News date: 13 October 2022
The team of the Dispute Resolution Practice of Ilyashev & Partners Law Firm managed to protect the interests of Resursekoenergo LLC, a producer of electrical energy from renewable sources, in recognizing as unlawful the decision of the National Commission for State Regulation in the Spheres of Energy and Utilities (NERC).
The dispute was provoked by the approval by the NERC of a new version of the formula, according to which electricity producers under the “green” tariff were unlawfully obliged to compensate SE Guaranteed Buyer for losses incurred due to its inability to sell the electricity purchased from them.
It took the courts almost two years to consider the case on recognizing the amendments approved by NERC Resolution No. 46 dated 15 January 2021 as unlawful and invalid.
The District Administrative Court of Kyiv recognized that the updated formula was in fact the introduction of additional financial liability for the producers under the “green” tariff, and made them responsible for the trading activities of SE Guaranteed Buyer in the electricity market.
The court concluded that NERC acted beyond its powers and without resorting to the method determined by the Constitution and laws of Ukraine. According to the first-instance court, electricity producers cannot be responsible for the trading activities of a state-owned company and are not obliged to reimburse a share of the cost of coordination of an electricity imbalance. Electricity producers should be liable to the state within the limits of the expenses actually incurred by them related to the settlement of electricity imbalances that the guaranteed buyer experienced because of the deviation of the actual hourly volumes of electricity supply from the predicted hourly schedules.
In October 2021, the Sixth Administrative Court of Appeal reversed the court decision of the first-instance court and issued a new decision by which it dismissed the claim of the electricity producer. However, on 8 September 2022, the Administrative Court of Cassation within the Supreme Court approved the decision of the first-instance court and confirmed the unlawfulness of the appealed decision of the NERC.
“The NERC formula completely contradicted the guarantees stipulated by the laws and the generally accepted principles of the functioning of the electricity market, and unlawfully imposed an additional financial burden on electricity producers”, – commented Mikhail Ilyashev, the Managing Partner of Ilyashev & Partners Law Firm, on the results of the consideration of the case – “Due to the efforts of our team, the rights of all alternative electricity producers have been restored”.
Advisers of Ilyashev & Partners Valeriіa Gudiy and Oleh Trokhymchuk were involved into the project under the supervision of the Managing Partner Mikhail Ilyashev.