* OAO "Kuban Energy Retail Company" was spun off from OAO "Kubanenergo" and was registered with the authorities on 1 July 2006.

The Company is engaged in purchase and sale of electricity on the wholesale and retail markets, and supplies electricity to customers in the Krasnodar Kray and the Adygei Republic as a guarantee supplier. The majority of electricity consumers are industrial enterprises, which is explained by the large number of medium- and large energy-intensive industrial operations in the region, such as OAO "Novoroscement", OOO "Novorosmetall", OOO "Kubangazprom", OAO "Rosneft", North-Caucasian Railways of OAO "Russian Railways".

** At its meeting held on 9 February 2007, the Board of Directors of RAO "UES of Russia" approved a resolution to sell through public auctions the Company's shares in 8 energy retail companies (ERCs), including OAO "Kuban Energy Retail Company".

A decision in principle on the divestiture by RAO "UES of Russia" of the ERCs was taken by the Board on 8 December 2006. It is planned that the energy retail companies will be disposed of before RAO UES reorganization in 2008. According to the Board resolution, the principal method to be used for the disposal of ERC will be the sale through a public auction with the start price not lower than the fair market value determined by an independent appraiser.

The ERC sale will significantly increase the number of independent energy retailers employing advanced methods of retailing, expand the range of services and improve the quality of services provided by them owing to the growing market competition among the retailers.