OREANDA-NEWS. July 30, 2012. A Court pronounced legitimacy of a 7-million Ruble fine imposed by the Federal Antimonopoly Service (FAS Russia) upon “Krasnoyarsk Energy Company” Ltd. (“KREK” Ltd.), reported the press-centre of FAS Russia. 

On 23rd July 2012, the Federal Arbitration Court of the East-Siberian District upheld the determination of the Antimonopoly Service to hold “KREK” Ltd. administratively liable and impose a turnover fine – over seven million Rubles.

The Federal Antimonopoly Service (FAS Russia) fined the company for unreasonably refusing to conclude a contract for technological connection by redistributing capacity. Under the Rules for Technological Connection, “Montazh-Stroi” Ltd. and “Krasnoyarsk Towed Vehicles Plant” OJSC notified “KREK” Ltd. about the concluded agreement and forwarded a request on calculating the costs of design-built technological connection (with necessary appendixes). The network organization, however, refused the companies’ request.

FAS found such actions of “KREK” Ltd. unreasonable and in May 2011 recognized that the company violated Part 1 Article 10 of the Federal Law “On Protection of Competition”.

The Antimonopoly Service issued a determination to eliminate the violations and fined the company over seven million Rubles.

In May 2012 “KREK” Ltd. paid the fine in full; however, it continued challenging the administrative sanctions at Court.

The Court found the arguments put forward by the company unreasonable and upheld the turnover fine imposed by FAS upon “KREK” Ltd.

The case on refusing to redistribute capacity made a precedent for us. We faced such violations for the first time. Unfortunately, the companies that have dominant to market position are not always prepared to soberly evaluate the situation and observe the rules established by the law. As is commonly known, the company paid the multi-million fine and challenged it. It is very important for us that the Courts supported us in this question. We hope that our practice of resolving such issues will serve as an example for other market participants, and violations in electric power industry will decrease considerably”, commented the Head of FAS Department for Control over Electric Power Industry, Vitaly Korolyov.

Reference:

Part 1 Article 10 of the Federal Law “On Protection of Competition” prohibits actions (omissions) of a dominant economic entity that lead or can lead to preventing, restricting, eliminating competition and (or) infringing interests of other persons.

Under Clause 34 of the Rules for Technological Connection, petitioners (except the persons specified in Clause 12.1 of the Rules, whose connected capacity of energy-receiving devices is up to 15 kW inclusive, petitioners specified in Clauses 13 and 14 of the Rules, as well as petitioners connected to the facilities of the United National (All-Russian) Grid Company, petitioners that have not paid for technological connection or have not paid for technological connection in full), that own or possess on any other legal basis energy-receiving devices, that were technologically connected to according to the established procedures before 1st January 2009 to electric networks, can upon an agreement with other owners of energy-receiving devices reduce the volume of connected capacity (surplus, unlocked energy-saving potential, etc.) of their own energy-receiving devices with simultaneous redistribution of the volume of reducing connected capacity to the benefit of other owners within the limits of operation of the relevant main substation.