Regional Network Company

On the initiative of the Sverdlov oblast government, the heads of the municipal institutions and ZAO ’Integrated Energy Systems” a “Regional Network Company” (OAO “RNC”) was founded at the end of 2002. ZAO “Municipal Institutions Power Company“ (“MIPC”) is entrusted with company management functions according to the founder’s resolution.

To date, “RNC” has made agreements for power supply with 11 out of 15 municipal institutions of Sverdlov oblast, namely:

Bogdanovish, Asbest, Kamens-Uralski, Krasnoturinsk, Severouralsk, Serov, Sukhoi Log, Rezh, Revza, Pervouralsk, Polevskoi.

Objectives and Aims of RNC’s activities

The established company will deal with:

• Transfer and distribution of electric power;
• Sale of electric power;
• Provision of attendant services.

RNC was founded to improve the safety and quality of power supply to customers, to focus on the operations of Sverdlov oblast electric power infrastructure function and to prepare the communal power industry electric network infrastructure to function and develop in a market mechanism.

Activities Result in 2003 and plans for 2004

According to the results of 2003 the volume of net electric output through OJSC RNC networks constituted 770 million kWh. By the end of 2004 the volume of net output should increase to 1,5 billion kWh and to 2 billion kWh by the end of 2005.

Output volume increase is expected at the expense of purchasing and lease of new power distributing networks in Sverdlov oblast.

The main consumers of RNC are the local population, state enterprises, small industrial and non-industrial enterprises and also housing and communal services.

The share of the market of “RNC” on power supply in Sverdlov oblast including Ekaterinburg is about 30 %.

Investments in 2004.

A total volume of the investments in 2004 will be about 10 million dollars. The main trends of company investment are the purchasing of new power economies, modernisation of networks and power equipment and construction of new power lines.

Large-scale investments are planned for reconstruction and modernisation of the power economy of Kamensk-Uralsk and Rezh. Modernisation of the city heating system is planned for 2004 in Polevskoi.