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Regulator proposes amendments to Distribution System Code to simplify connection of consumers and to regulate connection of industrial parks to electrical grids

On 21 October 2020, the National Energy and Utilities Regulatory Commission of Ukraine (NEURC) approved for public discussion NEURC's draft resolution approving amendments to the Distribution Systems Code (the "Draft Resolution"). This Draft Resolution regulates the aspects of connecting industrial parks to electrical grids in accordance with draft laws being considered by the Parliament and relating to the attraction of investments in the industrial sector of the economy by introducing investment incentives in industrial parks. In addition, the Draft Resolution simplifies the procedures for connecting to the distribution system subject to the requirements of the modern digital world.

The Draft Resolution introduces the following changes.

1. Elaboration of agreements for connection to the distribution system electrical grids.

It is suggested that model connection agreements be restated; and (i) model agreements for non-standard connection to the distribution system electrical grids on a turnkey basis and (ii) model agreements for non-standard connection to the distribution system electrical grids with customer's design of the linear part of the connection be separated from other model agreements. Such agreements will become public (except for their annexes). In particular, the following provisions have been added to model agreements for standard connection to the distribution system electrical grids and model agreements for non-standard connection to the distribution system electrical grids on a turnkey basis:

  • provisions on the publicity of these agreements;
  • provisions on a customer's right to file, with the distribution system operator, applications, complaints, claims and requests for reimbursement and payment of penalties for failure to comply with the term of provision of connection services;
  • provisions on the connection fee, which must be determined in an annex to an agreement;
  • provisions on penalties in the case of failure to comply with the term of provision of services for standard connection to electrical grids. The defaulting party is required to pay the other party a penalty in an amount proportionate to the delay period;
  • provisions on force majeure circumstances, which provide that the party that becomes unable to meet its contractual obligations as a result of circumstances beyond its control is required to notify the other party in writing of the commencement, duration and a likely date of termination of the force majeure circumstances no later than 5 days after they have occurred;
  • a section about the provision of services for connection to electrical grids of the distribution system operator, which defines the concept of 'a distribution system operator's notification on connection services'; and
  • a 'miscellaneous' section.

No signature is required for the signing of an agreement for connection to the distribution system electrical grids. The agreement is accepted against a payment made by the customer.

2. Simplification of the connection procedure

The Draft Resolution shortens the list of documents to be attached to an application for connection of an electrical installation, and the application itself must be submitted in digital format.

The application for connection is filed together with, inter alia, copies of a topographic and geodetic plan or a development plan of the territory, specifying the location of the land plot, or any other graphic materials specifying the location of (locating) the customer's facility (facilities), the customer's land plot and the planned point of connection (for facilities, which are connected to electrical grids for the first time).

In the case of connecting an industrial park, which has been established in accordance with the requirements of applicable Ukrainian law, in particular the Law of Ukraine on Industrial Parks, the application must also be filed together with the following documents: a copy of the document of title to, or the document entitling to use, the land plot; cadastral numbers of the land plots where the industrial park has been established; a copy of the decision entering the industrial park in the register of industrial parks; and a copy of the agreement for establishment and operation of the industrial park.

It is not necessary to file documents if they are available in Ukraine's digital databases. In such case, their identifiers will be sufficient.

3. Classification of small distribution systems

The Draft Resolution introduces the concepts of a small distribution system's operator, users, and territory.

According to the Draft Resolution, an electrical grid is classified as a small distribution system ("SDS") if it simultaneously meets the following size criteria:

  • more than two points (individual or corporate users) are connected to the SDS;
  • the capacity of the SDS connected to the distribution system operator ("DSO") and/or the transmission system operator ("TSO") exceeds 5 MW;
  • the expected average monthly volume of electricity distribution by the SDS exceeds 500,000 kWh;
  • electricity is distributed to less than 100 household consumers having contractual relationships with, or being otherwise connected to, the owners of the SDS, and/or the system is jointly owned by such household consumers; and
  • there is no transit of electricity outside the territory of the SDS (no electricity is distributed to other consumers and/or within the DSO's/TSO's network).

The electrical grid can be classified as an SDS if the customer has received and complied with the specifications for connection of the industrial park.

4. Informing consumers about scheduled power outages

According to the Draft Resolution, the DSO must post on its website information about scheduled power outages, specifying settlements and streets and/or facilities that will be subject to a power outage, the reasons for the power outage, and the date and time of commencement of the outage (with an accuracy of up to one hour) and its duration; the DSO must also send this information to the local government authorities having jurisdiction over the territories that will be subject to the scheduled power outages. The information must be posted no later than 10 calendar days before a power outage. The DSO must automatically inform a consumer about scheduled (no later than 3 calendar days before a power outage) and emergency power outages affecting their facility by sending them relevant messages (in particular, using personal areas of consumers and/or other electronic platforms). Messages about emergency power outages must contain information about the reasons for, and the expected duration of, a power outage.

For further information, please contact Asters' Senior Associate Marta Halabala and associate Olena Sichkovska.

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