding sources (including energy service agreements)
Efficiency improvement of the power grid complex through the implementation of measures aimed at reducing technological electric power losses in the process of its transmission taking into account measures on the terms of energy service agreements.
Since 12/10/2013 the Company Board of Directors have been regularly considering and approving the lists of relevant projects of the Company in the field of energy conservation and improvement of energy efficiency that are feasible on the terms of the concluded energy service agreements.
9. Measures aimed at centralization and automation of the treasury function
Updating of reporting forms and reference books “1C: Enterprise” used during preparation of templates for uploading information into automated information system of registration of treasury operations in order to organize information exchange with the unified IT system of Unified Treasury of PJSC ROSSETI.
10. Improvement of internal control and risk management system, development of internal audit function.
The purpose of implementation of internal control and risk management system, development of internal audit function is to improve business processes of the Company. The assessment of the revealed risks is regularly updated, measures aimed at their management are implemented, information on the functioning of the risk management system, on the performance of the Company risk management activities is considered by the Company management bodies.
The Plan of Measures Aimed at Development and Improvement of Internal Control and Risk Management Systems of Kubanenergo PJSC for 2016–2018 has been approved and is being implemented.
Efficiency of the Internal Control and Risk Management Systems is assessed. The results of the assessment are submitted to the Board of Directors (with preliminary consideration by the Audit Committee of the Board of Directors).
11. The Company strategy in the sphere of information technology, automation and telecommunications for the period up to 2016.
The main role of information technologies is to implement the key business objectives of the Company, such as ensuring reliable and uninterrupted electric power supply, improving customer service quality, ensuring customer satisfaction. Process automation development ensures more efficient functioning of the power grid complex.
The Company introduces new projects, develops existing ones and maintains already completed projects in terms of information technologies in accordance with the Strategy in the field of information technology and telecommunications of the Company approved by Decision of the Board of Directors of Kubanenergo PJSC on 6/20/2013 (Minutes No. 138/2012 of 6/22/2012). The implementation of the priority area is an operating activity. In case of economic feasibility, additional investments in the informatization and automation of business processes should be made.
12. Construction and operation of fiber-optic communication lines (FOCL)
Design and construction of FOCL are performed within the framework of the implementation of the Company investment program titles. The Company area of activity of “Construction and operation of fiber-optic communication lines” has lost its relevance as the Company separate priority area of activity.
Corporate network of data transfer as well as dispatch and technological communication channels in the direction of a dispatch center of Teuchezhsky PGA of Krasnodar Electric Grids branch of the Company are organized using these FOCL in accordance with modern requirements.
13. Consolidation of electric grid assets
The purpose of the consolidation of electric grid assets is the increase of necessary gross proceeds in the customer basin of PJSC Kubanenergo and reduction of the number of territorial grid companies.
The objective is the acquisition of grid assets non-influenceable by the Company and the provision of efficient use of power grid property transferred to the possession, released on loan or by other means of the consolidation of power grid property.
The Company is interested in creation of the unified center of responsibility for high-quality and reliable energy supply to customers, elimination of “fragmentarity” of the grid in Krasnodar Krai and the Republic of Adygea.
The main difficulties of the implementation of the Electric Grid Assets Consolidation Program are failure to achieve a consent of facility owners to participate in consolidation and lack of a source for measure funding.
14. Certification of equipment, materials and systems at the Company facilities
In order to organize the work on certification of equipment, materials and systems, in 2014 the Company issued the order that:
• brought into force the procedure and the methods of carrying out certification of equipment, materials and systems in the power grid complex,
• appointed a commission on admission of the Company equipment, materials and systems and approved its work regulations.
No applications for carrying out certification were submitted to the commission in 2016. In view of application of the unified technical policy in PJSC ROSSETI Group of Companies, certification of equipment, materials and systems used in the electric grid complex of Kubanenergo PJSC was carried out directly by PJSC ROSSETI.
15. Introduction of the major investment project construction management system
Availability of the specialized information project management system on the basis of Oracle Primavera (IPMS) ensured the complete implementation and management of the implementation of the Program of Olympic venues construction and development of Sochi as a mountain climate resort on reconstruction and construction of facilities of the distribution grid ensuring reliable power supply for Sochi during the 2014 Winter Olympic Games and the developing infrastructure of the city as a mountain climate resort. The area lost its relevance due to the completion of the Olympic construction in 2014. The information project management system on the basis of Oracle Primavera (IPMS) is not being used at the moment, because all its objectives have been accomplished.
16. Work in the area of labor protection
The purpose of work in the area of labor protection is to increase energy supply safety, including decrease in a total number of accidents, as well as unaccounted accidents.
The Company considers the preservation of life and health of its employees as a priority in relation to any other results of labor activity and, to this end, constantly takes measures to ensure safe working conditions in workplaces and to prevent occupational injuries and injuries of third parties at the Company facilities.
17. Decrease in specific investment costs by 30% against the level of 2012
The purpose of the priority is to improve efficiency of the electric grid complex, including: decrease in specific investment costs by 30% against the level of 2012.
The plan for reduction of investment costs in 2016 amounted RUB 327 mln, excluding VAT (22.5 %). Following the results of 2016, the actual reduction of investment costs amounted to RUB 381 mln, excluding VAT that is equal to 32%.
Decrease in operating expenses by 15% by 2017 taking into account inflation against the level of 2012 per maintenance unit of electrical equipment.
18. Decrease in operating expenses (costs) for at least 2–3% annually
The purpose of the priority is to improve efficiency of the electric grid complex, including: decrease in operating expenses by 2019 per 1 conventional unit 15% as compared to 2012.
The target levels of the decrease in operating expenses were approved by the Board of Directors of the Company.
In order to decrease expenses, from 2016 onwards the Company has been implementing the Operational Efficiency Increase and Expense Reduction Program for 2016–2020 on the achievement of benefit due to the maintenance cost reduction per unit of the Company electrical equipment.
19. Capacity utilization increase
The purpose of the priority is to improve efficiency of the electric grid complex, including capacity utilization increase.
A natural growth of the electrical power system capacity consumed for 2016 amounted to 5.4%, besides, connection of new customers leads to additional increase in total capacity utilization of power stations of Kubanenergo PJSC.
In general, investments in Kubanenergo PJSC promote reliability enhancement, industry performance improvement, and decrease in electric power losses.
Alongside with that, the growth of investments leads to higher prices of electric grid services if the exploited capacities remain unloaded. In this regard, the purpose of the electric grid complex regulation is to ensure high load of re-exploited capacities.
Implementation of the priority areas of activities shall allow Kubanenergo PJSC to become one of the leaders of the industry thanks to high efficiency of asset management, customer-oriented approach as well as the implementation of energy-efficient technologies and the improvement of technological processes.
Report on the Company development on priority areas of activity in 2016 is provided in Appendix 5.
* Approved by Executive Order of the Government of the Russian Federation No. 511-p of April 3, 2013.