REPUBLIC OF LITHUANIA
LAW ON ELECTRICITY OF THE REPUBLIC OF LITHUANIA
20 July 2000, No VIII-1881
Vilnius
(As last amended on 19 March 2009, No XI – 198)
CHAPTER ONE
GENERAL PROVISIONS
Article 1. Purpose of the Law
1. This Law shall establish the basic principles regulating the generation, transmission, distribution, and supply of electricity in the Republic of Lithuania, the relations between providers of electricity services and their customers as well as the conditions promoting competition in the electricity sector.
2. The provisions of this Law have been harmonised with the legal acts of the European Union listed in the annex to this Law.
Article 2. Definitions
1. Balancing electricity means electricity which is consumed/not consumed by customers or generated/not generated by producers in derogation from the quantities of electricity planned in the schedules drawn up adhering to the Electricity Trading Rules approved by the Government or a body authorised by it.
2. Supplier of balancing electricity means any producer, supplier or eligible customer trading in balancing electricity.
3. Household customer means any natural person purchasing electricity for his own household consumption, excluding commercial or professional activities.
4. Electricity sector means a branch of the national economy related to the generation, transmission, distribution and supply of electricity.
6. Electricity costs means total electricity costs incurred providing electricity transport service through transmission and distribution network that are calculated as the difference between the total amount of electricity received by the transmission system or the distribution system operator and the amount of electricity consumed by other customers or transported to other operators.
7. Electricity system means the totality of electric equipment intended for generation, transmission and distribution of electricity functioning under a mutually agreed regime.
9. Horizontally integrated undertaking means an undertaking engaged in at least one of the following activities: generation, transmission and distribution or supply of electricity and activity of other type not connected with those listed above.
10. Long-term planning means the planning of development of the electricity marketing, generation, transmission and distribution capacity with a view to securing supplies to customers, and of the need for investment in the above sectors for an at least 3-year period.
13. Eligible customer means a customer who is free to choose a supplier in compliance with the procedure laid down in this Law.
14. National balancing function means ensuring balance between electricity generation and consumption according to the criteria of system reliability and quality of supplies at the electricity system level.
15. Independent supplier means a person providing supply services to the eligible customers and possessing an appropriate licence to perform the activity.
16. Normative profit means the service provider’s profit before taxes from the licensed activity secured by the setting of the price cap in order to ensure reliable, safe, qualitative, efficient performance of licensed activity taking account of the needs of network users and to guarantee adequate and right value added (return) for the participants in the persons performing the activities of transmission, distribution and public supply.
17 Transmission means the transport of electricity through the transmission network.
18. Transmission system operator means any legal person managing the transmission network by ownership right or any other right who performs the functions of national balancing and system service provision.
19. Transmission system undertaking means an undertaking responsible for the management of the transmission network by ownership right or any other right.
20. Service of transport means electricity transmission and/or distribution up to the limit fixed in the contract.
21. Regulating energy means electricity purchased and/or sold by order of the transmission system operator’s dispatch centre, which is needed for the performance of the national balancing function.
22. Regulatory period means time period for which the price cap of transmission, distribution, public supply services and/or public electricity is fixed.
23. Regulated third party access means the process whereby producers, suppliers and eligible customers make use of the transmission or distribution networks to transport electricity based on published tariffs.
24. Reserve capacity means electricity generating capacities to be used for regulating the balance of frequency and energy flows on the system and for generating electricity for balance deviations elimination /compensation only in emergency situations.
25. Market participant means a person purchasing and/or selling electricity under contracts and in other manner prescribed by the Electricity Trading Rules.
26. Market operator means any legal person responsible for the organisation and administration of trade in electricity and settlement of payments between the producers, suppliers and the customers.
27. System services means services ensuring a secure and reliable operation of energy system, prevention and liquidation of system failures and disturbances, the required capacity reserve and electricity transmission capability through transmission networks within the limits set for electricity supply quality and reliability.
29. Distribution system undertaking means an undertaking managing distribution network by ownership or any other right.
30. Distribution system operator means a legal person responsible for the management, operation, maintenance and development by ownership or any other right distribution networks in the territory specified in its activities licence with regard to the needs of the distribution network users.
32. Direct line means an electricity transmission line linking the producer and the customer, complementary to the transmission and distribution systems.
33. System user means any person whose equipment is connected to transmission or distribution systems and who uses the service of transport of electricity.
34. Maintenance of the network means actions securing the stability, reliability and quality of network operation.
35. Customer means any person whose equipment is connected to the transmission or distribution systems or direct line and who purchases electricity for consumption.
36. Vertically integrated undertaking means an undertaking performing at least one of the functions of electricity transmission or distribution and at least one of the functions of electricity supply or production or can control the undertakings performing the functions of supply or generation of electricity or can be controlled by them.
37. Public interest in the electricity sector means any act or omission in the electricity sector, directly or indirectly related to the public security, environmental protection, and to electricity generation from renewable energy sources at combined heat and power generation plants.
38. Public service obligations means services provided by electricity undertakings the list, suppliers and supply procedure whereof shall be established by the Government or a body authorised by it with account of public interests in the electricity sector.
39. Public price of electricity means the price at which public supplier sells electricity to customers.
40. Public supplier means a legal person obliged to supply electricity to the customers within the territory specified in the activities licence according to the stages of market liberalisation as provided for in Article 40 of this Law and to the eligible customers who have not chosen the independent supplier
Article 3. Main Objectives of the Law
The main objectives of the Law shall be:
1) establishment of the rights, responsibilities of and mutual relations between the entities in the electricity sector;
2) development of a legal framework for the functioning of competition based electricity market and establishment of fair competition between producers and suppliers;
3) ensuring and promoting efficiency in the production, transmission, distribution and consumption of electricity;
4) ensuring safe and reliable operation of electricity system, electricity generation, transmission and distribution;
5) ensuring public service obligations and establishing reasonable, comprehensive and transparent requirements and obligations in the electricity sector;
6) promotion of the internal electricity market and electricity export, modernisation of technical facilities for implementation of the market, and development of easy-to-understand and transparent energy pricing;
Article 4. Regulatory Bodies of the Activities in the Electricity Sector
Unless otherwise established by laws, the electricity sector shall be regulated and compliance with this Law and the implementing legislation shall be controlled by:
Article 5. Functions of the Government or a Body Authorised by it in the Electricity Sector
In the electricity sector, the Government or an body authorised by it shall:
2) co-operate with foreign state electricity institutions and represent, within the limits of its competence, the Republic of Lithuania in international organisations;
4) set the expected time for connecting consumers’ equipment to the system and of electricity supply restoration;
5) in cases prescribed by this Law, issue licences (authorisations) for provision of electricity services;
Article 6. Functions of the National Control Commission for Prices and Energy in the Electricity Sector
1. The tasks, rights and functions of the National Control Commission for Prices and Energy (hereafter referred to as the Commission) shall be established by the Law on Energy, this Law and other legal acts of the Republic of Lithuania as well as the Commission Regulations.
2. The Commission shall be responsible for ensuring effective competition in the electricity market, non-discrimination of customers and suppliers and provision of all customers with services of established quality. The Commission hall control:
1) compliance with the rules for the management of interconnectors and allocation and regulation of interconnection capacity;
2) the time taken by transmission and distribution undertakings to make connections of consumers’ equipment to the system and to restore electricity supply;
3) public provision by transmission and distribution system operators of appropriate information concerning interconnectors, grid usage and capacity allocation to interested parties;
4) the effective unbundling of accounts with a view to avoiding cross-subsidies between generation, transmission, distribution and supply activities;
5) the terms, conditions and tariffs for connecting new producers of electricity to guarantee that these are objective, transparent and non-discriminatory, in particular taking full account of the costs and benefits of the various renewable energy sources technologies, distributed generation and combined heat and power;
Article 7. Structure of the Electricity Sector
Article 8. Interoperability and Integrity of the Electricity Sector
1. In order to ensure the integrity of the electricity sector on the basis of objective and non-discriminatory principles, the technical design and operational requirements for generation, transmission and distribution equipment shall be developed and regulated by the Grid Code approved by the Government or a body authorised by it.
2. Generating facilities, transmission and distribution systems, interconnectors and direct lines must be in conformity with the technical design and operational requirements in order to ensure the integrity of the system co-ordinated by the transmission system and distribution system operators.
3. Contracts for maintenance and operation of the transmission and distribution facilities located in the territory designated in the activity licence held by another undertaking shall be concluded following the procedure, terms and conditions established by the Government or a body authorised by it.
Article 9. Promoting Electricity Generation from Renewable Energy Sources
By imposing the public service obligations the State shall encourage the producers to generate electricity from renewable energy sources.
Article 10. Principles of the Licensing of Activities and Granting Authorisations in the Electricity Sector
1. The following activities shall be subject to licensing:
3. Criteria for issuing licences must be objective and non-discriminatory and in conformity with the targets specified in Article 3 of this Law.
4. Licences for the activities specified in paragraph 1 of this Article shall be granted and the licensed activities shall be controlled by the Commission.
5. Licences for distribution and public supply of electricity shall specify the territory in which the distribution system operator or the public supplier has exclusive rights to engage in activity.
6. Authorisations shall be issued for the following activities:
Article 11. Long-term Planning and System Development
1. The transmission system operator, taking into account the requirements for security of supply, quality, efficiency, consumption, management and environmental protection specified in the National Energy Strategy, improving the terms and conditions of access to the system shall plan the long-term development of the electricity system in coordination thereof with a body authorised by the Government and distribution system operators. Long-term planning of the electricity system must be based on scientific research.
2. The right to install or develop electricity systems in the territories indicated in the transmission and distribution licenses shall rest with the license holders.
3. In the event of absence of those willing to build new capacities in the manner established in Article 14 of this Law, a body authorised by the Government shall announce a tender for building new capacities and shall be responsible for the tender organisation and establishment of non-discriminating tender conditions for bidders.
Article 12. Reliability Monitoring
A body authorised by the Government shall monitor the reliability of transmission and distribution systems. The outcome on reliability monitoring shall be summarised in annual reports. The reports shall include the following data:
Article 13. General Principles of the Producers Activities
1. Connection and operation of producer facilities to transmission and/or distribution systems must be in conformity with the requirements of the Grid Code as well as technical conditions approved by the transmission and/or distribution system operators.
Article 14. Procedure for Granting Authorisations for Expansion of the Existing Electricity Generating Capacities and for Installation of New Capacities
1. Expansion of the existing generating capacity and construction of new generating capacity in a new location shall be subject to authorisation.
2. Authorisations shall be granted to all applicants who guarantee that activities carried out by them will satisfy the criteria relating to:
6) characteristics particular to the applicant, such as technical, economic and financial capabilities;
3. Authorisations for expansion of generating capacities shall be granted in observance of the Rules for Granting Authorisations for Activities in the Electricity Sector.
4. The granting of an authorization may not be refused for any other reasons than non-compliance with the requirements listed in paragraph 2 of this Article.
Article 15. Principles of Transmission Activities
1. The transmission system operator shall be responsible for stability and reliability of the electricity system, performance of the national balance function as well as provision of system services in the territory of the Republic of Lithuania, operation, maintenance, management and development of interconnectors to other systems by eliminating bottlenecks in the transmission networks in accordance with its customers needs.
2. The transmission system operator shall be responsible for ensuring that conditions for the connection of equipment of electricity producers, distribution system operators and customers are in conformity with the requirements laid down in legal acts and that discriminatory conduct is excluded. Customer’s equipment may be connected to the transmission grid only when the distribution system operator refuses to connect consumer’s equipment located in the territory indicated in the distribution system operator’s licence to the distribution network due to established technical and operational requirements.
3. The transmission system operator shall provide, on the basis of reciprocity, the operator of any other system with sufficient information to ensure the secure and efficient operation, co-ordinated development, integrity and interoperability of the interconnected system.
Article 16. Rights of the Transmission System Operator
The transmission system operator shall have the right:
1) to receive from producers, distribution system operators and customers whose equipment is connected to the transmission system the meter readings and other information necessary for planning the long-term development, carrying out the balancing function and fulfilling other duties listed in this Article;
2) to obtain from the users of the transmission networks information necessary for third party access to the transmission system;
3) to lay down, in accordance with the technical regulations of networks operation, the conditions for the operation of the distribution networks, power plants and customers connected to the transmission system, securing safe, stable and reliable operation of the energy system;
4) with regard to other energy systems, be the sole balancing and regulating electricity sales agent of the electricity system, organise trade in balancing and regulating electricity and reserve capacity at auctions;
5) grant access to the transmission networks for transit to a foreign state, if this does not restrict the interests of local market participants;
6) for the purpose of implementing accident prevention measures and emergency plans and for securing stability and reliability of operation of electricity system require that all market participants and operators implement mandatory accident prevention and accident response measures;
7) prepare and approve the rules for the regulation of interconnectors and distribution of capacities;
8) upon receipt of the permission to enter into territories and/or premises of electricity producers, distribution networks, customers, install, maintain or replace electricity measurement equipment or take their readings;
9) require from independent suppliers who have concluded agreements with eligible customers located in the territory specified in the transmission system operator’s license to provide adequate security of the fulfillment of obligations to guarantee future and/or existing obligations of independent suppliers to purchase from the transmission system operator the electricity consumed by an eligible customer but not purchased by the independent supplier, and to compensate for the resulting losses.
Article 17. Duties of the Transmission System Operator
The transmission system operator must:
1) develop long-term projections of the electricity system capacity balance and provide market participants with information about the forecasted shortage or limitations of the generated or transmission capacity;
2) provide the users of the transmission system with the service of electricity transport through transmission networks;
3) operate, maintain, manage and develop the transmission networks and interconnections, securing reliable operation of the transmission networks;
5) carry out measuring of electricity parameters and pass on electricity meter readings to market participants, including suppliers of balancing electricity for the quantity of electricity supplied by them;
6) connect the customers’ equipment and the installations of distribution system operators and producers to the transmission systems in accordance with the requirements of the appropriate technical regulations;
7) give duly substantiated reasons in writing for refusal to provide the existing and potential customers with the service of electricity transport. Such a refusal must be substantiated by technical criteria only;
8) dispatch electricity generation capacities and electricity flows in electricity transmission networks in the territory of Lithuania having regard to exchange of electricity and restrictions of electricity flows coordinated with other interconnected systems;
9) carry out the national balancing function by providing uniform, non-discriminatory and competitive conditions for all market participants;
10) fulfill the power and electricity reservation function by providing uniform, non-discriminatory and competitive conditions for all market participants;
11) compensate electricity costs in transmission networks. When purchasing electricity in order to compensate for such electricity costs incurred, ensure equal non-discriminating and competitive conditions for all market participants;
12) fulfill public service obligations in accordance with the procedure and conditions established by the Government or a body authorised by it;
13) guarantee safe, reliable and effective operation of electricity transmission networks and all ancillary services necessary for that purpose;
14) dispatch generation capacities according to the priorities set at the last electricity sale auction or under contracts;
15) ensure efficient, reliable and safe functioning of transmission networks in the territory of Lithuania with due regard to environmental protection;
16) ensure confidentiality of information obtained in carrying out its functions and considered a commercial or other secret, except in cases provided for by law;
17) make available to the public pertinent information relating to interconnectors, system use and distribution of capacities to the interested parties, having regard to the fact considering that not generalised information should be treated as confidential commercial information;
Article 18. Guarantees of Settlement of Payments for Electricity Transmission through Transmission Networks
Distribution system operators and eligible customers, whose equipment is connected to the transmission network shall be obliged to timely settle payments with the transmission system operator for electricity transmission through transmission networks. An eligible customer who commits a breach of the contract concluded with the transmission system operator must, on the latter’s request, secure the fulfillment of all its obligations.
Article 19. Principles of Distribution Activities
1. The distribution system operator shall be responsible for the distribution system from the connection point of the transmission network facilities to the connection point of customers’ or producers’ facilities, also for their safety, reliability, operation, maintenance, management and development in observance of the needs of distribution system users and for the metering of electricity transmitted through distribution system and installation of electricity meters.
Article 20. Rights of the Distribution System Operator
1. The distribution system operator shall have the right:
1) to receive from producers and eligible customers connected to the distribution system and from the transmission system operator electricity metering data and other information necessary for the fulfillment of their duties and functions provided in this Law and implementing legislation;
2) upon receipt of permission, to enter territories and/or premises of electricity producers, customers for the purpose of installation, maintenance or replacement of electricity metering equipment or for taking their readings;
3) to require from independent suppliers who have concluded contracts with eligible customers located in the territory specified in the license of the distribution system operator to provide adequate security of the fulfillment of obligations which would secure future and/or existing obligations of independent suppliers to purchase from the distribution system operator the quantity of electricity consumed by an eligible customer but not purchased by an independent supplier and compensate the related losses
Article 21. Duties of the Distribution System Operator
The distribution system operator must:
1) provide the distribution system users with the service of electricity transport through distribution system;
3) operate, maintain, manage and develop distribution networks and interconnections with other networks, securing reliable operation of the distribution network, guaranteeing reliable, effective and safe supply with due regard to the environment;
4) organise, install, operate and control metering of electricity transmitted through the distribution network held by it, also operate and maintain such metering equipment;
5) carry out measurements of electricity transmitted through distribution networks held by it and deliver to the system operator and market participants electricity meter readings of the amount of electricity supplied to them;
6) connect the customer and producer equipment, located in the territory specified in the license for distribution activity, to the distribution network in accordance with the corresponding technical specifications;
7) give duly substantiated reasons in writing for refusal to provide the existing and potential customers with energy transport service. Such a refusal must be substantiated by technical criteria only;
8) compensate electricity costs in distribution networks. When purchasing electricity in order to compensate for such electricity costs incurred, ensure equal non-discriminating and competitive conditions for all market participants;
9) develop accident prevention and response plans in the distribution system and control their implementation;
10) preserve confidentiality of commercially or otherwise sensitive information obtained in the course of carrying out its business, except in cases established by law.
Article 22. Guarantees of Settlement of Payments for Electricity Transmission
Eligible customers whose equipment is connected to the distribution network and who have concluded a contract for the supply of electricity with an independent supplier must settle payments on time with the distribution system operator for electricity transmission through transmission and distribution networks. An eligible customer who commits a breach of the contract entered into with the distribution system operator, must, on the latter’s request, provide security for the fulfillment of all its obligations.
Article 23. Principles of Supply Activities
1. Eligible customers may purchase electricity from public or independent suppliers and in other manner set forth in the Electricity Trading Rules.
2. Suppliers shall sell electricity at auction and/or on the Exchange, and/or according to bilateral agreements with producers and customers. The balancing electricity shall be traded by suppliers of balancing electricity.
3. Suppliers shall be responsible for billing non-household customers in accordance with Electricity Supply and Consumption Rules approved by the Government or a body authorised by it.
4. Suppliers who are not suppliers of balancing electricity must conclude contracts with the supplier of balancing electricity who has concluded an appropriate contract with the transmission system operator.
5. If an independent supplier supplies electricity to customers whose equipment is connected to the distribution network, whereas electricity meters measuring the quantity of consumed electricity are not connected to the automated meter reading system of the distribution system operator, the independent supplier must, at intervals fixed by the distribution system operator and at all times before terminating the contract concluded with an eligible customer purchase at the price of balancing electricity from the customers of the distribution system operator, who are supplied with electricity by the independent supplier, the quantity of electricity consumed but not purchased by the independent supplier or sell to the distribution system operator at the price of balancing electricity the quantity of electricity purchased by the independent supplier but not consumed by the customers supplied with electricity by the independent supplier.
Article 24. Public Supplier of Electricity
1. Where no other person has been issued the public supply licence in the territory specified in the electricity distribution licence held by the distribution system undertaking, the undertaking shall also be obliged to act as the public supplier of electricity.
3. The distribution system undertaking which in addition to the distribution activities also performs the activities of the public supplier must unbundle the activities. The distribution and supply activities shall be considered as unbundled also in the case when the activities of public supplier are performed by the sales division/electricity supply of the distribution system undertaking, provided that the conditions established under Article 33 of this Law will be secured.
4. The public supplier shall have the right to assign the conclusion of contracts with customers, also the electricity registration and/or collection of payments for electricity to the distribution system operator or to any another person.
Article 25. Duty of Public Supplier to Supply Electricity on Request
The public supplier shall be obliged to conclude contracts and supply electricity upon request to all the customers within the territory specified in the supplier’s license, who have not selected an independent supplier.
Article 26. Right of Public Supplier to Refuse Supply of Electricity on Request
The provision set forth in Article 25 of this Law shall not be binding if the public electricity supplier is prevented from implementing the provision by circumstances beyond its control.
Article 27. Guarantees of Settlement of Payments with the Public Supplier
1. Any customer who receives electricity from the public supplier on the basis of Article 25 of this Law shall be obliged to timely settle payments with the public supplier for electricity and its transmission. The customer who violates the contract concluded with the public supplier must, on the latter’s request, provide a guarantee of the proper fulfillment of all its obligations.
2. The customer shall have the right to unilaterally withdraw from the contract concluded with the public supplier without paying any charges.. The customer shall be obliged to give the public supplier in writing 30 calendar days in advance and by the day of withdrawal from the contract settle all payments with the public supplier for the supplied electricity and for its transmission service.
Article 28. Independent Supply of Electricity
1. The independent supplier shall supply the eligible customers who have chosen the independent supplier with electricity on contractual basis.
2. Before concluding or terminating the electricity supply contract with an eligible customer located in the territory specified in the independent supplier’s license, the independent supplier must communicate a 30 calendar day’s written notification to the effect to the public supplier.
3. Before concluding or withdrawing from a contract for the supply of electricity concluded with the independent supplier, the eligible customer located in the territory indicated in the independent supplier’s license must communicate a 30 calendar day’s written notification to the effect to the public supplier.
4. When purchasing electricity from the independent supplier eligible customers whose equipment is connected to the distribution network must pay to the distribution system operator for electricity transport through transmission and distribution networks, for system services as well as for the fulfillment of public service obligations.
5. Eligible customers whose equipment is connected to the distribution network, when purchasing electricity from the independent supplier must pay the transmission system operator for electricity transport through transmission network as well as for the fulfillment public service obligations in the electricity sector.
Article 29. Guarantees of Settlement of Payments with the Public Supplier
Eligible customers shall be obliged to timely settle payments with public suppliers for the supplied electricity. The eligible customer who violates the contract concluded with the independent supplier must, on the latter’s request, provide security for proper discharge of all its obligations.
Article 30. Organisation of Electricity Metering
1. Distribution system operators shall be responsible for organising the measurement and metering of electricity transported through their distribution networks.
2. The quantity of electricity consumed by eligible customers who are connected to the distribution network and purchase electricity from independent suppliers, which is established according to the readings of metering equipment by distribution system operators shall be regarded by the market operator as the actual quantity of consumed electricity which the independent supplier is obliged to purchase. .
Article 31. Customer Protection
1. Undertakings of the electricity sector shall inform customers about efficient electricity consumption, services provided by the undertaking , conditions of service provision, prices and tariffs of services and electricity, tariffs and terms for the connection of customer equipment to the grid and expected revision of contract terms. Undertakings of the electricity sector shall notify household customers in writing or by other means at least one month before the increase of prices and tariffs.
2. Household customers shall have the right to:
2) receive from the suppliers information containing the supplier’s name, principal place of business address, company code and legal form, services provided and their terms, prices and tariffs for services and tariffs, ways of notifying about prices, contract dates, contract conclusion and termination conditions, dispute settlement procedure.
3) unilateraly terminate the contracts without payment of charges if the revised contract terms are unacceptable to household customers.
Article 32. Unbundling the Activities
1. Licensed activities of transmission, distribution and of the independent supplier shall be unbundled and carried out by separate legal persons. Property used for carrying out the activities referred to in this paragraph may be held by the right of joint ownership by the legal persons referred to in this paragraph.
2. When the types of activities specified in paragraph 1 of this Article are performed by the vertically integrated undertaking, the founding documents of such an undertaking or of the controlling/controlled undertakings shall establish the criteria of independence of each undertaking in terms of organisation of activities and decision making, ensuring that:
1) heads of the legal persons performing the licenced activities of transmission, distribution and activities of the independent supplier act independently and participate in the management of only one type of activities listed in this subparagraph;
3. Where activities of the types specified in paragraph 1 of this Article are carried out by the vertically integrated undertaking, the controlling legal person shall have the right to approve, taking account of the price caps set by the Commission for the transmission and distribution services, only the annual financial plan and to set the yearly return on assets percentage and global levels of indebtedness of. the controlled legal persons carrying out the activities referred to in paragraph 1 of this part.
4. Where the activities specified in paragraph 1 of this Article are carried out by a vertically integrated undertaking, the controlling legal person shall have no right to give instructions to the controlled legal persons regarding day-to-day operations of the operators of transmission and distribution systems and the management of the energy system.
Article 33. Management of Accounts
1. Electricity undertakings shall record, group and aggregate their transactions relating to transmission, distribution, supply and other non-electricity activities in separate accounts and registers of accounting.
2. Until 1 July 2007, public suppliers shall keep separate accounts for supply activities for eligible customers and for supply activities for non-eligible customers, recording, grouping and aggregating information relating to the customers that are not entitled to freely choose a supplier and eligible customers in separate accounts and registers of accounting.
Article 34. Openness and Transparency of Accounts
1. Generation, transmission, distribution and supply undertakings shall be subject to mandatory independent audit.
Article 35. Provision of Information
1. The Government, or a body authorised by it, which has been charged under law to draw up the National Energy Strategy, National Energy Efficiency Programme and other energy programmes shall have the right to request the generation, transmission, distribution or supply undertaking to provide information necessary for the drawing up of the above-mentioned projects.
2. The Commission shall have the right to request from the generation, transmission, distribution or supply undertakings whose activity is subject to regulation under this Law and from the market operator the information necessary for due supervision of the electricity market.
3. The generation, transmission, distribution or supply undertakings must provide information specified in Paragraphs 1 and 2 of this Article in the manner prescribed by legal acts.
4. The Commission or other bodies may use the received confidential information only for the purposes for which it was requested.
5. A body authorised by the Government shall notify the European Commission every 2 years about all measures taken to secure the universal services of transport, to protect customers and environment and to fulfill public service obligations in the sector of electricity as well as about the expected impact of applied measures on competition.
6. A body authorised by the Government shall notify to the European Commission once in three months about the quantity of electricity imported from third countries.
7. A body authorised by the Government shall until 2010 provide, by 31 July of each year and from 2010 onwards every two years, the European Commission with the report on electricity. The report shall cover:
Article 36. Model of the Electricity Market
1. The electricity market shall be organised on the basis of contracts of producers, suppliers and eligible customers as well as in other ways provided for in the Electricity Trading Rules, by applying the regulated third party access principle for electricity transmission.
2. Standard conditions of electricity purchase-sale contracts with household customers shall be approved by a body authorised by the Government on proposal of suppliers upon agreement thereof with the National Consumer Rights Protection Board under the Ministry of Justice.
3. Every producer and supplier shall be responsible for conformity between the electricity generation quantity necessary for satisfying the demand and the electricity quantity specified in electricity purchase-sale schedules. The balancing electricity suppliers shall purchase or sell the balancing electricity in accordance with the Electricity trading Rules.
4. In compliance with the procedure established by this Law, eligible customers shall be free to choose any supplier.
5. The transmission system operator, by fulfilling the national balancing function, shall balance the generated quantities of electricity necessary for satisfying the demand with the quantities specified by producers and suppliers in the schedules submitted by the market operator, and shall coordinate the producers’ actions in case of imbalance and accidents, trade in balancing and regulating electricity with the balancing electricity suppliers, purchase electricity necessary for compensating the electricity costs in the transmission network, fulfill public service obligations in the sector of electricity.
Article 37. Entry of New Electricity Producers into the Market
Any legal person who has acquired an authorisation specified in Article 14 of this Law may become a producer of electricity.
Article 38. Principles of Organisation of the Electricity Market
1. Trade in electricity in the internal market shall be conducted in accordance with the Electricity Trading Rules approved by the Government or a body authorised by it; the Electricity Trading Rules are in compliance with the objectives set forth in Article 3 of this Law. These Rules shall be supplemented and amended to correspond to the stages of market liberalisation laid down in Article 40 of this Law.
2. Suppliers shall have the right to conclude direct electricity supply contracts with producers. The totality of the customer’s equipment in one geographical locality that has been independently connected to the distribution or transmission networks may be supplied with electricity only by one supplier - either by the independent or the public supplier.
3. All electricity market participants shall be granted the right of regulated third party access for transport of electricity. This right shall be exercised by concluding electricity transport contracts in compliance with the Rules for the Use of Networks approved by the Government or a body authorised by it.
Article 39. Market Operator
1. The market operator must organise trade in electricity according to the Electricity Trading Rules approved by the Government or a body authorised by it.
2. The market operator shall be responsible for publicly announcing the purchasing/selling price of balancing electricity valid at the end of the trading period following the Rules Trade in Electricity and/or the Rules for Electricity Trading at Auction approved by the Minister of Economy as well as for organising the settlement procedure for electricity traded in by the market operator.
Article 40. Liberalisation of the Electricity Market
The national electricity market shall be developed in stages, by gradually granting the regulated third party access right and the right to conclude a direct electricity supply contract with freely chosen independent suppliers to the following customers:
Article 41. Rights of Eligible Customers, Suppliers and Producers to Conclude Supply Contracts
1. Eligible customers shall have the right to conclude electricity supply contracts with suppliers and producers holding independent supplier’s licenses, who are operating both in the territory of the Republic of Lithuania and in other countries.
Article 42. Pricing
1. Prices of electricity sold by producers and independent suppliers as well as prices for reserve capacity shall not be regulated, except in the cases where the producer or independent supplier has over 25 % of the market share. The price regulation mechanism for the producers and independent suppliers having over 25% of the market share as well as the price regulation mechanism for balancing electricity shall be determined by the Commission.
2. The Commission shall regulate the prices for the transmission, distribution and public supply services as well as public electricity prices by setting the price caps. The specific prices and tariffs for the transmission, distribution, public supply services and public electricity shall be set and changed by the service supplier.
Article 43. Setting the Price Caps for Transmission, Distribution, Public Supply Services and Public Electricity
1. Price caps shall be determined by the Commission in accordance with the Law on Energy, this Law and the methodology for setting the price caps. The methodology for setting the price caps shall be worked out and approved by the Commission.
2. The price caps for the transmission, distribution and public supply services shall be set for the three-year regulatory period, the price cap for public electricity for one-year regulatory period.
3. Setting the price caps for the transmission, distribution and public supply services:
1) provision shall be made for mandatory expenditure for the purchase, transmission, distribution and supply of electricity (including electricity cost recovery), expenditure for the network development, reconstruction and maintenance works necessary for carrying out reliable, safe and qualitative operation as well as expenditure incurred in the course of the fulfillment of public service obligations and receipt of normative profit shall be secured;
2) account shall be taken of the value of assets used in the licensed activities assessed and approved by the Commission based on the principles of assessing the value of property used by the service provider in the licensed activities prepared by the Commission and approved by the Government;
3) regard shall be had of the value of the assets used by the service provider in the licensed activities, which is established on the basis of the service provider’s accounts;
4) the normative profit rate calculated on the value of property used in the service provider’s licensed activities each year of the regulatory period shall be not less than the weighted arithmetic average of the annual percentage interest rate at 10-year maturity GS auctions held during the last 36 calendar months, but not exceeding 5 percent
4. The price cap for public electricity shall be the sum of the producers’ forecasted electricity selling price, the transmission service, distribution service and public supply service price caps set by the Commission. In the event of changes of the above components of the public electricity price cap, the public electricity price cap shall change accordingly.
5. Price caps for the transmission, distribution and public supply services set by the Commission shall be subject to annual revision in the event of changes in the forecasting or data of the sold or transported electricity volume, the reliability of electricity transportation and service quality indicators, the annual inflation rate, the activities efficiency set by the Commission, the investment implemented by the undertakings and harmonized with the Commission, the taxes payable by the service provider, other factors beyond the service provider’s control affecting price cap computation, the forecasting or data based whereon the price caps were set or the normative profit set by the Commission was exceeded.
6. The price cap for transmission services shall be set or recalculated not later that three months and the price cap for distribution, public supply services and public electricity price – not later than two months of the beginning of the regulatory period or of the beginning of the respective year of the regulatory period.
Article 44. Setting Prices and Tariffs for Transmission, Distribution, Public Supply Services and Public Electricity
1. Upon the setting of the price caps by the Commission, the specific prices and tariffs for transmission, distribution, public supply services and public electricity shall be fixed and modified by service providers. The weighted average of prices and tariffs fixed by service providers within the regulatory period shall not exceed the appropriate price caps.
2. The transmission service price, except for the part of the public service obligation price, may be differentiated into electricity and capacity components.
3. The distribution service price and public price for electricity supplied by the public supplier may be differentiated by tariff categories with regard to customer groups, electricity consumption time, consumed volume of electricity, the established capacity as well as other objective factors chosen by the service provider which allow to seek higher operational efficiency when determining different categories of tariffs. It shall be prohibited to discriminate between customers when setting and differentiating prices and tariffs.
4. The Commission shall announce the prices and tariffs set by the service provider not later than within 30 calendar days from the day of the receipt of the service provider’s application, having first ascertained that the prices and tariffs are non-discriminatory for customers. The Commission having ascertained that the prices and tariffs set by the service provider are not complying with the requirements of setting prices and tariffs or are discriminatory to customers, shall indicate the errors to the service provider which the service provider has to correct and not later than within 10 calendar days from the receipt of the Commission’s comments submit to the Commission the corrected prices and tariffs of services. The Commission shall not later than 30 calendar days from the submission of the corrected prices and tariffs announce them or, if the service provider fails to correct the indicated errors within the set time limits, shall unilaterally set the service prices and tariffs and announce them.
5. The electricity selling price of producers whose electricity and reserve capacity prices are regulated and the prices and tariffs of the transmission system operator’s transmission service shall become valid two months after the announcement thereof. The distribution system operator’s distribution service prices and tariffs as well as public electricity prices and tariffs shall become valid one month after the announcement thereof.
6. At the end of every year of the regulatory period the Commission shall control whether the annual weighted average of prices and tariffs set by the service provider does not exceed the price caps. Should the Commission determine that the weighted average of prices and tariffs set by the service provider during the previous year of the regulatory period exceeded the relevant price cap, it shall have the right to commit the service provider to set the prices and tariffs that are smaller accordingly.
Article 45. Transport of Electricity through a Direct Line
1. All equipment of electricity producers and customers not connected to the transmission system or to distribution networks shall have the right to supply their divisions, subsidiaries and eligible customers whose equipment is not connected to the transmission or distribution networks through a direct line. Persons supplied with electricity through a direct line shall have to settle payments for the fulfillment of public service obligations.
2. Having settled payments for the fulfillment of public service obligations eligible customers whose equipment is not connected to either the transmission or distribution networks shall have the right to be supplied with electricity through direct lines from producers whose equipment is not connected either to the transmission or distribution networks.
4. Authorisations for the construction of direct lines or a substantiated written refusal to grant such authorisations shall be furnished to the applicant no later than within 30 days of the date of receipt of documents necessary for the issuance of an authorisation.
5. Authorisation for the construction of direct lines shall be issued only in the event of refusal to allow using transmission or distribution networks.
6. A refusal to grant an authorisation for the construction of a direct line may be based on public interests. Such a refusal must be duly substantiated. The applicants shall have the right to appeal against the refusal to grant an authorisation in the statutory manner.
Article 46. Conditions for Temporary Interruption and Restriction of Transport of Electricity to Customers not through their Fault
1. The transport of electricity to customers may be temporarily interrupted not through their fault only for the purposes of protecting public interests and performing electricity networks maintenance works.
2. For the purpose of performing electricity network maintenance works, the transmission or distribution system operator may partly or fully disconnect the customer’s equipment for the required time period only subject to the pre-defined schedule agreed in advance and upon an at least 10-day notice given to the customers. Conditions for temporary interruption of the transport of electricity with a view to securing public interests and the procedure for calculation and compensation of sustained losses shall be established by the rules approved by the Government, or a body authorised by it.
Article 47. Interruption of the Transport of Electricity to Customers through their Fault
1. The transmission or distribution system operator may interrupt the transport of electricity to those customers who cause disturbances by their acts and affect the quality of electricity, if the aforementioned customers do not discontinue such acts within 5 days of the receipt of a written warning.
2. The transmission or distribution system operator may interrupt the transport of electricity to those customers who, upon receipt of a written warning, failed to pay the bills for consumed electricity or for its transport and related services within 15 days in case of household customers, and within 10 days in case of other customers.
3. The transmission or distribution system operator may interrupt, subject to a prior warning and an indication of the interruption period, the transport of electricity to those customers who refuse transmission system and distribution system operators entrance to the territories of customers for the purpose of installing, maintaining and replacing electricity metering equipment or for reading the meters.
Article 48. Technical Requirements for Efficiency, Reliability and Safety of Electricity
1. Electric equipment installation, operation and safety requirements in the electricity sector shall be established by the Rules on Installation of Electric Equipment, Rules of Power Plants and Grid Operation and Safety Regulations for Electric Equipment Operation approved by the Government or a body authorised by it.
2. Accidents and interruptions in electric equipments generating, transmitting, distributing or consuming electricity shall be investigated following the procedure established by the Regulations on the Investigation and Accountancy of Accidents and Incidents at Energy Facilities, approved by the Government or a body authorised by it.
3. Control over compliance with the electric equipment reliability, efficiency and safety requirements in the electricity sector shall be exercised by a body authorised by the Government.
Article 49. Public Service Obligations in the Electricity Sector
1. The Government, or a body authorised by it may impose public service obligations on market participants in the sector of electricity.
Article 50. Use of Land for Objects of Electricity
1. Overhead low and medium voltage electricity lines intended for the transmission of electricity, overhead cables, also underground cable lines and installations, including transformer substations equipment, together with underground cable channels, poles holding the lines and other fixtures shall be considered as movable objects.
2. In order to ensure the operation, maintenance, repairs and use of electricity objects held by the transmission and distribution systems operators as well as equipment located on the land of other persons, this Law shall establish servitudes on land and other immoveable objects within the boundaries of protective zones established for these objects and equipment by legal acts .
3. The transmission system operators and distribution system operators shall have the right to freely approach on foot or by car or otherwise access the electricity object held or operated by them and located within the territory of another owner or user of land or other immoveable object, to carry out, in the manner established by legal acts, their repair works, technical maintenance, operation or upgrading. Without a written consent of the transmission system and distribution system operators any construction, repair, reconstruction works or demolition of any structures, carrying out of all kinds of mining, loading, bottom lowering, land excavation, explosion, amelioration, flooding works, mechanised storage of agricultural crops, construction of animal keeping sites, wire and metal fencings, planting or felling of trees, performance of other restricted works or actions provided for under legal acts shall be prohibited. The operators shall examine and respond to the applications for the performance of the above-listed works no later than within 30 calendar days. Failure give a response within the specified time period shall be treated as the operator’s consent.
4. The distance of protective zones, special land and forest use conditions applicable therein, the works and actions restricted in protective zones, minimum permitted distance from electricity objects to structures and to land and water surface shall be set by the Regulations for the Protection of Energy Facilities and other legal acts approved by the Government of the Republic of Lithuania or a body authorised by it.
5. The transmission system or distribution system operators shall have the right to construct new transmission, distribution lines or other electric installations on the land of other persons only upon conclusion of contracts or imposition of the servitude on the land in the manner established by laws.
6. Losses incurred by the land owner or user due to construction of transmission or distribution networks and other electric installations as well as activities of electricity undertakings in the servicing of the above-mentioned networks or installations shall be compensated in the manner established by laws.
7. If imposition of landed servitudes for building new transmission, distribution networks or other electric installations would result in a material restriction of the use of the land plot, the transmission system or distribution system operators at the land owner’s request must buy out such a land plot together with immovable property thereon.
Article 51. Liability
Persons who do not comply with or do not fulfill the requirements of this Law shall be held liable in the manner established by law.
Article 52. Final Provisions
1. This Law shall enter into force on 1 June 2009 except for paragraph 2 of this Article.
2 The National Control Commission for Prices and Energy and the Government of the Republic of Lithuania shall by 1 June 2009 prepare and approve the legal acts required for implementing this Law.
I promulgate this Law passed by the Seimas of the Republic of Lithuania
EU LEGAL ACTS BEING IMPLEMENTED
1. The Fourth Council Directive 78/660/EC based on the Treaty establishing the European Community, and in particular Point g of Paragraph 3 of Article 54 thereof in respect of the preparation of annual and consolidated accounts of companies.
2. The Seventh Council Directive of 13 June 1983 based on the Article 54 (3) (g) of the Treaty on consolidated accounts.
3. Council Directive 90/547/EEC of 29 October 1990 on the transit of electricity through transmission grids.
4. Council Regulation (EC) No 736/96 of 22 April 1996 on notifying the Commission of investment projects of interest to the Community in the petroleum, natural gas and electricity sectors.
5. Commission Regulation (EC) No 2386/96 of 16 December 1996 applying Council Regulation (EC) No 736/96 of 22 April 1996 on notifying the Commission of investment projects of interest to the Community in the petroleum, natural gas and electricity sectors.
6. Directive 98/34/EC of the European Parliament and of the Council of 22 June 1998 laying down a procedure for the provision of information in the field of technical standards and regulations.
7. DIRECTIVE 2001/77/EC OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL of 27 September 2001 on the promotion of electricity produced from renewable energy sources in the internal electricity market.
8. DIRECTIVE 2003/54/EC OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL of 26 June 2003 concerning common rules for the internal market in electricity and repealing Directive 96/92/EC.
9. Regulation 1228/2003/EC of the European Parliament and of the Council on conditions for access to the network for cross-border exchanges in electricity.
10. DECISION No 1229/2003/EC OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL of 26 June 2003 laying down a series of guidelines for trans-European energy networks and repealing Decision No 1254/96/EC.