1.2

Market share

The Company operates as a natural monopoly with state-regulated tariffs for energy transmission and connection in the Perm, Sverdlovsk and Chelyabinsk regions. There is also a bunch of municipal and private grid operators in our service area rendering transmission services, mainly, through electric low-voltage networks.

At the turn of the year there are approximately 206 regional grid companies operating in the service area.

The market share of the Company and RGOs in the service area (in terms of gross revenue requirement*)

2013
2014
2015
* - GRR data does not include loss compensation in line with the decree on uniform (boiler) transmission tariffs adopted by the Russian regional regulators.

Since each region of the service area has its own specificity (consumer structure, individual aspects of economic growth, etc.), the market share of our branches differs.

Permenergo’s market share

Permenergo’s market share in terms of GRR totals 85%, the rest 15% owned by RGOs. In 2015 the branch has lowered its share in total GRR YoY, impacted by 2015 boost of GRR of several regional grid operators, such as: KS-Prikamye (OAO), Service Center Kontakt (OOO), SetEnergoTrans (OOO), Center of Reliability (OOO), KraiEnergoSet (OOO) and Parma Engineering (OOO NPF).

Sverdlovenergo’s market share

Sverdlovenergo’s market share in the Sverdlovsk region in terms of GRR totals 67% or 77% jointly with our subsidiary – EESK (OAO). Our GRR market share as of the turn of the year reduced 3%, since the decree of Regional Energy Commission of the Sverdlovsk region, dated as of 24.12.2014, skyrocketed GRR of Oblkommunenergo (PAO) and Tagilenergoseti (ZAO).

Chelyabinsk region

Situation on the energy market of the Chelyabinsk region is complicated due to the existing combined boiler scheme. Services, rendered by regional grid operators, are paid for by Chelyabenergo branch and AES Invest (OOO). It is exactly the boost of GRR of several competing regional grid operators (AES Invest and Gorelektroset), that has minified the market share of the branch 2% in 2015.