Annual General Meeting of Members of NP "Market Council"
June 25, 2010
on agenda item No. 4
"On determining the priority areas of activity
of NP “Market Council” in the years 2010-2011"
Priority areas of activity of NP "Market Council"
in the years 2010- 2011
The objectives of establishing NP "Market Council" in accordance with the Federal Law “On the Electric Power Industry” and the Charter are as follows: "to implement the functioning of the wholesale market commercial infrastructure, to ensure effective inter-linkage between the wholesale and retail markets, to create favourable conditions for attracting investments to the electric power industry and a common stand of the wholesale and retail market participants when working on normative documents regulating electric power industry functioning, to organize, on a self-regulation basis, an effective system of wholesale and retail trade in electricity, capacity, other commodities and services eligible for circulation on the wholesale and retail markets, in order to ensure energy security of the Russian Federation, unity of economic space, freedom of economic activities and competition in the wholesale and retail markets, a balance of interests between electricity/capacity producers and buyers and satisfaction of public demand for secure and reliable supply of electric power".
The priority areas of NP "Market Council" activities in the years 2010-2011 are as follows:
1. With regard to organizing the functioning of the wholesale electricity and capacity market:
- to implement the functioning of the commercial infrastructure of the market, as well as creating conditions, elaborating proposals and adopting decisions facilitating the efficient interaction of commercial and technological infrastructure organizations of the market by means of introducing amendments to the wholesale market trading system accession contract and wholesale market regulations;
- to develop standard forms of contracts securing the conduct of trade on the wholesale market in electricity, capacity, other commodities circulating on the wholesale market, as well as providing services related to the circulation of the said commodities on the wholesale market, including preparation of proposals in order to renew circulation of capacity as a special commodity;
- to develop proposals aimed at updating the target model of the wholesale electricity/capacity market, including the launch of the long-term capacity market, and forming a system of long-term bilateral contracts for electric power supply to households;
- to develop proposals aimed at amending the Rules of the wholesale electricity market in the transitional period with regard to the improvement of control over legal relations in non-price zones;
- to develop proposals aimed at amending the Rules of the wholesale electricity market in the transitional period with regard to reducing non-payment risks and eliminating last-resort suppliers' cash gaps;
- to develop proposals aimed at perfecting the information disclosure system of the wholesale electricity and capacity market;
- to develop proposals aimed at creating conditions contributing to the development of electricity generation using renewable energy sources (RES), including participation in the development of the regulatory framework governing the procedure of applying an uplift to the equilibrium price of electricity. To perform the functions for the qualification of generating facilities that run on RES, as well as issuing certificates confirming that electricity generation runs on RES;
- to develop new instruments of trading on the wholesale electricity / capacity market facilitating the effective interaction between participants of the wholesale electricity market, including the organization of exchange trade in derivatives related to electricity and capacity transactions;
- to develop proposals aimed at creating conditions for the development of export-import operations on the wholesale market, including participation in the development of proposals for the introduction of appropriate amendments to normative legal acts;
- to devise proposals aimed at developing the infrastructure of financial settlements in order to improve their efficiency and reduce the risks of the wholesale market related to banking risks;
- to take part in developing proposals to introduce amendments to normative legal acts of the Russian Federation, the wholesale market trading system accession contract and wholesale market regulations, with regard to the possibility and procedure of making adjustments to trading results if errors are revealed in the results of the final transactions on the wholesale electricity / capacity market;
- to develop proposals aimed at introducing a system of financial guarantees to the wholesale market in order to reduce the risks of non-payment for electricity and capacity supplied to the wholesale market;
- to take part in developing proposals to introduce amendments to legislative acts of the Russian Federation, as related to the establishment of mechanisms and incentives for the conclusion of long-term contracts on the wholesale market.
2. With regard to organizing the functioning of the retail energy market:
- to take part in formulating legislative acts related to the formation of the target model of retail electricity markets, including creating a public retail markets information disclosure system for consumers, developing standard terms of service provided to clients by power retail organizations and distribution companies, providing incentives to retail market entities to install metering devices, raising energy efficiency;
- to participate in developing drafts of legislative acts related to the functioning of retail markets, including the elimination of discrepancies between various provisions of the Rules of the retail electricity markets functioning and the Rules of public utility service provision;
- to participate in developing drafts of legislative acts aimed at improving the payment discipline on retail markets;
- to participate in the development of a state support system for problem regions;
- to take part in developing and promoting proposals on improving the pricing system in the context of the transition to full liberalization of the wholesale electricity and capacity market, as well as setting up a system of monitoring retail power market prices;
- to participate in developing drafts of legislative acts aimed at improving access to electric power transmission services, including the procedure for technological connection;
- to take part in elaborating proposals aimed at improving the system of regulating electricity transmission tariffs and charges for technological connection to the grid;
- to develop proposals on the application of tariffs and determining the value of electricity and capacity supplied to the retail market at regulated prices (tariffs), on payments for deviations of actual consumption volumes from contractual values, as well as reimbursement of expenses due to a change in the contractual volume of power consumption in non-price zones of the wholesale market;
- to take part in developing proposals on introducing amendments to legislative acts of the Russian Federation related to the functioning of the target model of retail electricity markets.
3. In the area of control over participants of electricity / capacity markets, the commercial and technological infrastructure, as well as the resolution of disputes between wholesale market participants:
- to improve the system of monitoring of electricity and capacity market functioning and wholesale market participants’ activities.
- to participate in developing the rules of exercising anti-monopoly regulation and control in the electric power industry;
- to implement measures aimed at the improvement of metering: to take part in developing proposals on the optimization of the normative framework of the metering system to ensure the reliability of data for the financial settlement system of wholesale and retail markets. To develop proposals aimed at perfecting the set of measures that prevent the metering data manipulation by electricity and capacity market participants;
- to improve the system of continuous monitoring and control on the wholesale market over its participants' compliance with wholesale market rules and regulations. To take part in organizing the system of control over the implementation of investment programs, as well as the formation and implementation of maintenance programs by generating companies;
- to develop and phase in a system of controlling the compliance of commercial and technological infrastructure organizations with the Rules of the wholesale market (including control over the actions of the system operator in accordance with the Rules of the wholesale market), the Regulation on the procedure of acquiring the status of a wholesale market entity and maintaining the register of wholesale market entities, the Wholesale market trading system accession contract and wholesale market regulations, based on a unified approach to control over business processes performed by the commercial and technological infrastructure organizations in pursuance of the requirements contained in the specified documents;
- to develop the system and procedure of applying pecuniary sanctions for infringement, by electric power industry entities, of wholesale market rules and the Wholesale market trading system accession contract, to perfect the Regulation on the application of sanctions in the wholesale market;
- to organize interaction with exchanges and create conditions for exchange trading of electricity, capacity and derivative instruments. To improve the rules of accreditation of exchanges and the requirements towards them, towards the transactions performed at such exchanges (exchange trade rules), towards the organization of interaction between the exchanges and the commercial operator with regard to registration of contracts concluded during exchange auctions and follow-up control over the performance of obligations under such contracts by the parties;
- to refine the Concept of pre-court settlement of disputes in order to resolve conflicts between wholesale market entities. To perfect the mechanisms of functioning of the conflict and disciplinary commissions. To exercise control over wholesale market payments by the Payments Commission under the Supervisory Board;
- to develop proposals aimed at organizing a system of pre-court settlement of disputes between retail market entities;
- to provide expert opinions for the development of amendments to the Federal Law "On Arbitration Courts". To monitor the draft Federal Law "On the Alternative Dispute Resolution Procedure Involving a Mediator (Mediation Procedure)". To facilitate the activities of the arbitration court at NP "Market Council". To develop arbitral legal proceedings in wholesale and retail markets;
- to participate in court proceedings on disputes involving wholesale and retail market entities and originating from relationships in wholesale and retail markets.
4. With regard to providing Members of the Partnership and government authorities with information on the functioning of electric power markets in Russia and abroad, as well as ensuring communication between electric power market participants:
- to create equal conditions for the participation of Partnership Members in establishing a common stand on improving the mechanisms that maintain the functioning of electric power markets. To provide informational, technical and legal support for the activities of committees and commissions under the Supervisory Board of the Partnership;
- to develop the Regulation “On information disclosure” in order to establish and maintain a unified information system of the wholesale and retail markets;
- to regularly inform Partnership Members about the current situation on electricity and capacity markets and the Partnership’s (using Internet technologies, among other means): issuing regular newsletters, updating and organizing the information posted on the Partnership’s website, publishing quarterly reports on control over the activities of the System Operator, providing representatives of NP "Market Council" to speak at conferences and seminars related to issues concerning the Partnership’s interests;
- to participate in the activities of coordination, advisory and working bodies created by ministries and government agencies;
- to monitor and inform Partnership Members of the changes in the legislation of the Russian Federation concerning the regulation of relations in the electric power industry, including in the wholesale and retail markets;
- to organize events aimed at learning international experience of developing and introducing market mechanisms of electric power industry operation, and exchanging best practices in order to increase the competence level of specialists of Partnership Members and NP "Market Council";
- to set up a database of documents on standards and rules of regulating the electric power industry in foreign countries (information collection);
- to publish subject surveys on organizational, technological, economic and legal aspects of electric power industry operation abroad;
- to organize research on the problems of electric power markets functioning and development;
- to interact with international and Russian industry associations: CIS EPS, EURELECTRIC, CIGRE, ENTSO-E, VLPGO, WEC, etc.
- to participate in projects of cross-border trade development, interaction with national and regional electric power markets, harmonization of Russian and foreign normative and legal framework governing the functioning of electric power markets;
- to interact, for the purposes of fulfilling the functions entrusted to the Partnership, with executive and legislative power authorities of the Russian Federation, government authorities of constituents of the Russian Federation, local self-government bodies, regulating and controlling the Partnership’s activities and the operation of electricity and capacity markets;
- to review inquiries of state and local self-government bodies, of wholesale and retail electricity and capacity markets entities on matters related to the objectives of the Partnership's establishment, and to prepare expert opinions thereon;
- to improve interaction with Partnership Members, particularly with regard to timely consideration of inquiries made to NP "Market Council";
- to maintain information liaison with representatives of the mass media and analysts, as also with the press-service heads of the Members of the Partnership.
5. With regard to organizing admission to the wholesale electricity and capacity market:
- to perfect the procedure of gaining access and admission to the wholesale market. To put together proposals on amending the Regulation on obtaining the status of wholesale market entity and maintaining the register of wholesale market entities;
- to maintain the register of wholesale market entities and adopt decisions on awarding (withdrawing) wholesale market entity status;
- to develop requirements towards wholesale market entities: providing financial guarantees, volumes of electricity consumption from the wholesale market for retail market consumers, absence of recurring non-payments and others.
6. With regard to analytical support for the purpose of improved decision-making by participants of wholesale and retail of electricity and capacity markets and by bodies of state administration:
- to develop and implement a methodology of analysing and forecasting various aspects of wholesale and retail electric power markets operation (electricity production and consumption, price movement, status of settlements between the participants, etc.);
- to prepare and publish regular and ad hoc analytical reports on the functioning of wholesale and retail electricity markets;
- to provide forecasts wholesale and retail electricity market development consistent with the changing economic situation in the country for the short-term and long-term horizon;
- to conduct simulation analysis of wholesale and retail markets operation in contingency conditions, along with the economic consequences of decisions made in the area of developing the network and technological infrastructure of the electric power industry;
- to take part in developing proposals on draft legislative acts aimed at regulating relations in adjoining industry sectors - heat supply, housing and utilities.