The Company’s transition to RAB regulation has created economic incentive for power industry companies to reduce operating costs. In 2011, the Company developed and implemented a program to improve economic efficiency and reduce controllable operating costs. After implementing the measures of this program, the Company achieved a 3.5% reduction in costs in 2011 compared to 2010. The Company intends to continuing devoting priority attention to a reduction in controllable costs and improving operational efficiency by reducing total controllable costs by 10% of the 2010 level over the next three years.
The intensification of infrastructure development in the Moscow area dictates the need for the rapid development of the power grid and the implementation of a large-scale investment program. In this regard, the Company devotes considerable attention to improving the efficiency of investment activities. The main tasks within this objective are the development of long-term investment programs based on the future development patterns of Moscow area power grids, the inclusion of the most efficient projects in the investment plans, the introduction of modern project management technologies for capital construction and a reduction in per-unit construction cost indicators.