Address: 26/55, Bldg. 7, Kosmodamianskaya Emb., Moscow, 115035
(495) 953-91-08, 617-18-88.



Legal Analysis of Court Practice Related to Compensation of Electric Power Losses in Grids of Grid Operators

Konstantin Vladimirovich Korepanov, Master of Law of the Russian School of Private Law (RSPL), Postgraduate Student of the Energy Law Department of Kutafin Moscow State Law University (MSAL)

In this article, the author makes a legal analysis of court practice related to compensation of electric power losses in grids of grid operators.

Pursuant to cl. 50 and 51 of the Rules of Non-Discriminatory Access to Electric Power Transmission Services and Rendering Thereof approved by Resolution of the Government of the Russian Federation dd. December 27, 2004 No. 861[1], grid operators shall pay the cost of actual losses of electric power arising in power grid facilities they own, net of the cost of losses included in electric power prices (tariffs). In this respect, the amount of actual losses of electric power in power grids shall be determined as a difference between the volume of electric power supplied to the power grid from other grids or from producers of electric power and the volume of electric power consumed by power receivers connected to this grid and transmitted to other grid operators.

Cl. 128 of the Fundamental Provisions of Operation of Retail Electric Power Markets approved by Resolution of the Government of the Russian Federation dd. May 4, 2012 No. 442[2] also established the rule on grid operators’ duty to pay for actual losses of electric power arising in their grids. It is implicit in the rules of arrangement of electric power metering in retail markets established in Section X of the Fundamental Provisions that grid operators shall have meters on grid borders and make calculations according to their readings. If there are no meters, it is allowable to use calculation methods stipulated by Fundamental Provisions No. 442 (cl. 136, 139, 140, 142, 144 and 145).

Pursuant to Article 13 of Federal Law dd. November 23, 2009 No. 261-ФЗ “On Energy Saving and Enhancement of Energy Efficiency and on Amending Certain Acts of the Russian Federation”[3], produced, transmitted and consumed energy sources are subject to compulsory metering with the use of meters. Settlements for energy sources shall be based on data on quantities of energy sources determined with meters of involved energy sources. Before meters are installed, the law allows for application of calculation methods determining the quantity of energy sources established in accordance with the legislation of the Russian Federation.

The Judicial Assembly on Economic Disputes of the Supreme Court of the Russian Federation, in its Ruling dd. October 15, 2014 No. 308-ЭС14-91[4], included determination of the following facts in the ultimate fact of cases involving recovery of non-payments for electric power actually lost in power grids during its transmission:

- ownership of power grid facilities and limits of balance sheet attribution of grids;

- the fact of electric power overflow through power grids;

- ways to record volumes of electric power at the power grid’s inlet and outlet;

- the amount (quantity) of electric power transferred to the grid;

- the amount (quantity) of electric power released from the grid (the total value of net supply volume delivered to consumers and volume transmitted to adjacent power grids);

- difference between the two above amounts making the amount of losses;

- non-payments calculated as a difference between the cost of lost electric power and the amount of actual payment therefor.

The Judicial Assembly on Economic Disputes of the Supreme Court of the Russian Federation stressed the need to outline these facts and other proofs supporting the court’s conclusions related to these facts in its statement of reasons (P. 4, Art. 170 of the Arbitration Procedure Code of the Russian Federation).

Pursuant to P. 5, Art. 71 of the Arbitration Procedure Code of the Russian Federation, no proof shall have any pre-established effect for the arbitration court. Meanwhile, according to the legal opinion of the Judicial Assembly on Economic Disputes of the Supreme Court of the Russian Federation stated in the reviewed Ruling, priority as to manner of proving facts associated with determining the volume of energy sources shall be given to quantification of energy sources (including the amount of losses in power grids) according to meters.

Remitting the case for a new proceeding, the Judicial Assembly of the Supreme Court of the Russian Federation concluded that, in violation of the provision of the electric power legislation obliging to meter energy sources with meters and Art. 71 of the Arbitration Procedure Code of the Russian Federation, lower courts did not accept the data provided by a responding grid operator, read from meters and recorded in monthly reports on electric power balance overflows between grids of the grid operator and an enterprise, which received electric power from a provider (claimant) through the grid operator’s grids. Lower courts also did not mention in judicial acts any reasons in support of their refusal to accept the grid operator’s proofs.

A special attention should be given to the use of prejudice as a way to prove the amount of losses. For example, before a dispute regarding the claim of a sales organization against the grid operator was examined, there were examinations of the sales organization’s claims for compensation of losses in the enterprise’s grids against an enterprise, which received electric power from the sales organization through a grid operator’s grids[5].

In one such case[6], the grid operator was engaged as a third party. The ultimate fact in this case was similar to the subject of the case on the sales organization’s claim for compensation of losses against the grid operator: to calculate the volume of losses, it was necessary to determine the volume of electric power transferred to the enterprise’s grid. Grids of the enterprise and the grid operator were adjacent, which means that the volume of grid-to-grid overflow shall be equal for both cases (the volume at the inlet of the enterprise’s grid shall be equal to the volume at the outlet of the grid operator’s grid). Thereunder, the Judicial Assembly of the Supreme Court of the Russian Federation qualified the facts established in this case as prejudicial for the parties to the dispute between the sales organization and the grid operator by virtue of Art. 69 of the Arbitration Procedure Code of the Russian Federation.

Dismissing the grid operator’s argument that judicial proceedings are limited by the claimant’s requirements, which results in the grid operator’s inability to influence the courts’ conclusions on this case, the Judicial Assembly of the Supreme Court of the Russian Federation assumed that in reaching its decision the court indeed acts within the claims stated by the claimant, however the actual facts in the case shall be established by the court regardless of the amount claimed.

The grid operator did not take part in the second case[7] between the sales organization and the enterprise, and the third case[8] was settled amicably. The Judicial Assembly of the Supreme Court of the Russian Federation disagreed with conclusions of lower courts: the facts established in these cases could not constitute the basis for judgments related to the grid operator. The facts of the second case prove that the grid operator is not a party to the case and could not furnish proofs to support the facts associated with the volume of electric power overflow in the enterprise’s grid. In the third case[9], the court established no facts at all: in cases settled amicably the parties are allowed to make a compromise with no judicial assessment of proofs and establishment of facts in the case.

In addition, it should be noted that there is another mechanism for compensation of losses by an energy provider. For example, cl. 189-190 of the Fundamental Provisions of Operation of Retail Electric Power Markets established a mechanism, whereunder a grid operator acquires electric power from a guarantee supplier to compensate electric power losses in own grids. In this respect, the grid operator provides, prior to the 10th day of the month following the settlement period, to the relevant guarantee supplier the information, in a manner allowing to confirm its receipt, on the volume of consumed electric power, the scope of services rendered in transmission of electric power, the volume of off-the-meter consumption of electric power and the volume of electric power (capacity) subject to purchase by the grid operator for compensation of actual losses of electric power for this settlement period.

If the grid operator acquiring electric power to compensate losses from the guarantee supplier did not provide the said information, that guarantee supplier shall determine actual losses at power grid facilities of such a grid operator in accordance with cl. 190 of the Fundamental Provisions.

In turn, cl. 190 of the Provisions stipulates that, if the guarantee supplier received no data on actual losses at power grid facilities of one or more grid operators acquiring from it electric power (capacity) to compensate losses, it shall distribute among such grid operators the volume of electric power calculated as a difference between the total volume of electric power acquired by such a guarantee supplier (such a retail electricity supplier, power provider) and the volume of electric power supplied by such a guarantee supplier (such a retail electricity supplier, power provider) to consumers in the retail market and to grid operators, which provided the information on actual losses of electric power at power grid facilities they own, in proportion to the share of normative losses of electric power at power grid facilities of such grid operators in the overall normative losses of electric power at power grid facilities of all grid operators, which acquire electric power (capacity) to compensate losses from such a guarantee supplier (such a retail electricity supplier, power provider) and failed to provide the information on actual losses of electric power at power grid facilities they own.



[1] Resolution of the Government of the Russian Federation dd. December 27, 2004 No. 861 “On Approving the Rules of Non-Discriminatory Access to Electric Power Transmission Services and Rendering Thereof, Rules of Non-Discriminatory Access to Supervisory Control Services in the Electric Power Industry and Rendering Thereof, Rules of Non-Discriminatory Access to Services of the Wholesale Market Trade System Administrator and Rendering Thereof and Rules of Technological Connection of Power Receivers of Electric Power Consumers, Electric Power Generating Facilities and Power Grid Facilities Belonging to Grid Operators and Other Bodies to Power Grids” // Collection of Legislative Acts of the Russian Federation, 2004, No. 52 (P. II), Art. 5525 (in Russian).

[2] Resolution of the Government of the Russian Federation dd. May 4, 2012 No. 442 “On Operation of Retail Electric Power Markets, Full and (or) Partial Restrictions of Electric Power Consumption” // Collection of Legislative Acts of the Russian Federation, 2012, No. 23, Art. 3008 (in Russian).

[3] Federal Law dd. November 23, 2009 No. 261-ФЗ “On Energy Saving and Enhancement of Energy Efficiency and on Amending Certain Legislative Acts of the Russian Federation” // Rossiyskaya Gazeta, November 27, 2009 (in Russian).

[4] See: Ruling of the Judicial Assembly on Economic Disputes of the Supreme Court of the Russian Federation dd. October 15, 2014 No. 308-ЭС14-91. The document wasn't published. URL: http://www.arbitr.ru (in Russian).

[5] For more details, see: case No. A53-29535/2012; case A53-37158/2012; case A53-16600/2013. URL: http://ras.arbitr.ru/

[6] For more details, see: case No. A53-29535/2012. URL: http://ras.arbitr.ru/

[7] For more details, see: case No. A53-37158/2012. URL: http://ras.arbitr.ru/

[8] For more details, see: case No. A53-16600/2013. URL: http://ras.arbitr.ru/

[9] See: case No. A53-16600/2013. URL: http://ras.arbitr.ru/