It was General Director of IDGC of the North-West Sergey Titov that answered the analysts’ questions.

Jointly with Renaissance Capital, IDGC of the North-west, JSC arranged a telephone conference dedicated to reconsideration of long-term regulation parameters the Company financial forecasts. It was General Director of IDGC of the North-West Sergey Titov that answered the analysts’ questions.

Currently, 4 out of 7 branches of IDGC of the North-West (Vologdaenergo, Novgorodenergo, Pskovenergo, Karelenergo) are regulated by the RAB method while the others (Arkhenergo, Komienergo, Kolenergo) – by that of long-term indexation. Following the outcome of the long-term regulation parameters reconsideration, the regulator has confirmed the amount of invested capital with Novgorodenergo branch, having reduced it to a certain extent with Vologdaenergo and Pskovenergo branches In connection with the new legislative requirements, the OPEX efficiency index has been increased from 1% to 3% with Pskovenergo branch and has remained unchanged with all the other branches. The Federal Tariff Service of Russia has agreed to Karelenergo branch of IDGC of the North-West from the long-term indexation method to RAB regulation. In the long term, the investment program of Karelenergo branch of IDGC of the North-West (funding less VAT and technological connection) will increase 2.3 times, from 455 mln RUR in 2012 to 1,053 bln RUR in 2017. At least a quarter of the investment program funding is to be ensured through attraction of funds (credit resources). The long-term parameters of the branches regulated by the long-term indexation method have not undergone essential changes.

"The Arkhangelsk and Murmansk Regions support IDGC of the North-West branches in their migration to RAB. In the Murmansk Region it is the only way to solve the urgent problems of the electric power grid complex. The Komi Republic remains the only region where complete understanding has not been reached yet," Sergey Titov said.

In 2012 the investment program of IDGC of the North-West is planned to amount to 6,674 mln RUR, less VAT. One intends to commission 1,175.49 km of transmission lines and 416.37 MVA of transformer capacities.

2012–2017 investment program volume has made 41,924 mln RUR, less VAT. The corrected long-term investment program has been configured with allowance for tariff regulation having been switched over to RAB within all the constituent entities of the Russian Federation included in the territory being serviced. The fixed assets estimated wear has reduced by 1.7% as compared to the expected 2012 value (58.8%), to be 57.1% by the end of 2017.

The "last mile" topic was also recurrently touched upon in the course of the conference. "The "last mile" practice abandonment is for IDGC of the North-West a hard step to take, especially with regard to Karelia. The problem as yet defies immediate solution, involving systemic long-term work," Sergey Titov believes. The list of "pilot regions" has been determined at the Russian federal government level with the north-western regions represented by the Komi Republic. Variants are being elaborated to compensate for shortfall in income in connection with the "last mile" practice elimination in the Komi Republic for 2013. In Karelia, a working group for the issue solution has been created. The issue was specifically discussed in the Vologda Region in the course of the meeting between the IDGC of the North-West management and the region Governor.

The conference was participated in by 36 companies including representatives of banks Goldman Sachs, JP Morgan, Morgan Stanley, BKS, VTB Capital, Renaissance Capital, Uralsib.