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LAW OF UKRAINE

of October 24, 2013 No. 663-VII

About bases of functioning of the market of electrical energy of Ukraine

(as amended on 23-05-2017)

This Law determines legal, economic and organizational basis of activities of the market of electrical energy of Ukraine and governs the relations arising in the course of its functioning.

Section I General provisions

Article 1. Determination of terms In this Law the stated below terms are used in such value:

the administrator of commercial accounting of electrical energy (the administrator of commercial accounting) - subject of the market of electrical energy which provides the organization and administration of commercial accounting of electrical energy in the market of electrical energy and also performs functions of the central aggregation of data of commercial accounting in the market of electrical energy;

the administrator of calculations - subject of the market of electrical energy which provides the organization of work of the market of electrical energy and carrying out calculations in the balancing market and the market of support services;

accreditation of the service provider of commercial accounting (accreditation) - the documentary evidence the administrator of commercial accounting of competence and competence of appropriate subject of managing to provide services of commercial accounting in the market of electrical energy according to the procedure established by the code of commercial accounting;

algorithm of distribution of means - procedure for distribution by authorized bank of funds from current accounts with the special mode of use without payment orders which is set by the national commission performing state regulation in spheres of power and utilities according to this Law;

the balancing group - the consolidation of the parties responsible for balance created according to this Law within which one party is included into such consolidation bears responsibility for not balance of the electric power of all parties entering such consolidation;

the balancing group of producers on "green" rate - the balancing group in which the party responsible for balance, the guaranteed buyer is;

the balancing market of electrical energy (the balancing market) - the market organized by the system operator for the purpose of balancing of production volumes (leave) and import of electrical energy and consumption and export of the electric power, settlement of system restrictions in the integrated power system of Ukraine, and also financial settlement of not balances of electrical energy;

vertically integrated economic organization - subject of managing which together with persons, the control relations related directly or indirectly, performs transfer or distribution and, at least, one of functions on production or delivery of electrical energy;

the electric power producer (producer) - the subject of managing who owns or uses the generating capacities on legal causes makes electrical energy for the purpose of its sale in the market of electrical energy, and/or provides additional services according to requirements of this Law;

free handling capacity - available handling capacity less the size of handling capacity and handling capacity distributed at auctions in which according to the law priority access is provided. When calculating daily free handling capacity the unused size of the handling capacity distributed at the previous auctions is considered;

the guaranteed buyer of the electric power on "green" rate (the guaranteed buyer) - subject of managing which according to this Law buys electrical energy from producers to which the "green" rate is established;

the guaranteed supplier of electrical energy (the guaranteed electrosupplier) - the electrosupplier who performs deliveries of electrical energy only in the fixed territory and shall sign the delivery agreement of electrical energy with any consumer of electrical energy who addressed it and who is located in the territory of implementation of its licensed activities for delivery of electrical energy;

limiting indicators - indicators which are determined in conditions and rules of implementation of economic activity on production of electrical energy, and also the size of installed capacity of power plant or amount of annual leave by it electrical energy in the integrated power system of Ukraine in case of which exceeding sale of electrical energy shall be performed in the market of bilateral agreements and/or in the market "for the days ahead" and the balancing market;

the bilateral agreement of purchase and sale of electrical energy (bilateral agreement) - the agreement under which purchase and sale of electrical energy in the market of the bilateral agreements between two subjects of managing having the right to perform purchase and sale of electrical energy in this market is performed;

the purchase and sale agreement of electrical energy in the market "for the days ahead" (the agreement in the market "for the days ahead") - simultaneous acceptance by the bidder "for the days ahead" and the operator of the market of the rights and obligations on purchase and sale of products of the electric power by results of carrying out the corresponding biddings "for the days ahead";

support services - the services determined by this Law and rules of the market which the system operator buys from suppliers of support services for ensuring steady and reliable work of the integrated power system of Ukraine and quality of electrical energy according to the established standards;

access to handling capacity of interstate power networks - the right of the electrosupplier to receipt of service in transfer of electrical energy interstate power networks for the purpose of export and/or import of the electrical energy acquired according to this Law;

available handling capacity - the size of the maximum capacity of electrical energy which can be transferred on power system of one country to power system of other country in the corresponding direction on condition of secured provision of safety and reliability of functioning of the integrated power system of Ukraine;

the electrotransferring company - the subject of managing, performing activities for transfer of electrical energy according to the license;

the electrosupplier - the guaranteed and/or independent electric power supplier who acts according to the license;

the electrodistribution company - the subject of managing performing activities for distribution of electrical energy according to the license;

the skilled consumer of electrical energy (the skilled consumer) - the consumer of electrical energy who can freely choose the electrosupplier and directly signs the agreement with him on amount of own consumption of electrical energy, taking into account provisions of Item 3 of the Section VI of this Law;

clearing in the market of electrical energy - system of clearing settlements through the authorized bank considering mutual financial requirements and obligations of subjects of the market for transactions with electrical energy (electric power products) and the services provided in the market of electrical energy and which come to the end with payment on difference between the amounts of requirements and obligations of subjects of the market, including at the expense of the provided financial guarantees;

the code of power networks - the code of the requirements and rules regulating relations of the system operator electrogiving the companies, the electrodistribution companies, producers, electrosuppliers and consumers of electrical energy for planning, development and operation of the integrated power system of Ukraine and access to power networks;

the code of commercial accounting of electrical energy (the code of commercial accounting) - the code of requirements and rules concerning implementation of commercial accounting of electrical energy and rendering services of commercial accounting of electrical energy in the market of electrical energy;

commercial accounting of electrical energy - set of processes and procedures for ensuring forming of data concerning amounts of the released, transferred, distributed, consumed, imported and exported electric power in certain period for the purpose of use such dismissed for implementation between subjects of the market of electrical energy;

not balance of the electric power - difference between the actual amounts of leave or consumption, either export, or import of electrical energy of the party responsible for balance, and the accepted system operator (the administrator of calculations), contractual purchasing amounts and/or sale or export or import of electrical energy, determined according to rules of the market;

the independent electrosupplier - the electrosupplier who performs electrical supplies to the skilled consumer on the conditions determined by results of arrangements with the consumer or uses her for own needs;

the operator of the market - the operator of the market "for the days ahead" which provides the organization of purchase and sale of electrical energy the next days in the corresponding market according to the obtained license;

the residential customer of the electric power (residential customer) - the physical person using electrical energy for providing own domestic needs which are not including professional and business activity based on the agreement on delivery of electrical energy with electrosuppliers;

services of commercial accounting of electrical energy (service of commercial accounting) - the services/works on ensuring commercial accounting of electrical energy determined by this Law in the market of electrical energy;

the supplier of support services - the producer, the electrosupplier and/or the skilled consumer of electrical energy who corresponds to statutory rules of the market and requirements concerning provision of support services which is registered according to rules of the market for provision of such services, and other persons determined by this Law;

the service provider of commercial accounting - business entity which provides services of commercial accounting in the market of electrical energy according to requirements of this Law;

deliveries of electrical energy - economic activity of electrosuppliers in the retail market on providing consumers with electrical energy in accordance with the terms of the signed delivery agreement of electrical energy;

current accounts with the special mode of use - accounts of electrosuppliers, the system operator electrogiving the companies, the operator of the market, the guaranteed buyer, Fund the settlements of cost imbalance and electric power producers at nuclear power plants and hydroelectric power stations (except micro, mini-and small hydroelectric power stations) opened in authorized bank and intended for ensuring carrying out calculations according to this Law;

rules of electricity market (rule of the market) - the regulatory legal act which establishes legal, organizational and economic basis of functioning of the market of electrical energy and governs the relations between subjects of this market;

rules of the market "for the days ahead" - the regulatory legal act which establishes legal, organizational and economic basis of functioning of the market "for the days ahead" and governs the relations between the operator of the market and participants of this market;

the product on electricity market "for the days ahead" (electric power product) - the unified hourly amount of electrical energy which is on sale (is bought) during trading "for the days ahead" according to rules of the market "for the days ahead";

the market of bilateral agreements of purchase and sale of electrical energy (the market of bilateral agreements) - system of the relations between participants of the market on purchase and sale of electrical energy according to the bilateral agreements according to requirements of this Law out of the market "for the days ahead" balancing with the market and the retail market of electrical energy;

the market of support services - system of the relations arising in connection with acquisition of support services by the system operator at suppliers of support services;

the market of electrical energy (the market of electrical energy of Ukraine) - system of the relations arising between subjects of the market when implementing purchase and sale of electrical energy and/or support services, transfer and distribution of electrical energy power networks, delivery of electrical energy to consumers;

electricity market "for the days ahead" (market "for the days ahead") - system of the relations between participants of the market "for the days ahead" and the operator of the market on purchase and sale of electrical energy (electric power products) for the days following behind day of tendering;

the retail market of electrical energy - system of the relations arising between the electrosupplier and the consumer of electrical energy and also the electrodistribution companies in the course of delivery of electrical energy;

system restrictions - the circumstances caused by need of ensuring functioning of the integrated power system of Ukraine within maximum permissible values in case of which the variation from optimum load distribution of the generating capacities, according to their contractual amounts of leave of electrical energy and/or optimum load distribution of the generating capacities according to offers (requests) in the balancing market is possible;

the system operator - the subject of the market of electrical energy performing centralized dispatching (operational and technology) management of the integrated power system of Ukraine according to the license for maintenance of balance in the integrated power system of Ukraine and ensuring parallel work with power systems of other states;

the consumer of electrical energy - the subject of managing or the physical person using electrical energy for own needs based on the agreement on delivery of electrical energy with the electrosupplier or on other bases provided by this Law;

the party responsible for balance, - the participant of the market who undertook obligations, and in case of consolidation in the balancing group - including other parties responsible for balance, on leave and/or consumption and/or export and/or import of electrical energy in the amounts accepted by the system operator (the administrator of calculations) in the hourly daily schedule of leave and/or consumption, either export, or import of electrical energy and on settlement of not balances of electrical energy;

the subject of the market of electrical energy (the subject of the market) - the producer, the electrosupplier, the electrotransferring company, the electrodistribution companies, the operator of the market and the guaranteed buyer who in the procedure established by this Law got access to the market of electrical energy, the system operator, the administrator of calculations, the administrator of commercial accounting, the service provider of commercial accounting, Fund of settlement of cost imbalance, and also the consumer of electrical energy;

the biddings by electrical energy in the market "for the days ahead" (the biddings "for the days ahead") - process of determination of amounts and the price (prices) of electrical energy (electric power products) of settlement periods the days following behind day of tendering according to rules of the market "for the days ahead";

the authorized bank of the market of electrical energy (authorized bank) - the bank institution determined by the Cabinet of Ministers of Ukraine together with the National Bank of Ukraine which services current accounts with the special mode of use and on a contract basis performs functions of the administrator of Fund of settlement of cost imbalance;

the participant of the market of electrical energy (the participant of the market) - subject of the market which got access to the market of electrical energy for the purpose of purchase and sale of electrical energy and/or provision of support services in the market of electrical energy;

the participant of balancing - the participant of the market which conforms to requirements of rules of the market concerning participation in balancing of production volumes (leave) and import, both consumption, and export of the electric power in the integrated power system of Ukraine which is performed in the balancing market and which is registered according to rules of the market for participation in balancing;

the participant of the market "for the days ahead" - the producer, the electrosupplier, the electrotransferring company, the electrodistribution companies and the guaranteed buyer who got access to the market of electrical energy and signed the contribution agreement in the market "for the days ahead";

other terms provided in this Law are applied in the values given in the laws of Ukraine "About power industry" and "About the combined production of heat and electrical energy (cogeneration) and use of waste power potential".

Article 2. Legal basis of functioning of the market of electrical energy

1. The basic principles of functioning of the market of electrical energy are determined by this Law, the laws of Ukraine "About power industry" and "About natural monopolies".

2. The main conditions of activities of subjects of the market of electrical energy and relations between them are regulated:

1) rules of the market which including determine rules of functioning of the balancing market and the rule of functioning of the market of support services;

2) to rules of the market "for the days ahead";

3) code of power networks;

4) code of commercial accounting;

5) other regulatory legal acts.

Rules of the market, the rule of the market "for the days ahead" and the code of commercial accounting affirm the national commission performing state regulation in spheres of power and utilities in coordination with the Antimonopoly Committee of Ukraine. The code of power networks affirms the central executive body providing forming of state policy in electrical power complex in coordination with the national commission performing state regulation in spheres of power and utilities and the Antimonopoly Committee of Ukraine.

The system operator administers rules of the market, the code of commercial accounting and the code of power networks.

The operator of the market administers rules of the market "for the days ahead".

3. Rules of the market determine, in particular, procedure for acquisition, suspension and deprivation of the status of the subject of the market, and also cases in which it can be refused provision of the status of the subject of the market, order of registration of subjects of the market, procedure and requirements to ensuring accomplishment of agreement obligations about purchase and sale of electrical energy for the purpose of settlement of not balances of the electric power, the rule of functioning of the balancing market, the rule of functioning of the market of support services, procedure for carrying out calculations in the balancing market and the market of support services, procedure for drawing of accounts, procedure for modification of rules of the market, provision concerning functioning of the market in case of acceptance of emergency measures.

4. Rules of the market "for the days ahead" determine, in particular, procedure for acquisition, suspension and deprivation of participant status of the market "for the days ahead", and also cases in which to the subject of managing it can be refused participation in the biddings "for the days ahead", procedure and requirements to ensuring accomplishment of agreement obligations in the market "for the days ahead", procedure for the organization and tendering "for the days ahead", procedure for determination of the price (prices) of electrical energy (electric power products), including in cases of non-competitive behavior, the notification procedure of the administrator of calculations about the signed agreements in the market "for the days ahead", procedure for carrying out calculations in the market "for the days ahead", procedure for cost determination of services of the operator of the market and procedure for its payment, procedure for disclosure of information on activities of the operator of the market and its promulgation, procedure for dispute settlement between the operator of the market and participants of the market "for the days ahead", procedure for modification of rules of the market "for the days ahead".

5. The code of power networks determines, in particular, the basic rules of technical operation, planning, operational and technology management and development of power networks (including rules of management of overloads in power networks of the integrated power system of Ukraine), rules of accession of electroinstallations to power networks, standard forms of specifications of accession of electroinstallations to power networks, and also requirements to users of the integrated power system of Ukraine, including the exhaustive list of conditions in case of which to users it can be refused provision of access to power networks.

6. The code of commercial accounting determines basic provisions by the organization of commercial accounting of electrical energy in the market of electrical energy, right and obligation of subjects of the market, service providers of commercial accounting and the administrator of commercial accounting on ensuring commercial accounting of electrical energy, receipt of exact and reliable data of commercial accounting and their aggregation (consolidation), procedure for carrying out accreditation of service providers of commercial accounting and registration of the automated systems of commercial accounting.

7. Requirements about provision, protection, disclosures and promulgation of information in the market of electrical energy are determined by this Law, other laws of Ukraine, to rules of the market, rules of the market "for the days ahead", the code of power networks, the code of commercial accounting, procedure for holding electronic auctions by distribution of handling capacity of interstate power networks.

Requirements about provision, protection, disclosures and promulgation of information by subjects of the market are determined by the national commission performing state regulation in spheres of power and utilities.

8. Subjects of the market have the right to submit proposals on modification of rules of the market, the rule of the market "for the days ahead", the code of power networks, the code of commercial accounting and in other regulatory legal acts regulating functioning and activities of the market of electrical energy of Ukraine in the relevant state bodies and subjects providing administration of rules of the market, rules of the market "for the days ahead", the code of commercial accounting, the code of power networks.

Article 3. Principles of functioning of the market of electrical energy of Ukraine

1. The market of electrical energy functions on the competitive beginnings with restrictions which are set by this Law and the Law of Ukraine "About natural monopolies".

2. Functioning of the market of electrical energy is performed on the principles:

1) energy security of Ukraine;

2) safety of deliveries of electrical energy to consumers, protection of their rights and interests;

3) energy efficiency and environment protection;

4) fair competition;

5) equal rights for sale and purchase of the electric power;

6) free choice of the electrosupplier by the skilled consumer;

7) non-discriminatory and transparent access to main and interstate and/or local (local) power networks;

8) non-discriminatory access to the market of electrical energy;

9) independent state regulation;

10) non-discriminatory pricing;

11) preventions of actions and failure to act of the subjects of the market directed to damnification to other subjects of the market;

12) responsibility of subjects of the market for non-compliance with rules of the market, rules of the market "for the days ahead", the code of power networks, the code of commercial accounting, other regulatory legal acts providing functioning of the market of electrical energy, and conditions of the agreements signed in this market;

13) abilities to integrate with the foreign markets of the electric power.

3. In the cases provided by this Law, compulsory provisions of access to the market of electrical energy for the producers, electrosuppliers electroreporting and the electrodistribution companies, the guaranteed buyer, and also the operator of the market obtaining by appropriate subject of managing of the license for implementation of certain type of economic activity in power industry and signings of the contribution agreement by it in the market of electrical energy with the system operator is.

The contribution agreement in the market of electrical energy is public.

The system operator has no right of surrender in agreement signature about participation in the market of electrical energy if the company correctly satisfied all conditions of rules of the market on access to the market of electrical energy.

Subjects of managing which satisfied conditions of access to the market of electrical energy acquire the status of the subject of the market of electrical energy and are entered by the administrator of calculations in the corresponding register according to the procedure, determined by rules of the market.

Subjects of the market shall provide compliance to requirements of implementation of commercial accounting, provision of information, providing financial guarantees in the market of electrical energy according to requirements of rules of the market, rules of the market "for the days ahead" and the code of commercial accounting.

4. Activities of subjects of the market are subject to environmental impact assessment in the cases established by the legislation.

Article 4. Bases of functioning of the market of electrical energy of Ukraine

1. In Ukraine functions the single electricity market in which:

1) electricity sale (Ukraine released by power plants and also imported) and its purchase is performed (including for export);

2) transfer and distribution of electrical energy are performed by power networks;

3) reliable functioning of the integrated power system of Ukraine, maintenance of balance between the demand and supply of electrical energy is ensured;

4) commercial accounting of electrical energy is provided, and calculations between subjects of the market for electrical energy and services are carried out.

2. The market of electrical energy of Ukraine includes the following components:

1) market of bilateral agreements;

2) market "for the days ahead";

3) the balancing market;

4) market of support services;

5) retail market of electrical energy.

3. Purchase and sale of electrical energy in the market of electrical energy is performed in the market of bilateral agreements, the market "for the days ahead", the balancing market and the retail market.

In the market of bilateral agreements producers sell the electrical energy released by them, and electrosuppliers, the electrotransferring company, the electrodistribution companies, and also skilled consumers in the cases provided by this Law buy it on the terms of the arrangement of the parties concerning the price, amount, delivery date of electrical energy, etc. based on the signed bilateral agreements. In the market of bilateral agreements the guaranteed buyer performs purchase of the electric power on "green" rate of producers which according to the legislation establishes "green" rate.

In the market of bilateral agreements producers and electrosuppliers have the right to perform purchase and sale of electrical energy with sales objective to her other participants of the market.

In the market "for the days ahead" producers, electrosuppliers, the electrotransferring company, the electrodistribution companies and the guaranteed buyer buy/sell electrical energy (electric power products) during the organized biddings "for the days ahead" by the conclusion by their results of the relevant agreements with the operator of the market. The prices and amounts of purchase and sale of electrical energy for the next days are determined according to rules of the market "for the days ahead".

In the balancing market the system operator performs purchase and sale of electrical energy by results of selection provided on the balancing market of offers (requests) on sale/purchase of electrical energy of participants of balancing. The system operator also performs purchase and sale of the not balances of the electric power arising at the parties responsible for balance. Within the balancing group the party responsible for balance of the balancing group, performs purchase and sale of the not balances of the electric power arising at participants of such balancing group.

In the retail market of electrical energy consumers of electrical energy buy electrical energy from electrosuppliers (independent or guaranteed). Skilled consumers of electrical energy at the choice can buy electrical energy from any of independent electrosuppliers or from the guaranteed electrosuppliers.

4. Transfer and distribution of electrical energy is performed by the electrotransferring company and the electrodistribution companies respectively.

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