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On September 24, 2019, the VEGAS LEX law firm held a business breakfast in the Marriott Moscow Grand hotel devoted to the topic of "Loss-free power supply: how can consumers avoid unexpected losses?" and involving the FAS Russia’s reps.

Evgeny Rodin, Partner, Head of Energy practice at VEGAS LEX, moderated the event, turning over first to the FAS Russia’s rep.

Alexey Voronin, Deputy Head of the Department for Regulation over Electric Power Industry at the FAS Russia, highlighted in his report the antitrust aspects of transition of large industrial consumers to direct contracts with FGC UES. According to the antimonopoly body, consumers do not pay regional 'common pot' tariffs and prefer to transfer to direct relations with FGC UES because of incorrect distribution of cross-subsidisation amounts and return on investment with regard to pricing-rise smoothing.

Yury Tatarinov continued the discussion on selection of a grid company. The expert dwelt upon legislative tools for transfer from local grid operators to FGC UES and the existing restriction on access to the grids of FGC UES. The consultant also clarified the key issues of challenging pricing-related decisions in a court of law and in the extrajudicial manner. He spoke of the ways to oblige the regulator to adopt a replacing statute/regulation and of particular features of using an astreinte (a judicial punishment for failure to execute a judgment) in disputes in the energy sector. The expert shared information about cases from practice relating to disputes resulting from improper technological connection. He also specified what consumers should take into account in the event of electric power co-utilization.

Evgeny Rodin ended the first session of the event with a report devoted to legal and strategic aspects of handling lawsuits on contract coercion and on settlement of pre-contractual differences. The partner explained how one should react to receiving an offer within a prospective dispute, revealed main aspects of the tactics of a dispute on conclusion of a contract using tools of administrative coercion and touched upon other issues.

The second session of the occasion was devoted to the specifics of loss recovery in the power sector and the issues of non-contract energy consumption.

Maxim Grigoryev, Partner and Head of special projects at VEGAS LEX, spoke of legal aspects of loss recovery in the power sector associated with breaches of technological connection contracts, power supply contracts and power transmission service agreements. The expert talked about the options of recoverable losses, including the cases when losses exceed the real damage amount; special attention was paid to the practice of recovery of losses associated with torts. The partner also spoke of equality of obligations between a consumer and a supplier of the power in terms of power supply reliability.    

Viktor Petrov, Head of Litigation practice at VEGAS LEX, highlighted the importance of insurance of property and business interruption losses. The expert touched upon the specifics of pre-trial loss settlement and settlement of court disputes in BI* in the power industry; he gave examples from his personal experience and from the world practice.

Evgeny Rodin devoted his speech to the legal nature of non-contractual consumption of electric power. The expert told the audience how a consumer can protect its interests in the case of illegal claims for pay of non-contract or off-the-meter consumption, named the signs of unjust enrichment in terms of non-contractual consumption and gave examples of certain cases of non-contractual consumption from the court practice.

For the analytical summary concerning the legal nature of non-contract energy consumption produced by VEGAS LEX’s experts, visit our website.

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*BI — Business interruption insurance

You can find out about VEGAS LEX’s services in the energy sector here.