Business model

Competitive environment

JSC Lenenergo is the major grid company in the territory of St. Petersburg and the Leningrad Region transmitting electric power and capacity from generation companies to end users.

Services in electric power transmission are provided to the guaranteeing suppliers, independent power trade companies and direct consumers –participants of the wholesale market of electric power. Electric power arrives in JSC Lenenergo network from JSC FGC UES branch of – MEN of the Northwest and generation companies.

34 sales companies, including four guaranteeing suppliers, operate on the territory of St. Petersburg and the Leningrad Region. For execution of obligations on electric power transmission to consumers of the region JSC Lenenergo uses the services of third-party grid organizations. At present JSC Lenenergo has signed contracts on electric power transmission with 51 third-party grid organizations.

Competitive environment

Today there are three levels of grid companies in Russia which were created on technological and administrative-territorial signs:

JSC Lenenergo is a regional distribution grid company, operating on the second level of the power system. JSC Lenenergo conducts its activities in the territory of two subjects of the Russian Federation with separate tariff regulation – St. Petersburg and the Leningrad Region. Tariffs for electric power transmission are set in the territory of each subject of the Russian Federation.

At present the competition between the grid companies of the region is practically absent. The competition between grid companies is possible, if some grid organization in the region owns networks of the same voltage level, and consumers can select a provider of services.

Regional and territorial network organizations own networks of 0.4–10 kV. At regional level there is a competition between JSC Lenenergo and territorial network organizations.

About 19 territorial network organizations in St. Petersburg and 31 organizations in the Leningrad Region conduct their activities in electric power transmission besides JSC Lenenergo.

Along with JSC Lenenergo, activities for connection of consumers in St. Petersburg and Leningrad Region are performed by JSC St. Petersburg Electrical Networks, MEN of Northwest – a branch of JSC FGC UES, JSC Leningrad Territorial Management Power Grid Company (JSC LOESK), and a number of third-party grid organizations which areas of responsibility are fixed by Resolutions of the Governments of appropriate subjects of the Russian Federation.

Market share of the Company

The share of electric power transmission of JSC Lenenergo in the total electricity consumption by own consumers of power trade companies conducting their activity in the territory of St. Petersburg and the Leningrad Region, taking into account the consumers who have been directly connected to power installations of generation companies, for the last three years amounted to:

Market share, %

Decrease in the share of JSC Lenenergo in the market of transmission services is caused by leaving of some consumers connected under “last mile”, formation of new territorial network organizations on the basis of large enterprises (industrial sites), transferring their own power network facilities in the use of the network organization and thus reducing own costs of maintenance of power equipment.