Major Electricity Market Liberalisation Objectives:
To allow customers a possibility to ensure electricity supply according to their individual needs at easily and clearly comparable, transparent prices, freely choose their electricity supplier. To create effective competitive environment among electricity producers, importers and suppliers.
Lithuanian Electricity Market Development Plan:
On 21 December 2009, Republic of Lithuania Law on Amending and Supplementing the Law on Electricity providing for that the regulated electricity supply tariffs will not be applicable for the objects of non-household electricity customers with the below permissible power was adopted:
• On 31 July 2009 (or later) was equal or higher than 400 kW – as of 1 January 2010;
• On 31 July 2010 (or later) is equal or higher than 100 kW – as of 1 January 2011;
• On July 2011 (or later) is equal or higher than 30 kW – as of 1 January 2012;
• as of 1 January 2013, the regulated electricity tariffs will be applied only to household electricity customers.
Operation of the Electricity Market:
Electricity market means all relations between the market participants covering wholesale and retail trade in electricity and provision of system services based on the principles of legality and equal treatment, by applying the regulated third party access principle.
Wholesale trade in electricity means trade in electricity according to bilateral agreements and trade in electricity on the Exchange:
• The Exchange means a location and environment of wholesale trade in electricity where the members of the Exchange registered by a market operator trade in electricity making offers to purchase and/or sell electricity.
• Bilateral agreements mean long-term contracts on purchase/sale of electricity (i.e. not shorter than concluded for 1 (one) calendar month) concluded directly between suppliers and producers.
Retail trade in electricity means trade in electricity conducted by the suppliers with the customers under the conditions and procedure established in the Electricity Supply and Consumption Rules.
Electricity generation, transport and supply services are classified according to the types of activities; therefore, electricity generation and supply to the end customer is carried out in competitive/market conditions; customers are allowed to freely choose electricity supplier that will offers the best price and service quality service and replace a supplier that failed to meet their expectations with another supplier; electricity transport remains the activity governed by the State.
Electricity market operates like any other market: electricity is generated by power generation plants that sell their production in the common wholesale market of electricity suppliers and producers, electricity is supplied by the companies possessing the supplier’s license that purchase electricity in the wholesale market from the producers and sell it to the customers, electricity is transported by the companies that possess transport and distribution licenses.
Participants of the Electricity Market:
Market operator means any legal person responsible for the organisation of trade in electricity and possessing an appropriate licence to perform the activity.
Market participants mean any persons registered in the database of the market operator purchasing and/or selling electricity in the wholesale electricity market in the manner prescribed by the Electricity Trading Rules.
• Eligible customer means a customer who is free to choose a supplier in compliance with the procedure laid down in the Law on Electricity. As of 1 July 2007, all customers will are considered to be eligible customers;
• Independent supplier means a person providing supply services to the eligible customers and possessing an appropriate licence to perform the activity.
• Public supplier means a person obliged to supply electricity to the customers within the territory specified in the activities licence specified in Article 25 of the Law Amending and Supplementing the Law on Electricity of 21 December 2009 No XI-641 and ensure electricity supply to the customers in case their independent supplier fails to fulfils its obligations to supply electricity and they cannot choose another independent supplier;
• Distribution system operator means a legal person responsible for the management, operation, maintenance and development by ownership or any other right distribution networks in the territory specified in its activities licence with regard to the needs of the distribution network users.
•Transmission system operator means any legal person managing the transmission network by ownership right or any other right who performs the functions of national balancing and system service provision:
National balancing function means ensuring balance between electricity generation and consumption according to the criteria of system reliability and quality of supplies at the electricity system level;
System services means services ensuring a secure and reliable operation of energy system, prevention and liquidation of system failures and disturbances, the required capacity reserve and electricity transmission capability through transmission networks within the limits set for electricity supply quality and reliability;
Regulating energy means electricity purchased and/or sold by order of the transmission system operator’s dispatch centre, which is needed for the performance of the national balancing function.
• Supplier of balancing electricity means any person trading in balancing electricity according to the contract concluded with a transmission system operator. Balancing electricity means electricity which is consumed/not consumed by customers or generated/not generated by producers in derogation from the quantities of electricity planned in the schedules drawn up adhering to the requirements referred to in the Electricity Trading Rules approved by the Ministry of Energy.
Frequently Asked Questions:
What companies in Lithuania possess an independent electricity supplier licence?
Independent electricity supplier licenses are issued and the activity of independent electricity suppliers is controlled by the National Control Commission for Prices and Energy. The lists of licensed independent electricity suppliers are available on the website of the National Control Commission for Prices and Energy: www.regula.lt
What actions should be performed before choosing an independent electricity supplier?
Any customer within the territory specified in the activities license must notify the distribution system operator/public supplier (recommended notification form to be filled in is available here) of the entry into force (or termination) of the contract on purchase/sale of electricity concluded with an independent supplier in a written form not less than 30 calendar days before such entry into force (or termination). The independent supplier must also notify the distribution system operator/public supplier of this fact not less that before 30 calendar days. On the day of the termination of the contract, a customer must take the electricity meter reading and provide such reading and other information necessary for final settlement to the distribution system operator/public supplier. A customer must conclude a contract for electricity transport service (contractual conditions are available here) with the distribution system operator.
Is it possible not to choose an independent electricity supplier?
The Law Amending and Supplementing the Law on Electricity of the Republic of Lithuanian adopted on 21 December 2009 provides for that the public electricity tariffs will not be applied to the objects of customers with the permissible power of connection to the electricity distribution network on 31 July 2009 (or later in the event an object is connected later) was equal to or higher than 400kW as of 1 January 2010: you must choose an independent electricity supplier. In case your company does not choose an independent electricity suppler, the VST, AB will further ensure electricity supply to you in accordance with the provisions of the Law on Electricity of the Republic of Lithuania for the period established in the legal acts (till 1 July 2010).
The electricity prices applicable for such customers will be equal to the aggregate of the actual purchasing price of electricity consumed by public supplier's customers, prices of electricity transport and public supply services.
How the charges for electricity will be calculated in case of choosing an independent electricity supplier?
In case of choosing an independent supplier, the transport service price for electricity transport approved by the National Control Commission for Prices and Energy will be applied by the VST, AB for the object (objects) supplied with electricity by an independent supplier. An independent supplier will apply the electricity supply price referred to in the mutual contract concluded with the customer for the electricity amount purchased for a customer's object.
How the charges for electricity will be calculated in case of not choosing an independent electricity supplier?
The final electricity price for the objects that will not choose an independent electricity supplier will consist the an aggregate of the following prices: the price of electricity transport service and public supply service approved by the National Control Commission for Prices and Energy and the actual purchase price of electricity. A customer will find out the actual purchase price of electricity upon receipt of the bill at the expiration of the reference month.
What supplier will supply electricity to me in case an independent supplier is not willing or able to supply electricity to the object belonging to me with the permissible power equal to or higher that 400 kW?
Public supplier must ensure electricity supply to the customers within the territory specified in the license issued to it in case their current independent supplier fails to fulfil its obligation to supply electricity and they cannot choose another independent supplier. In such case, electricity supply is ensured for the period not longer than 3 months and the electricity price applicable for such customers is equal to the aggregate of the purchase price of the actual electricity supplied by public supplier, electricity transport price and price of public supply services.