Kubanenergo PJSC Market Power

The primary mission of Kubanenergo PJSC — is to take a profit in the conditions of long-term provision of reliable, high-quality and affordable power supply to consumers in the Krasnodar Territory and the Republic of Adygea by organizing the most efficient management of the distribution network infrastructure on advanced technologies and innovations based on international standards for quality of services and best practice corporate governance.

Kubanenergo PJSC provides a transmission and distribution of electricity to consumers through the electric power networks 110 kV and lower between residential areas, to the rural settlements, separate cities and regional centers of the Krasnodar Territory (including the City of Sochi) and the Republic of Adygea.

The whole service area of Kubanenergo PJSC in Krasnodar Region and the Republic of Adygea has 83.3 thousand square km and a population of more than 6 million people.

The principal purpose of the Company is to provide reliable and stable energy supply to consumers of this region and to meet the growing needs of the regional economy in electricity.

Kubanenergo PJSC is the largest taxpayer, which takes an active part in the social and economic life of the region, ensuring jobs and employment for the supplier plants from related industries, and bringing about various social programs and conducting charity events.

Kubanenergo PJSC is a public Company, which shares were admitted to trading on the Russian stock exchange — Moscow Exchange PJSC.

The Company conducts its main activity in the conditions of a natural monopoly regulated by the state in terms of:

• tariffication for electricity transmission services and payments for technological connection of power receivers of consumers to the electrical network of the Company;
• ensuring the open, non-discriminatory access of consumers to the specified services of the Company on equal terms.

Kubanenergo PJSC — is the largest power grid Company in the Krasnodar Territory and the Republic of Adygea. The Company share in the regional market for electricity transmission services (from the necessary gross revenue of the region) amounted to 75.5% in 2018. The high rates of reconstruction and renewal of power grid facilities of the Company, the same as dynamic growth of technological connection volumes, let to conclude that the Company will retain a dominant position in the regional market for electricity transmission services in the future.

The increase in the share of Kubanenergo PJSC is driven by the growth of the IGR for the maintenance of the electrical networks of Kubanenergo PJSC and the consolidation of power grid assets.

The following companies are among the largest companies carrying out similar activities in the Krasnodar Territory and the Republic of Adygea: JSC Independent Energy Service Company of Krasnodar region — NESK-Electricity Network, JSC Oboronenergo, JSC Russian Railways, JSC Neftegaztekhniya-Energy.