Courts confirmed unlawful actions of providers of last resorts in the North Caucasus

Arbitration Courts of two subjects of the Russian Federation charged energy companies over 188 million RUB

In 2014, FAS found that providers of last resorts  - “Dagestan Energy Suppliers” OJSC, “Nurenergo” OJSC, “Kabbalkenergo” OJSC, “Karqachaevo-Cherkessenergo” OJSC, “Ingushenergo” OJSC and “Sevkavkazenergo” PJSC violated the Federal Law “On Protection of Competition”  (Part 1 Article 10).

In January 2011 - December 2012 the companies considerably exceeded the planned consumption volumes in comparison with the actual ones in an organized manner and on a regular basis. Such actions led to an unreasonable growth of prices for other electric power consumers in the First Price Zone of the wholesale market of electric power and capacity, which is a sign of restricting competition.

The companies operate in the territories with preferential conditions for purchasing electric power volumes.

Deputy Head of FAS Vitaly Korolev explained: “Therefore providers of last resort used to purchase more than necessary at low regulated prices and then resell it more expensively at the market, increasing the prices on the wholesale electric power market. The Antimonopoly Service issued an injunction to transfer over 512 million RUB of unlawfully gained income to the federal budget. All Court instances confirmed the legitimacy of FAS decision and injunction, including the Supreme Court of the Russian Federation”.

“Nurenergo” OJSC was required to transfer over 128 million RUB to the budget and “Sevkavkazenergo” PJSC - over 60 million RUB. The companies, however, failed to execute the injunction issued by the antimonopoly body.

FAS filed claims to the Arbitration Courts of the Republics of North Ossetia-Alania and Chechnya to charge the income gained violating the antimonopoly law to the federal budget. The two Courts allowed the claim and obligated the companies to transfer the above suns to the budget of the Russian Federation.

“Unreasonable actions of energy companies that lead to price manipulation on the wholesale and retail electric power markets still remain a pressing issue in the modern organized market. Courts once again supported the antimonopoly bodies in applying the mechanisms of charging unlawfully gained income and it allows to efficiently suppress such violations in the future”, emphasized Head of FAS Department for Control over Regulating the Electric Power Industry, Dmitry Vasiliev.