Pursuant to Article 6 of the Federal Law "On Specific Features of Functioning of Electric Power Industry During the Transitional Period and on Introduction of Amendments into Certain Legislative Acts of the Russian Federation and on Recognizing Certain Legislative Acts of the Russian Federation to Have Lost Their Force in Connection with Adoption of the Federal Law 'On Electric Power Industry' " (Collection of Legislation of the Russian Federation, 2003, No. 13, p. 1178), the Government of the Russian Federation decrees:

1. The enclosed Wholesale Electric Power (Capacity) Market Rules of the Transitional Period (hereinafter referred to as the Rules) shall be approved.

2. The price zone of the wholesale electric power (capacity) market of the transitional period, uniting the territories of the constituent entities of the Russian Federation according to the annex, within the boundaries of which all electric power industry entities shall be granted with the right to exercise the purchase and sale of electric power at free (non-regulated) prices in the procedure established by the Rules shall be determined.

3. The Federal Energy Commission of the Russian Federation shall, within a two week period, approve the methodology of calculation of the value of deviation of the volumes of actual generation (consumption) of electric power by wholesale market participants from the volumes of their planned hourly generation (consumption), which methodology shall be based on tariffs for electric power (capacity) and be increased (reduced) depending on the reason of the deviation;

within a 3 month period, set tariffs for electric power sold in the wholesale electric power (capacity) market for each electric power plant belonging to energy and electricity joint stock companies and meeting the requirements for wholesale electric power (capacity) market participants;

approve, together with the Ministry of Economic Development and Trade of the Russian Federation and the Ministry of Energy of the Russian Federation, a list of electric power suppliers whose generating capacity maintenance costs are paid in full by buyers that received the right to acquire electric power (capacity) in the wholesale market at set tariffs.

4. The Ministry of Economic Development and Trade of the Russian Federation shall, together with the Ministry of Energy of the Russian Federation, Federal Energy Commission of the Russian Federation, Ministry of Nuclear Power of the Russian Federation, Ministry of Anti-monopolistic Policy and Entrepreneurial Support of the Russian Federation and with the participation of the UES of Russia, a Russian joint stock company, Russian State Concern for Generation of Electric and Thermal Power at Nuclear Plants, a federal state unitary enterprise, and Administrator of the Wholesale Electric Power Market Trading System of the Unified Energy System, a non-commercial partnership, carry out before August 1, 2004 the analysis of efficiency of functioning of the wholesale electric power (capacity) market and submit to the Government of the Russian Federation its results as well as proposals on the necessity to make amendments to the Rules for the purposes of further liberalization of the wholesale electric power (capacity) market, improvement of competition in the wholesale market, increase of the number of price zones of the wholesale electric power (capacity) market and updating of their composition.

5. It shall be established that the effective procedure for making settlements for the generating capacity of electric power (capacity) suppliers shall be kept until January 1, 2004. During the said period, the effective tariffs for electric power approved for a participant in the regulated sector of the wholesale market shall apply instead of the capacity-related tariffs for electric power and prices for electric power and capacity in the regulated sector in Clauses 18, 29 and 56 of the Rules to the extent related to the procedure for payment of electric power, generating capacity and services for reservation of generating capacity, and Clause 74 shall not apply.

6. It shall be established that, for preparation of wholesale electric power market entities of the transitional period for participation in the deviation sector, the volumes of deviations of actual generation (consumption) of electric power by wholesale market participants from the volumes of their planned hourly generation (consumption) shall be determined until January 1, 2004 totally for the calculation period and coefficients provided for by Section XI of the Rules for calculation of the value of deviations shall apply from December 1, 2003.

7. This decree shall enter into force as from November 1, 2003.

Chairman of the Government of the Russian Federation
M. Kasyanov

APPROVED BY
Decree No. 643, dated October 24, 2003,
of the Government of the Russian Federation

Wholesale Electric Power (Capacity) Market
R U L E S
of the Transitional Period

I. General Provisions

1. Pursuant to Article 6 of the Federal Law "On Specific Features of Functioning of Electric Power Industry During the Transitional Period and on Introduction of Amendments into Certain Legislative Acts of the Russian Federation and on Recognizing Certain Legislative Acts of the Russian Federation to Have Lost Their Force in Connection with Adoption of the Federal Law 'On Electric Power Industry' ", these Rules establish legal fundamentals of functioning of the wholesale electric power (capacity) market (hereinafter referred to as the wholesale market) during the transitional period of restructuring of the electric power industry (hereinafter referred to as the transitional period) within price zones determined by the Government of the Russian Federation. During the transitional period, electric power and capacity shall be traded in the wholesale market in the volumes determined upon the results of functioning:

of the regulated sector in which wholesale trading in a portion of volumes of electric power and capacity is performed at tariffs approved by the federal body of executive power regulating natural monopolies in the procedure established by the Federal Law "On State Regulation of Tariffs for Electric and Thermal Power in the Russian Federation." The system of relations among wholesale market entities within the regulated sector, which system is related to trading in electric power in the volumes corresponding to the difference between the volumes of its actual and planned generation (consumption), shall be referred to as the deviation sector for the purposes of these Rules; of the free trade sector in which wholesale trading of a portion of volumes of electric power is performed in the form of concluding and performing bilateral purchase contracts and in the form of selection of price offers of buyers and sellers at free (non-regulated) prices.

2. The following main notions are used in these Rules:

a) "wholesale market participants" mean suppliers of electric power and capacity (generating companies) and buyers of electric power and capacity (energy sale organizations, large consumers of electric power, guaranteeing suppliers) that received the status of wholesale market entities;

b) "regulated sector participant" means a wholesale market participant that received the right to participate in relations connected with trading in electric power and capacity in the regulated sector;

c) "free trade sector participant" means a wholesale market participant that received the right to participate in relations connected with trading in electric power in the free trade sector pursuant to these Rules and a contract for connection to the wholesale market trading system;

d) "own planned hourly consumption" means total volumes of own consumption of electric power by a wholesale market participant and of consumption by consumers that are serviced by it in the retail market and are not wholesale market participants (if any), which volumes are planned for each hour of a respective day;

e) "planned hourly consumption" means a sum of the own planned hourly consumption of electric power by a wholesale market participant and of the own planned hourly consumption by free trade sector participants (if any) serviced by it in the retail market, which sum is determined for each hour of a respective day in each delivery point of the wholesale market participant;
f) "planned hourly generation" means volumes of generation of electric power by a wholesale market participant, which volumes are planned for each hour of a respective day and determined in the procedure established by these Rules and a contract for connection to the wholesale market trading system;

g) "planned sale (purchase) volumes" mean volumes of electric power sold (purchased) in the free trade sector, which volumes are a part of the planned hourly generation (consumption);

h) "planned volumes of the free trade sector" mean planned purchase volumes and planned sale volumes of electric power determined upon the results of competitive selection of price offers;

i) "deviation" means a volume of electric power determined as a difference between the volumes of its actual generation (consumption) and planned generation (consumption) by a wholesale market participant at a respective hour of the day;

j) "price offer" means a document that is executed in accordance with these Rules and a contract for connection to the wholesale market trading system and reflects the intent of a free trade sector participant to purchase or sell electric power at a certain delivery point (point group) and establishes the planned volumes of electric power for each hour of a day, specifying purchase (sale) prices expected for each of the planned volumes;
k) "price acceptance offer" means a price offer of a free trade sector participant which reflects that participant's intent to sell (purchase) the volume of electric power specified in the offer at an equilibrium price formed as a result of competitive selection of price offers;

l) "competitive selection of price offers " means a procedure for selection of price offers of buyers and price offers of sellers based on the minimal prices for electric power;

m) "calculation period" means a period of time which is uniform for all wholesale market participants and established by a contract for connection to the wholesale market trading system to determine the amount of obligations related to payment of electric power (capacity);
n) "commercial metering" means a system of measuring the volumes of actual generation and consumption of electric power (capacity) in the wholesale market and of collection of information thereon;

o) "delivery point" means a location in the electric power grid determined for each wholesale market participant by the system operator and trading system administrator upon agreement with power grid companies and the said wholesale market participant and used to determine and perform obligations under electric power purchase contracts by the wholesale market participant and obligations related to payment of electric power losses by the possessor of electric power grid facilities;

p) "delivery point group" means an aggregate of several delivery points of a wholesale market participant, determined by the system operator and trading system administrator and relating to one calculation model node and(or) to a single technologically inseparable power facility;

q) "system constraints" mean maximum allowable values of technological parameters of functioning of the Unified Energy System of Russia (hereinafter referred to as the UES of Russia);

r) "forced mode" means technological parameters of operation of generation capacities in a cogeneration mode, and of system generators, nuclear power plants as well as hydro electric power plants under the conditions of technological passage of water;

s) "calculation model" means a description of the electric power industry system designed to build a mathematical model of the process of generation, transmission and consumption of electric power, which model is used to calculate the volumes of generation and consumption of electric power realized in that electric power industry system and equilibrium prices corresponding to them;

t) "calculation model node" means a calculation model's component part corresponding to the connections of electric power grids described in the calculation model and to the places of connection of consuming and (or) generating facilities to them (each generating facility connected to high-voltage grids is described in the calculation model separately).

II. Main Principles of Organization of Wholesale Trading in Electric Power in the Transitional Period

3. The organization of functioning of the wholesale market of the transitional period shall be based on the independent determination by buyers participating in the wholesale market of their own planned hourly consumption. Wholesale market participants shall state their own planned hourly consumption to the system operator in the procedure established by the contract for connection to the wholesale market trading system for each delivery point (point group).

4. Based on the volumes of the own planned hourly consumption stated by wholesale market participants, forecasted summary balance of generation and supplies of electric power (capacity), and tariffs for electric power sold by generators in the wholesale market, the system operator shall draft a preliminary hourly dispatch schedule of generation and consumption of electric power by wholesale market participants for the forthcoming day (hereinafter referred to as the preliminary dispatch schedule). The said schedule shall describe the operation mode of the UES of Russia that is being implemented and include such hourly volumes of generation of electric power by all wholesale market participants that ensure their stated own planned hourly consumption, with due regard to system constraints, losses of electric power in electric power grids, requirements for maintenance of capacity reserves, and standards of capacity reserves at the UES of Russia. Taking into account the specific features of technological operation modes of hydro electric power plants that necessitate the use of electric power generation at hydro electric power plants for the purposes of frequency regulation of the functioning of the UES of Russia, the system operator shall establish a maximum hourly volume of generation of electric power at hydro electric power plants. The said volume shall be taken into account when electric power is traded in the free trade sector and give a possibility to sell a total of 15 percent of the electric power volume planned in the preliminary dispatch schedule in this sector during the day.

Based on the preliminary dispatch schedule and upon the results of competitive selection of price offers in the free trade sector, the trading system administrator shall determine the planned hourly generation of each wholesale market participant and inform each participant of such generated amount no later than on the day immediately preceding the day of actual delivery of the electric power. The trading system administrator shall, in its activities, follow the principle of minimizing the cost of electric power to consumers, with due regard to system constraints, losses and system functioning costs.

5. The wholesale trading in electric power in the free trade sector shall be based on the principles of competition and freedom of choice of the procedure for purchase and sale of electric power by wholesale market entities with the use of the following pricing mechanisms:

·         free determination of prices and volumes of delivery of electric power within the framework of bilateral electric power purchase contracts (hereinafter referred to as bilateral contracts) concluded by free trade sector participants in accordance with these Rules and a contract for connection to the wholesale market trading system;

·         a mechanism that is based on competitive selection of price offers of free trade sector participants, which mechanism ensures the setting of free prices that balance the demand and supply of electric power (hereinafter referred to as equilibrium prices).

6. In the free trade sector, equal rights shall be ensured for all of its participants with the following constraints:

·         each supplier shall be entitled to sell each hour a volume of electric power that does not exceed the volume generated in each delivery point (point group) with the use of 15 percent of the installed (operating) capacity of the generating equipment owned by or otherwise belonging on a lawful ground to it, with due regard to the composition of the working generating equipment selected by the system operator in drafting the preliminary dispatch schedule as well as subject to the provisions of Clause 4 of these Rules relating to the maximum generation of electric power at hydro electric power plants; each buyer shall be entitled to acquire up to 30 percent of the own planned hourly consumption.

7. The wholesale trading in electric power and capacity in the regulated sector shall be carried out at tariffs set by the federal body of executive power regulating natural monopolies.

8. Each supplier participating in the regulated sector shall sell in the regulated sector (without taking into account the deviation sector) no less than 85 percent of the volume of electric power (capacity) planned in the preliminary dispatch schedule in respect of each generating facility that meets the requirements of Clause 14 of these Rules. The provisions of Section XII of these Rules shall apply to regulated sector participants that supply (purchase) electric power in that sector and in the retail market in respect of the same delivery point (point group).

If the volume of generation of electric power that is minimally possible due to technological constraints or the volume of generation of electric power in the forced mode exceeds the said 85 percent, that volume of electric power shall be sold in the free trade sector at an equilibrium price or in the regulated sector (without taking into account the deviation sector) at tariffs established by the federal body of executive power regulating natural monopolies.

9. A free trade sector participant which is not a regulated sector participant shall purchase electric power in a volume equal to the difference between the own planned hourly consumption and the volume of electric power acquired in the free trade sector, outside the wholesale market (in the retail market), including from energy sale and energy supply organizations as well as from guaranteeing suppliers of electric power.

Tariffs for electric power (capacity) may not be differentiated for buyers depending on their participation in the free trade sector.

10. The volume of electric power acquired in the regulated sector (without taking into account the deviation sector) by each of its participants shall be determined as a difference between the planned hourly consumption of that participant and the sum of volumes of purchases of electric power in the free trade sector by that participant and free trade sector participants serviced by it in the retail market in respective delivery point groups.

11. The value of deviations shall be determined in the procedure established by these Rules on the basis of tariffs approved by the federal body of executive power regulating natural monopolies.

12. The system operator shall manage technological operation modes of electric power industry facilities on the basis of the planned hourly generation and the own planned hourly consumption stated by wholesale market participants. If the values of parameters of reliability of functioning of the UES of Russia and of quality of electric power deviate from established parameters, the system operator shall change technological operation modes of electric power industry facilities, proceeding from the requirement of minimizing the aggregate value of deviations.

13. In case of an emergency situation, the final calculation of the value of deviations shall be made with due regard to the reason of such a situation determined in the established procedure.

III. Procedure for Obtaining the Status of a Wholesale Market Entity Participating in the Electric Power Trading in the Wholesale Market

14. Suppliers and buyers of electric power shall obtain the status of a wholesale market entity participating in the electric power trading in the wholesale market once they meet the following requirements:

a) compliance with quantitative characteristics applied to facilities in respect of which the offeror plans to participate in the wholesale market:

·         an electric power supplier owns or otherwise possesses on a lawful ground the generating equipment whose installed generating capacity in aggregate equals or exceeds 25 MW and in each proposed delivery point of electric power is no less than 5 MW; an electric power consumer owns or otherwise possesses on a lawful ground the power receiving equipment whose total connected capacity equals or exceeds 20 MVA and in each delivery point group corresponds to or exceeds the minimum value of the aggregate connected capacity;

·         an energy sale or an energy supply organization have a total connected capacity of the power receiving equipment of no less than 20 MVA under the aggregate of contracts concluded with consumers, provided that it corresponds to or exceeds the minimum value of the aggregate connected capacity in each delivery point group.

The minimum value of the aggregate connected capacity shall be determined by the federal body of executive power regulating natural monopolies.

The quantitative characteristics specified in this subclause shall not apply to guaranteeing electric power suppliers.

Each delivery point (point group) may be represented in the free trade sector by one buyer and (or) supplier only.

In respect of organizations that perform export and import transactions, the said quantitative characteristics shall apply to the capacity transmitted in the delivery point (point group) in accordance with the contracts concluded by these organizations;

b) compliance with the requirements of a technical nature established by normative legal acts and a contract for connection to the wholesale market trading system:

·         ensuring the commercial metering of electric power (capacity) generated (consumed) in the wholesale market;

·         ensuring the system of communications, including the data transmission system, with the system operator and the trading system administrator;

c) existence of a contract for provision of electric power transmission services concluded in the established procedure.

15. Organizations that received the status of a wholesale market entity on the basis of decisions made by the federal body of executive power regulating natural monopolies before the date when these Rules enter into force in the procedure established by the Government of the Russian Federation as well as Russian State Concern for Generation of Electric and Thermal Power at Nuclear Plants, a federal state unitary enterprise (hereinafter referred to as Rosenergoatom Concern) shall be regulated sector participants and have the right to participate in relations connected with the electric power trading in any of the sectors of the wholesale market.

The following specific features shall be established in respect of the said organizations: the quantitative characteristics specified in Clause 14 of these Rules shall not apply to them; commercial metering systems that they have as of the date of entry into force of these Rules may be used. In doing so, the said organizations shall, within two years after the date of entry into force of these Rules, be obliged to bring their commercial metering systems in compliance with the requirements of the contract for connection to the wholesale market trading system. In case of a failure to meet this requirement, the volumes of electric power actually consumed by buyers shall be deemed to be deviations and be paid for in accordance with Section XI of these Rules, and offers of suppliers for inclusion in the planned hourly generation in both the regulated sector (without taking into account the deviation sector) and in the free trade sector shall be satisfied after all the others.

16. Joint stock companies established in the process of restructuring of the organizations specified in Clause 15 of these Rules shall, as from the date of their state registration, become participants in those wholesale market sectors whose participant was the respective restructured organization in the procedure established by the federal body of executive power regulating natural monopolies.

17. An organization shall become a free trade sector participant by concluding a contract for connection to the wholesale market trading system and will be included in the register of wholesale market entities once the requirements established in Clause 14 of these Rules are met or the provisions of Clause 15 of these Rules are complied with. Suppliers and buyers of electric power in respect of which the trading system administrator confirmed that the requirements established in Clause 14 of these Rules are met shall become regulated sector participants on the basis of decisions of the federal body of executive power regulating natural monopolies in the procedure established by the Government of the Russian Federation.

18. If the volume of electric power acquired by a free trade sector participant in that sector is insufficient to cover its own planned hourly consumption, it shall be entitled to acquire the deficient volume of electric power (capacity) under a contract with an energy supply organization and (or) a guaranteeing supplier that, by the nature of their activities, conclude such contracts with everyone who approaches them. In doing so, pursuant to the said contract, the energy supply organization and (or) guaranteeing supplier shall be obliged to supply the electric power (capacity) generated or bought for the said participant in a volume ensuring its actual consumption (including the deficient volume of electric power (capacity) and render electric power transmission services in that volume, and the free trade sector participant shall be obliged to pay for the electric power (capacity) supplied by the energy supply organization and (or) guaranteeing supplier, value of deviations and services provided to it at respective tariffs approved in the established procedure. The value of a unit of electric power (capacity) acquired by a free trade sector participant outside the wholesale market shall be determined on the basis of a sum of the value of electric power assumed in setting tariffs and the value of capacity per volume of consumed electric power.

When the value of deviations of free trade sector participants that are not regulated sector participants is determined, tariffs for electric power (capacity) supplied by energy supply organizations to consumers shall apply, which tariffs shall be approved by bodies of executive power of the constituent entities of the Russian Federation in the field of state regulation of tariffs. These tariffs shall apply in accordance with the requirements of Section XI of these Rules.
19. If a free trade sector participant violates the requirements of Clause 14 of these Rules (with due regard to the specific features established by Clauses 15 and 16 of these Rules), the trading system administrator shall warn it of the need to remove such a violation. The trading system administrator may exclude such a participant from the register of free trade sector participants for repeated violations or a failure to meet the period for their remedy.

IV. Contract for Connection to the Wholesale Market Trading System

20. The terms and conditions of a contract for connection to the wholesale market trading system shall be determined by the trading system administrator in accordance with these Rules. The trading system administrator and the system operator shall sign a contract for connection to the wholesale market trading system for the purposes of ensuring the functioning of the technological and commercial infrastructure of the wholesale market. Pursuant to the terms and conditions of a contract for connection to the wholesale market trading system, the trading system administrator and the system operator shall provide services to wholesale market participants and possessors of electric power grid facilities. A contract for connection shall also provide for the procedure for interaction between the trading system administrator and the system operator, their rights and obligations. Amendments to a contract for connection to the wholesale market trading system shall be made in the procedure provided for by the said contract.

21. A contract for connection to the wholesale market trading system shall include the following material terms and conditions:

a) rights and obligations of the parties and procedure for their interaction;

b) content and procedure for payment of services provided by the trading system administrator to wholesale market participants, subject to the requirements of the normative legal acts regulating access to the services of the trading system administrator;

c) content and procedure for payment of services provided by the system operator to wholesale market participants, subject to the requirements of the normative legal acts regulating access to the services of the system operator;

d) procedure for conclusion and performance of contracts for purchase of electric power in the wholesale market;

e) mutual responsibilities of the parties;

f) grounds, terms, conditions and procedure for making amendments and (or) supplements to the contract, including the procedure for consideration of respective amendments by the managing bodies of the trading system administrator.

22. A contract for connection to the wholesale market trading system shall, inter alia, contain:

a) requirements for wholesale market participants for access to the trading system;

b) procedure for provision of access for a wholesale market participant to the wholesale market trading system, which includes:

·         procedure for execution of documents for confirmation that the offeror meets the requirements imposed on wholesale market participants, subject to the requirements of the normative legal acts regulating access to the services of the trading system administrator;

·         procedure for verification of documents submitted;

·         procedure for conclusion of a contract;

c) procedure for approval of delivery points (point group) and their attribution to calculation model nodes;

d) procedure for submission of offers by wholesale market participants, which includes:

·         procedure for submission of offers to the system operator in the form of a notice of the own planned hourly consumption and (or) of the readiness of the generating units of suppliers for work and transmission of that information to the trading system administrator;

·         procedure for submission of price offers to the trading system administrator;

e) procedure for determination of the amount and procedure for provision by wholesale market participants of a security for performance of electric power purchase contracts;

f) procedure for competitive selection of price offers, determination of equilibrium prices and volumes of electric power in the free trade sector as well as planned hourly generation, which includes:

·         procedure for interaction of the trading system administrator and the system operator; mathematical model of centralized calculation of equilibrium prices and volumes of electric power in the free trade sector and volumes of electric power (capacity) in the regulated sector;

·         procedure for taking records of bilateral purchase contracts in the free trade sector; list of information provided to wholesale market participants by the system operator and the trading system administrator upon the results of trading in electric power in the wholesale market;

g) procedure for changing technological operation modes of electric power industry facilities based on the requirement of minimizing the aggregate value of deviations, which includes:

·         procedure for interaction of the trading system administrator and the system operator for ensuring planned technological modes;

·         establishing criteria of minimizing the value of deviations; list of information on actual modes furnished by the system operator to the trading system administrator and wholesale market participants;

h) specific features of commercial metering, which relate to: procedure for collection of commercial metering data; procedure for calculation of actual volumes of generation/consumption of electric power and capacity in delivery points (point groups) of each participant over the calculation period;

i) procedure for determination of amounts and initiatives of deviations in accordance with the requirements of Section XI of these Rules;

j) procedure for determination of requirements for and obligations of wholesale market participants in the free trade sector, regulated sector and deviation sector;

k) procedure for making settlements in the wholesale market;

l) procedure for making amendments to the contract;

m) procedure and deadline for execution of the decision of the trading system administrator relating to removal of violations of these Rules by free trade sector participants as well as the procedure for their exclusion from the register of free trade sector participants;

n) procedure for control over compliance with these Rules, including control over actions of the system operator;

o) procedure for resolution of disputes between wholesale market entities, which procedure may envisage a procedure for pre-trial settlement of disputes.

23. In the procedure established by a contract for connection to the wholesale market trading system or a contract for purchase of electric power in the regulated sector, the value of a portion of unpaid volumes of electric power purchased in the free trade sector and (or) regulated sector (without taking into account the deviation sector) shall be determined in accordance with the requirements of Section XI of these Rules for deviations that occurred at the own initiative of the wholesale market participant.

V. Technological and Commercial Infrastructure of the Wholesale Electric Power Market

24. Wholesale market participants shall conclude contracts for provision of electric power transmission services with power grid organizations to whose grids they are technologically connected.

Electric power shall be transmitted via the unified national (All-Russian) electric power grid and territorial distribution grids on a payable contractual basis.

25. If possessors of electric power grid facilities are subject to the requirement of payment for electric power losses in electric power grids in the wholesale market in accordance with Section XIII of these Rules, they shall be obliged to conclude a contract for connection to the wholesale market trading system and make the said payment in accordance with the terms and conditions established by the said contract.

26. The operating dispatch control of technological operation modes of electric power industry facilities shall be exercised on a payable contractual basis by the system operator and other operating dispatch control entities in accordance with these Rules, other normative legal acts that regulate access to services and provision of operating dispatch control services, and a contract for connection to the wholesale market trading system.

27. The trading system administrator shall provide services related to organization of functioning of the wholesale market trading system to wholesale market participants on a payable contractual basis. Tariffs for the said services shall be established by the federal body of executive power regulating natural monopolies. The authorized federal body of executive power shall exercise control over the activities of the trading system administrator, including control over attraction of other organizations by the trading system administrator for the purposes of providing them with services related to organization of functioning of the wholesale market trading system.

VI. Specific Features of Organization of Trading in Electric Power in the Regulated Sector of the Wholesale Market

28. The system of trading in electric power in the regulated sector (without taking into account the deviation sector) shall be based on annual forecasted summary balances of generation and supplies of electric power (capacity) within the UES of Russia formed with participation of the system operator and trading system administrator by the federal body of executive power regulating natural monopolies. The said balances shall be formed on the basis of forecasts of volumes of consumption of electric power.

29. The federal body of executive power regulating natural monopolies shall establish tariffs for electric power (capacity) sold in the wholesale market (hereinafter referred to as regulated sector tariffs) for each regulated sector participant, with due regard to the formed forecasted summary balances of generation and supplies of electric power (capacity). Losses or additional incomes received by wholesale market participants from participation in relations connected with trading in electric power in the free trade sector and in the deviation sector shall not be taken into account in setting regulated sector tariffs and(or) in the retail market, except for the case specified in Clause 67 of these Rules.

Settlements shall be made in the regulated sector in respect of 85 percent of the installed generating capacity of each regulated sector participant supplying electric power and capacity. The volume of generating capacity of a regulated sector participant assumed in the calculations shall be adjusted with due regard to its performance of the planned volume of the operating generating capacity which is reflected in the revised forecasted summary balance of generation and supplies of electric power (capacity). Settlements shall not be made in the regulated sector in respect of the remaining 15 percent of the capacity of its participants. Settlements in the regulated sector for the installed generating capacity of electric power suppliers whose work is necessary to maintain the established technological parameters of functioning of the UES of Russia or to maintain the capacity reserves in the UES of Russia shall be made in full if incomes from their participation in the wholesale market fail to ensure the established level of economically substantiated costs. The list of the said suppliers shall be determined by the federal body of executive power regulating natural monopolies together with the federal body of executive power that performs the development and implementation of the state socioeconomic policies and by the federal body of executive power that pursues the state policies in the sphere of the fuel and energy complex of the Russian Federation.The aggregate installed generating capacity of electric power plants belonging to suppliers included in the list may not exceed 10 percent of the installed generating capacity of the UES of Russia. Specific features of participation of suppliers in the wholesale market connected with the terms and conditions of fuel purchase shall be taken into account in determining the list of suppliers.

Regulated sector participants purchasing electric power shall pay for the electric power and capacity purchased by them in the regulated sector (without taking into account the deviation sector) on the basis of the value of a unit of electric power in the regulated sector (hereinafter referred to as the price of electric power and capacity in the regulated sector) equal to the value of a unit of electric power increased by the value of the power consumed by the said participant per volume of consumption of the electric power. In doing so, the value of a unit of electric power and the value of consumed capacity shall be determined on the basis of tariffs for electric power (capacity) established for that buyer and the volumes of consumed electric power and capacity shall be determined in accordance with the approved forecasted summary balance of generation and supplies of electric power (capacity).

30. The minimum volume of sale of electric power in the regulated sector (without taking into account the deviation sector) at each hour for each supplier shall be 85 percent of the volume of generation of electric power planned in the preliminary dispatch schedule, subject to the requirement of Clause 8 of these Rules. The said requirement shall apply to the volume of generation of electric power by each generating facility of each supplier.

31. If, upon the results of competitive selection of price offers, the planned volumes of sale in the free trade sector and the minimum volumes of sale in the regulated sector in aggregate fail to ensure the planned hourly consumption of wholesale market participants, the trading system administrator shall determine the volumes of sale of electric power in the regulated sector (without taking into account the deviation sector) above minimum volumes. The volumes of sale in the regulated sector shall be determined taking into account price offers of suppliers and tariffs for electric power established for them by the federal body of executive power regulating natural monopolies. Subject to the provisions established by Clause 8 of these Rules, payment for the additional volume of electric power generated by the supplier in the regulated sector (without taking into account the deviation sector) shall be made at the tariff for electric power established for that supplier.

32. The volume of sale of electric power by a supplier in the regulated sector (without taking into account the deviation sector) shall be determined as a difference between its planned hourly generation and planned volume of sale in the free trade sector.

33. The volume of purchase of electric power by a wholesale market participant in the regulated sector (without taking into account the deviation sector) shall be determined as a difference between its planned hourly consumption and the volume of electric power acquired in the free trade sector by that participant and free trade sector participants serviced by it in the retail market.

VII. Organization of Trading in Electric Power in the Free Trade Sector

34. Trading in electric power in the free trade sector shall be ensured by conclusion of bilateral electric power purchase contracts by free trade sector participants and competitive selection of price offers, determining equilibrium prices for electric power and volumes of electric power to be included in the planned volumes of the free trade sector.

35. The marginal level of prices for electric power sold by generators in the wholesale electric power (capacity) market at non-regulated prices shall be set by the federal body of executive power regulating natural monopolies and be applied in case of excess of the lower of the prices specified in price offers for sale over the higher of the prices specified in price offers for purchase unless any price acceptance offer for purchase has been submitted.

36. If, while carrying out competitive selection of price offers, the trading system administrator records violations of requirements established by the contract for connection to the wholesale market trading system or identifies the impossibility to determine the volumes and(or) equilibrium prices that meet the requirements of Clause 48 of these Rules as well as in other cases provided for by the contract for connection to the wholesale market trading system, the trading system administrator shall make a decision that the sale (purchase) of electric power has not occurred in the free trade sector (including the sale (purchase) of electric power under bilateral purchase contracts) as a whole or in any limited territory. The grounds for making the said decision shall be considered by the supervisory board of the trading system administrator at the immediately following meeting. The responsibility of officials of the trading system administrator for making an unjustified decision shall be determined by the contract for connection to the wholesale market trading system.

VIII. Bilateral Contracts for Purchase of Electric Power in the Free Trade Sector

37. Each buyer shall be entitled to purchase up to 30 percent of the volume of its own planned hourly consumption of electric power under bilateral purchase contracts.

In the event that the aggregate volume of electric power specified in bilateral purchase contracts exceeds 30 percent of the own planned hourly consumption of the buyer, the trading system administrator shall be entitled to determine on its own the volumes of electric power (within the excess) that are not to be included in the planned volumes of the free trade sector. Bilateral electric power purchase contracts concluded by free trade sector participants shall be registered by the trading system administrator in the procedure determined by the contract for connection to the wholesale market trading system, for inclusion of the volumes of electric power specified therein in planned volumes of the free trade sector and for determination of financial obligations of wholesale market participants. When bilateral purchase contracts are registered, specific features of registration of bilateral purchase contracts concluded with due regard to the provisions of Clause 41 of these Rules shall be provided for.

38. A buyer of electric power that concluded a bilateral purchase contract shall be obliged to pay the value of electric power determined in the contract to the supplier of the electric power, irrespective of the planned volumes of purchase of electric power of that participant in the free trade sector unless otherwise established in the said contract or in the contract for connection to the wholesale market trading system.

39. If the planned volumes of sale of electric power by a supplier in the free trade sector are insufficient for performance of its obligations to supply electric power under bilateral purchase contracts, it shall be obliged to purchase the deficient volume of electric power in the free trade sector. If the parties to a bilateral purchase contract submit price acceptance offers for a volume of electric power specified in the contract, the volume of electric power shall be determined in the process of competitive selection of price offers, with due regard to the priority specified in Clause 52 of these Rules. If there is no possibility to include the said contractual volume in the planned volumes of the free trade sector as a result of competitive selection of price offers, the following specific features of making settlements for electric power in the free trade sector shall be established:

·         first and second priority suppliers shall be determined, whose volumes of generation of electric power were accepted instead of the said contractual volume;

·         equilibrium prices of electric power shall not be determined in the calculation model nodes to which the delivery point group of the supplier under the said contract relates, and delivery point groups of first and second priority suppliers shall not be determined; the value of volumes of electric power sold (purchased) in the said calculation model nodes by the supplier under the contract and first and second priority suppliers shall not be taken into account in calculation of financial obligations of participants in the free trade sector over the respective calculation period.

40. Sellers and buyers of electric power that concluded bilateral purchase contracts shall be obliged to pay for losses of electric power and the value of system constraints on the terms equal with all other free trade sector participants in the procedure determined by the contract for connection to the wholesale market trading system. The amount of payment shall be determined in the procedure established by the contract for connection to the wholesale market trading system on the basis of a difference between equilibrium prices in delivery point groups of the buyer and seller under each contract.

41. Free trade sector participants that concluded a bilateral electric power purchase contract shall pay for losses of electric power and shall not pay for the value of system constraints in the event that the delivery points of the parties under the contract and the volume of electric power specified in the contract meet the following requirements:

a) there are no material system constraints on the normal operation mode of the electric power grids between the seller's and the buyer's delivery points specified in the contract, which is confirmed by the system operator;

b) the said delivery points are in electric power grids with the nominal voltage class of no lower than 220 KV. In determining delivery points and amount of losses, the nominal voltage class shall be assumed to be the value of the primary nominal voltage of the substation to which the buyer is connected;

c) the length of power transmission lines calculated by the closest route connecting the said delivery points is no more than 80 kilometers;

d) the volume of own generation of electric power of the supplier in the delivery point allows it to ensure the buyer's planned hourly consumption specified in the contract.

42. Pursuant to the contract for connection to the wholesale market trading system, the bilateral purchase contract parties specified in Clause 41 of these Rules shall, at their own discretion, either pay for losses of electric power or compensate them by additional generation of electric power. The value and amount of the said losses of electric power shall be determined by way of calculation as a ratio of the value and amount of total losses in electric power grids of the respective nominal voltage class, which losses are taken into account in calculation of equilibrium prices in the free trade sector, to the aggregate stated capacity in the free trade sector. The value and amount of losses shall be calculated separately for territories determined by the federal body of executive power regulating natural monopolies for the purposes of calculation of a tariff for electric power transmission services via the unified national (All-Russian) electric power grid.

The system operator shall keep records of bilateral purchase contracts which specify delivery points and the volume of electric power that meet the requirements established by Clause 41 of these Rules, including the requirement relating to the absence of material system constraints. A system constraint shall not be deemed to be material for a bilateral purchase contract if it allows for ensuring a capacity flow in a volume necessary for performance of that contract and all bilateral contracts recorded by the system operator earlier, for which there are no material system constraints (without taking into account capacity flows that are not included in the said bilateral contracts).

For determination of whether system constraints are material for a bilateral purchase contract, only constraints on the capacity flow via electric power grids connecting delivery points of the parties to that contract shall be taken into account. Information on such constraints shall be public and be disclosed by the system operator and the trading system administrator.

IX. Competitive Selection of Price Offers and Determination of Equilibrium Prices and Volumes of Electric Power in the Free Trade Sector

43. Before the beginning of the day of the actual delivery of electric power acquired in the free trade sector, the trading system administrator shall carry out competitive selection of price offers. The said selection shall be made in the form of calculation of hourly equilibrium prices and volumes of electric power that are to be included in planned volumes of the free trade sector and to form obligations of participants under all contracts concluded in the free trade sector.

44. Price offers shall be submitted by free trade sector participants in respect of each delivery point (point group) for each hour of the day. Each free trade sector participant shall have the right to submit a price offer for a volume of electric power that does not exceed the marginal values established by Clause 6 of these Rules for the volumes of electric power sold (purchased) in the free trade sector.

45. When conducting competitive selection of price offers, the volumes of electric power specified in price acceptance offers shall be included in planned volumes of the free trade sector, except for the following cases:

a) absence of a technological possibility to make supplies of electric power in required volumes, taking into account the volumes of sale of electric power in the regulated sector;

b) excess of the volume of electric power specified in price acceptance offers of buyers (sellers) over the total volumes of electric power specified in price offers of sellers (buyers) respectively.
In the said cases, price acceptance offers shall be satisfied according to the priority determined in Clause 52 of these Rules.

46. When conducting competitive selection of price offers, the trading system administrator shall take into account the following information submitted by the system operator:

a) calculation model that is effective (actual) for the trading day;

b) information on constraints of operation modes of hydro electric power plants;

c) information on the amount and territorial location of capacity reserves or requirements for capacity reserves;

d) preliminary dispatch schedule;

e) schedules of planned repairs of generating units and electric power grid facilities;

f) volumes of export/import of electric power.

47. When conducting competitive selection of price offers, the trading system administrator shall, with the observance of the constraints specified in Clause 6 of these Rules and in the procedure established by the contract for connection to the wholesale market trading system, be obliged to include in planned volumes of the free trade sector the volumes of electric power for which the lowest price of electric power is specified in the price offers of suppliers and the volumes of electric power of buyers for which the highest price of electric power is specified in the price offers of buyers, provided that there is a demand (supply) for the electric power of the said suppliers (buyers) with due regard to the value of losses and system constraints.

48. The equilibrium price of electric power shall be set for each hour of the planned day and for each calculation model node with the observance of the following mandatory terms and conditions:

a) equilibrium prices shall be equal for all volumes of electric power whose delivery point is attributable to the same calculation model node;

b) equilibrium price for a supplier of electric power may not be lower than the price specified by it in the price offer for the volume of electric power attributable to the respective calculation model node and included by the trading system administrator in the planned volumes of the free trade sector;

c) equilibrium price for a buyer of electric power may not be higher than the price specified by it in the price offer for the volume of electric power attributable to the respective calculation model node and included by the trading system administrator in the planned volumes of the free trade sector. Equilibrium prices shall reflect the value of system constraints and the amount of electric power losses that depend on the electric power industry modes. The volumes of electric power included by the trading system administrator in the planned volumes of the free trade sector upon the results of competitive selection of price offers shall be established for each hour of the planned day and for each delivery point group.

49. Price offers submitted in respect of delivery points relating to the same price zone, taking into account the volumes of electric power flows between the zones, shall be compared in each price zone established by the Government of the Russian Federation when conducting competitive selection of price offers. In doing so, equilibrium prices shall be set for each calculation model node of each price zone.

50. If financial obligations of buyers exceed financial obligations of suppliers in the free trade sector upon the results of the calculation period, including through using the restricted throughput capacity of the electric power grid, the amount of the excess shall be taken into account in making the final calculation upon the results of the calculation period by reducing the financial obligations of buyers in proportion to the total volume of electric power purchased by them during the respective calculation period in the free trade sector.

51. The procedure for calculation of equilibrium prices and planned volumes of the free trade sector shall be established in the contract for connection to the wholesale market trading system.

X. Special Cases of Calculation of Equilibrium Prices in the Free Trade Sector

52. The volumes of generation of electric power stated in price acceptance offers and(or) under bilateral contracts shall be included in planned volumes of the free trade sector according to the following priority:

a) as a first priority, there shall be included the volumes of electric power specified in price acceptance offers for sale and generated:

·         with the use of generating capacities determined by the system operator as those ensuring the system reliability (system generators) in accordance with Clause 54 of these Rules;

·         at nuclear power plants in volumes meeting the requirements of the technological regulations of operation of nuclear power plants and other normative legal acts of the Russian Federation on the use of nuclear power as well as norms and rules;

b) as a second priority, there shall be included the volumes of electric power specified in price acceptance offers for sale and generated by:

·         thermal electric power plants in a volume corresponding to generation of electric power in a co-generation mode;

·         hydro electric power plants in a volume necessitated by technological reasons and (or) the need of ensuring the environmental safety;

c) as a third priority, there shall be included the volumes of generation of electric power allocated by wholesale market participants for performance of their obligations under bilateral electric power purchase contracts, including contracts for export and import transactions;

d) as a fourth priority, there shall be included all other volumes of generation of electric power specified in price acceptance offers.

The volumes of electric power included in planned volumes of the free trade sector as a first and second priority shall be allocated for performance of bilateral contracts if so specified in the price acceptance offer.

If third priority volumes of generation were not included in full in the planned volumes of the free trade sector for the reason of satisfaction of first and second priority volumes, the procedure for determination of prices and calculation of financial obligations established in Clause 39 of these Rules shall apply.

53. If demand exceeds supply in the free trade sector, the equilibrium price of electric power shall be assumed to be equal to the lower of the prices specified in price offers of buyers for the volume of electric power included in planned volumes of the free trade sector.

This Clause shall not apply to the cases specified in Clause 52 of these Rules.

54. Generating capacities ensuring the system reliability (system generators) shall be understood in these Rules as generating facilities without whose special operation mode it is impossible to ensure the operation modes of the UES of Russia with the preset reliability parameters due to their location in the electric power grid or unique characteristics (rate of load drop/load increase). System generators shall, inter alia, ensure:

·         maintenance of the voltage level in the grid;

·         provision of the necessary volume of the throughput capacity of the grid;

·         provision of the rate of change of generation volumes of electric power corresponding to the rate of change of consumption volumes of electric power in the UES of Russia.

XI. Organization of Trading in Electric Power in the Deviation Sector

55. The amount of the value of deviations shall be calculated for each hour by the trading system administrator in accordance with these Rules and the methodology approved by the federal body of executive power regulating natural monopolies for calculation of the value of deviations of the volumes of actual generation (consumption) of electric power of wholesale market participants from the volumes of their planned hourly generation (consumption), which methodology shall be based on tariffs for electric power (capacity) and be increased (reduced) depending on the reason for the deviation. The said methodology shall include the amounts of normative deviation levels and coefficients uniform for all wholesale market participants, which take into account the reason for deviations (at the wholesale market participant's own initiative or for a reason beyond the control of the wholesale market participant, which is caused, among other things, by actions of other wholesale market participants, possessors of electric power grid facilities, trading system administrator or system operator).

The value of deviations shall be calculated for deviations whose amount exceeds the normative level (levels).

56. Payment for deviations shall be formed by applying increasing (reducing) coefficients to regulated sector tariffs set in accordance with the methodology specified in Clause 55. In doing so, the following regulated sector tariffs shall be used:

a) for suppliers:

·         that increased the volume of generation of electric power other than at their own initiative, the tariff for electric power approved for that participant, with due regard to capacity;

·         that reduced the volume of generation of electric power other than at their own initiative, the tariff for electric power approved for that participant;

·         that increased the volume of generation of electric power at their own initiative, deviations shall not be paid for;

·         that reduced the volume of generation of electric power at their own initiative, the higher of the tariffs for electric power, with due regard to the capacity in the regulated sector, set for suppliers that generate electric power at a respective hour;

b) for buyers:

·         that increased the volume of consumption of electric power at their own initiative or reduced the same other than at their own initiative, the price of electric power and capacity in the regulated sector;

·         that increased the volume of consumption of electric power other than at their own initiative or reduced the same at their own initiative, the tariff for electric power approved for that participant.

Tariffs set in respect of a generating facility of a wholesale market participant in whose delivery point group respective deviations are recorded shall be used as regulated sector tariffs specified in this Clause.

The tariff for electric power specified in this Clause, with due regard to capacity, shall be determined for a supplier as a sum of the tariff for electric power of the supplier and the amount equal to the ratio of the product of the generating capacity and the tariff for the generating capacity of that supplier to the volume of electric power included in the forecasted summary balance of generation and supplies of electric power (capacity) for that supplier.

If any of the tariffs for purchase (sale) specified in this Clause is not set for a regulated sector participant, the tariff approved by the federal body of executive power regulating natural monopolies, which is effective on the date of entry into force of these Rules, shall apply.

57. Payment for deviations shall be determined for each of the cases specified in Clause 56 of these Rules, with due regard to the coefficients specified in Clause 55, which take into account the reason for which the deviation was committed:

a) if deviations occurred at the initiative of the wholesale market participant, the coefficients under which the payment of the value of deviations increases expenses (reduces incomes) of that participant in comparison with the value of electric power in the regulated sector (without taking into account the deviation sector) shall apply;

b) if deviations occurred other than at the initiative of the wholesale market participant, the coefficients under which the payment of the value of deviations increases incomes (reduces expenses) of that participant in comparison with the value of electric power in the regulated sector (without taking into account the deviation sector) shall apply.

For the payment of deviations caused by provision of services by a wholesale market participant in accordance with the requirements of Section XV of these Rules, the federal body of executive power regulating natural monopolies shall set special coefficients which reflect not only the reason for deviations but also the nature of the service in the provision of which the said deviations occurred.

58. If the volume of the actual deviation during an hour does not match the volume of the deviation that occurred other than at the initiative of the wholesale market participant, the volume of the deviation at its initiative shall be determined as a difference of the volume of the actual deviation and the deviation that occurred other than at the initiative of the wholesale market participant. The said deviations shall be determined in respect of each delivery point group.

59. If the total obligations of the regulated sector participants in the deviation sector to pay for deviations differ from the total claims to pay for deviations, the said difference shall be taken into account in drafting the final calculation upon the results of the calculation period by adjusting the obligations of all wholesale market participants in proportion to the total volume of electric power purchased (sold) by them in the respective calculation period in the regulated sector (without taking into account the deviation sector) and in the free trade sector.

60. The value of deviations shall be calculated for a free trade sector participant that is not a regulated sector participant in accordance with Clause 55 of these Rules by applying the tariff for electric power (capacity) set for it by the body of executive power of the constituent entity of the Russian Federation in the field of state regulation of tariffs.

61. The system operator shall manage technological operation modes of electric power industry facilities and power receiving installations of consumers so as to ensure the minimum possible value of electric power compensating deviations of wholesale market participants with the observance of the standards of the system reliability and quality of electric power.

62. The system operator shall keep records of dispatch commands issued to market participants, of initiatives of wholesale market entities (possessors of electric power grid facilities, trading system administrator and system operator) as well as of changes of system constraints which entailed deviations.

The system operator shall submit the said information to the trading system administrator and wholesale market participants in accordance with the contract for connection to the wholesale market trading system.

XII. Specific Features of Participation of Individual Categories of Suppliers and Buyers of Electric Power in Relations Connected with Trading in Electric Power in the Wholesale Market

63. Suppliers participating in the free trade sector shall have the right to submit only price acceptance offers in respect of the volumes of electric power generated at hydro electric power plants, which does not deprive them of the right to conclude bilateral electric power purchase contracts.

64. Participation of energy and electricity joint stock companies in the wholesale market shall be carried out in accordance with the following specific features:

a) planned and actual operation modes of electric power plants that are part of energy and electricity joint stock companies as well as volumes of sale (purchase) of electric power in the free trade sector and in the deviation sector shall be established and sold separately by the volumes of generation and by the volumes of consumption of electric power of that energy and electricity joint stock company and in accordance with the rules common for all wholesale market participants;

b) an energy and electricity joint stock company shall submit separate price offers for supply and for purchase of electric power to the trading system administrator for participation in competitive selection of price offers in the free trade sector;

c) the volume of sale (purchase) of electric power and capacity by energy and electricity joint stock companies in the regulated sector (without taking into account the deviation sector) shall be equal to the difference of the volumes of sale and purchase of electric power in the regulated sector (without taking into account the deviation sector) determined in accordance with these Rules and summed up for the calculation period;

d) for the purposes of planning and maintaining technological modes of generation and consumption of electric power as well as for the purpose of determining equilibrium prices of sale and purchase of electric power in the free trade sector and determining the value of deviations in the deviation sector, an energy and electricity joint stock company shall be considered as two separate participants – supplier and buyer.

65. Organizations that conduct export and import transactions and are regulated sector participants but are not free trade sector participants shall sell (purchase) electric power in the volumes of planned hourly generation (consumption) necessary for performance of contracts under which such transaction are made in the regulated sector (without taking into account the deviation sector).

Deviations that occurred in the said organizations as a result of performance of contracts under which export and import transactions are made, which contracts are concluded before the date of entry into force of these Rules shall be summed up for all delivery points relating to a separate contract as well as for hours (days) of the calculation period.

66. The following specific features of participation in the wholesale market shall be established for organizations that possess consumption facilities and generating facilities and are not regulated sector participants:

a) delivery points in the wholesale market shall coincide with delivery points in the retail market (a location in the electric power grid used to determine and perform obligations by a retail market participant);

b) if such organizations sell electric power in the free trade sector, the requirements of these Rules established for electric power suppliers shall apply to them;

c) if such organization purchase electric power in the free trade sector, the requirements of these Rules established for electric power buyers shall apply to them.

The said requirements shall not apply to the volume of electric power used for internal consumption.

67. The federal body of executive power regulating natural monopolies shall determine the volume of funds necessary for ensuring the activities and performance of obligations of the operating organization of nuclear electric power plants of Rosenergoatom Concern. If there is a lack of funds due to the existing prices of electric power in the free sector, their deficiency shall be compensated by the respective increase of the tariff for generating capacity in the regulated sector of the wholesale market.

XIII. Procedure for Payment of Losses of Electric Power by Power Grid Organizations

68. Losses of electric power that are not taken into account in tariffs (prices) for electric power in the regulated sector and in the free trade sector shall be paid in the wholesale market by possessors of electric power grid facilities participating in the wholesale market.

69. Until power grid companies established on the basis of electric power grids of energy and electricity joint stock companies are formed, the said joint stock companies shall compensate losses of electric power at the expense of their own generation of electric power and (or) pay for losses in the wholesale market in the composition of tariffs (prices) for electric power in the regulated sector and in the free trade sector.

70. Losses of electric power in any electric power grids, irrespective of their owner, which are not taken into account in tariffs (prices) for electric power in the regulated sector and in the free trade sector as well as in the volumes of the actual hourly consumption of wholesale market participants shall be paid in the wholesale market at regulated sector tariffs by the organization managing the unified national (All-Russian) electric power grid. The expenses of payment of the said losses shall be compensated to the organization managing the unified national (All-Russian) electric power grid by other possessors of electric power grid facilities in the process of making mutual settlements.

XIV. Specific Features of Commercial Metering of Electric Power

71. Specific features of commercial metering of electric power in delivery points shall be determined by these Rules, other normative legal acts and a contract for connection to the wholesale market trading system, with due regard to the following requirements:

a) data of measurements made with the help of commercial metering facilities which ensure the storage of measurement data (interval metering) shall be used to determine actual hourly volumes of supply (consumption) of electric power;

b) if there are no interval metering facilities to determine actual hourly volumes of supply (consumption) of electric power, the data of measurements made with the help of commercial metering facilities which ensure the metering of electric power totally at a certain time (integral metering) shall be used.

When integral metering is used, mathematical methods shall be applied on the basis of data of operational metering complex of the system operator (if any) or schedules of consumption (generation) of electric power agreed upon by the system operator. In doing so, the amount of actual hourly volumes of consumption of electric power over a calculation period shall in total be equal to the indicators obtained using the integral metering.

72. The trading system administrator shall ensure the creation of a commercial metering system that ensures the obtaining of balanced data on actual generation (consumption) of electric power in the wholesale market with due regard to losses.

XV. Payment of Other Services Provided by Participants in the Wholesale Market

73. Services related to ensuring the operational capacity reserve, maintaining the frequency in the system, ensuring control over voltage and reactive capacity shall be provided by wholesale market participants in the free trade sector and in the regulated sector (without taking into account the deviation sector) during the transitional period.

74. Services related to ensuring the operational capacity reserve in the free trade sector shall be paid to suppliers whose volumes of sale of electric power in the free trade sector are restricted due to the need to reserve a portion of the capacity. If the said portion of the generating capacity is not used in the deviation sector, the value of such a service shall be determined by the trading system administrator for the respective hour of the planned day as a product of the volume of electric power generated with the use of the said portion of the generating capacity and the amount of excess of the equilibrium price in the calculation model node to which the delivery point group of that participant relates over the price specified by it in the offer.

75. Suppliers of the services specified in Clause 73 of these Rules shall be selected by the system operator together with the trading system administrator on the basis of minimizing their total value.

76. Special coefficients specified in Clause 57 of these Rules shall be used to calculate the value of deviations of load-controlled consumers caused by provision of services in the wholesale market by them.

ANNEX

to Decree No. 643, Dated October 24, 2003
of the Government of the Russian Federation

L I S T
of Constituent Entities of the Russian Federation Whose Territories Are United into the Price Zone of the Wholesale Electric Power (Capacity) Market of the Transitional Period

Republic of Adygeia, Republic of Bashkortostan, Republic of Dagestan, Republic of Ingushetia, Kabardino-Balkaria Republic, Republic of Kalmykia, Karachaevo-Cherkesia Republic, Republic of Karelia, Republic of Mari El, Republic of Mordovia, Republic of North Osetia – Alania, Republic of Tatarstan, Udmurtia Republic, Chechen Republic, Chuvashia Republic

Krasnodar Krai, Stavropol Krai

Astrakhan Oblast, Belgorod Oblast, Bryansk Oblast, Vladimir Oblast, Volgograd Oblast, Vologda Oblast, Voronezh Oblast, Ivanovo Oblast, Kaluga Oblast, Kirov Oblast, Kostroma Oblast, Kurgan Oblast, Kursk Oblast, Leningrad Oblast, Lipetsk Oblast, Moscow City, Moscow Oblast, Murmansk Oblast, Nizhniy Novgorod Oblast, Novgorod Oblast, Orenburg Oblast, Orel Oblast, Penza Oblast, Perm Oblast, Pskov Oblast, Rostov Oblast, Ryazan Oblast, Samara Oblast, St.-Petersburg City, Saratov Oblast, Sverdlovsk Oblast, Smolensk Oblast, Tambov Oblast, Tver Oblast, Tula Oblast, Tyumen Oblast, Ulyanovsk Oblast, Chelyabinsk Oblast, Yaroslavl Oblast,

Komi-Perm Autonomous Okrug, Nenetsk Autonomous Okrug, Khanty-Mansiisk Autonomous Okrug, Yamalo-Nenetsk Autonomous Okrug

Moscow,
October 28, 2003,
No. 18