How to obtain a license for the supply of electricity?
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In May 2020, we were contacted by a Client, a legal entity, who wanted to supply electricity to the consumer. Certainly, obtaining the licence is only the first stage of starting such a business. Moreover, it is not the most difficult stage, if you have suitable templates of documents and a website to be presented to the National Energy and Utilities Regulatory Commission (NEURC).
Then you will face a longer procedure for inclusion in the electricity market of Ukraine, which actually consists of several markets. This will require a clear understanding of future activities in order to know which market to join and how to organize your work in the future.
Our lawyers have already conducted the whole procedure from beginning to end many times, so we decided to use the Client’s example and share a short algorithm of actions necessary to obtain the Electricity License and to register in the electricity market.
If you are more interested in such a question as the price of the license and registration in the market, please follow the following links:
Where to start obtaining the license to supply electricity to the consumer?
The first step is to obtain the license. To do that, you need to take the following actions:
1. Prepare a full package of documents;
The package includes:
- a standard application;
- statements on the material and technical facilities, which shall specify the address of the premises, its area, a document confirming the right to use it, etc.;
- a power of attorney for the representative who submits the documents;
- a list of documents submitted.
Please note! Even one mistake in a word, such as the name of a registered LLC, can result in rejection or delay in obtaining the license.
A common mistake is to take incorrect or outdated templates of the documents needed to obtain the license (there are quite a few of them on the Internet) - which results in refusal, even though the differences between these documents are small.
At this stage, our lawyers use ready-made templates and applications developed by us, which significantly reduces the time required to prepare for obtaining the license.
2. Prepare a website that meets all the requirements of the NEURC and include its data in the statements;
The website should be ready before you submit the documents to the NEURC. You can’t finish it later or hope that the NEURC will not check the website. You won’t be able to get the license without a ready-made website specifying information about the company.
The requirements for the website include, for example, an indication of the legal framework on which you will operate, telephone numbers to contact the company, “accession agreement” and much more.
Our lawyers have ready-made templates of the website, and can develop it for you in the shortest possible time, as part of the package to obtain the license.
Read more about the requirements for the website here.
3. Submit a full package of documents, including the statements, to the NEURC.
Having prepared a full package of documents and the website, we need to submit all this information to the NEURC. Then our lawyers monitor consideration of documents and, if necessary, answer questions of the licensing authority.
You can learn more about the procedure for consideration of documents at the NEURC here.
What is the procedure for joining the electricity market of Ukraine?
Without the license, you won’t be able to proceed to the registration in the market. However, having only the license, you won’t be able to start your business activity.
The whole process of joining the market can be divided into 4 stages, each of which requires the preparation of a separate package of documents. Moreover, the procedure may be adjusted, depending on the number of Oblenergos you want to join and the markets you want to register in.
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Let’s briefly talk about the stages of the registration as an energy market participant:
1. Obtaining an ЕІС code for the company. This code is the identifier in the electricity market. Read more about the code and how it works here.
In addition, at this stage, we need to prepare and submit a package of documents to Ukrenergo in order to sign an electricity transfer agreement with them.
All documents must be competently drafted in accordance with the requirements of Ukrenergo. The package of documents shall include:
- a cover letter;
- a letter of notification;
- a power of attorney for a representative;
- a copy of the extract from the taxpayers register;
- an extract from the Unified State Register;
- a certified copy of the decree and minutes of appointment of the company’s director.
Please note! All energy companies are required to plan the amount of electricity sold and purchased on a daily basis. Accordingly, in case of oversupply and undersupply of the energy - there is such a concept as imbalances that allow to additionally sell or buy the necessary amount of electricity. To solve such situations, it is necessary to conclude the Electricity Imbalance Settlement Agreement.
Read more about the Imbalance Settlement Agreement here.
2. Connection to Oblenergo. This stage also requires a separate package of documents. You can both connect to one Oblenergo and all Oblenergos in Ukraine.
Our lawyers usually help with connection to one Obrenergo according to the Client’s choice, and provide clear instructions on how to do it further yourself.
Read more about the procedure of connecting to Oblenergos here.
3. Signing an agreement with the Market Operator. At this stage, our lawyers prepare the necessary package of documents, which is coordinated with the Market Operator. To save time, we conduct this and the next stage in parallel.
4. Registration at the Ukrainian Energy Exchange. This is the final stage of registration, which shall be followed by a guaranteed payment to confirm the financial capabilities of the company.
As for our Client, he decided to use the services of our company for obtaining the license and registering in the market. The entire procedure took us 40 business days, after which we handed over the ready documents to the Client.
If you want to start your business in the energy sector without any problems, don’t hesitate to call us. We will help you get all the documents quickly and easily.