OREANDA-NEWS. July 20, 2011. JSC RusHydro (ticker symbol: RTS, MICEX, LSE: HYDR; OTCQX:RSHYY) RusHydro Group announces that total production for H1 2011 for power plants of JSC RusHydro and its subsidiaries stood at 39,262 mln kWh- a 4% increase over the same period of the previous year.Net output for the reporting period also increased 4% compared to the same period in 2010 and reached 38,550 mln kWh.

The major factor leading to H1 production growth was four of ten hydro-units restoration at the Sayano-Shushenskaya HPP, damaged in the accident in 2009, as well as the rational utilization of water resources at reservoirs of the Group's power plants.

During H1 2011, the hydrological situation in the European part of Russia and in the Russian Far East was characterized by low water levels. Initial forecasts by the Russian Hydro-meteorological Center for high levels of snow accumulation in the main basins of the hydro-power plants were not realized: actual water inflows appeared to be lower than or comparable to the long-run average.

The hydrological situation in Siberia was favorable during the reporting period. Inflows to reservoirs for the Novosibirsk and Sayano-Shushenskaya Power Plants were close to the long- run average. During the reconstruction period, the consumption rate in Sayano-Shushenskaya HPP was determined by Yenisey BWM considering the Interagency Task Force recommendations on Angara-Yenisei cascade reservoirs' work regulation, by the terms of the hydraulic structures safe operation and reservoir drawdown to 05/01/2011 up to the mark of 500 m.  Maintenance work optimization and increase in the intensity of their realization at the Sayano-Shushenskaya HPP during the 2010-2011 autumn-winter period (due to moving repair work to periods of ice limitations and the higher intensity of this work)  enabled the Company to generate an additional 532 mln kWh during H1 2011.

Overall JSC RusHydro HPP production in the Siberian Region in H1 2011 increased by more than twice, compared with the same period in 2010,  and totaled 10,726 mln kWh.

During Q3 2011, inflow to the Novosibirsk Reservoir is expected to be 15-20% lower, than the long-run average, and inflows to the Sayano-Shushenskoye and Zeyskoye Reservoirs are expected to be close to long-run averages.

In the Far East during the reporting period, production by the Group's power plants decreased 9%, compared with the same period in 2010, and amounted to 6,414 mln kWh. The reduction is explained by uneven water flows during the reporting period: high in the beginning of the period and lower in Q2 2011.

In the European part of Russia, the unprecedented heat wave and lower water inflow in Q3 and Q4 2010 resulted in a 23% decrease in water reserves in reservoirs at the beginning of the reporting period compared to average levels.

Water inflow from January-March was lower than in previous years, but was 5% higher than average long-run indicators. In Q2 2011, water inflow was 18% below the long-run average. The Lower-Volga Power Plants have been running at lower-than-average drawdown rates in accordance with instructions from the Russian water resources regulator (to economize hydro-resources). For the first time in recent years, the pre-freshet drawdown was approximately 53.2 cubic kilometers, which is close to the optimal design regime.

As a result of the economy regime during sterile drawdown during the freshet period, the volume of water in reservoirs of the Cascade was 0.5 cubic kilometers higher than the long-run average and 4.1 cubic kilometers higher than last year at the end of the period. The situation has created pre-conditions for sufficient power generation production volume during the remainder of the year.

Due to undertaken measures, with a view to providing for rational water utilization in Q1 2011, production by RusHydro power plants, located in the central regions of the European part of Russia, amounted to 18,704 mln kWh, which is only 10% lower than in H1 2010.

The total water inflow to the Volga-Kama Cascade reservoirs is expected to be 29-37 cubic kilometers in Q3 2011 (the norm is 37 cubic kilometers).

The hydrologic situation in the Northern Caucasus and South of Russia was characterized by the  water inflow low or close the average long-run level. This fact, coupled with an outage at the Irganayskaya HPP, led to a 35% decrease in electricity generation in Northern Caucasus to 3,030 mln kWh.

In Q3 2011, water inflow in reservoirs of the Northern Caucasus and South of Russia is expected to be close to average. At the same time, inflow to the Chirkei HPP is expected to be 20-50% above the long-run average.

In Q1 2011, production at the Sevan-Hrazdan Cascade amounted to 388 mln kWh.