Text consolidated by Valsts valodas centrs (State
Language Centre) with amending laws of:
10 April 2008 [shall come
into force from 15 May 2008];
8 July 2011 [shall come into force from 11 August
2011];
10 October 2013 [shall come into force from 1 January
2014];
6 November 2013 [shall come into force from 1 January
2014];
20 March 2014 [shall come into force from 1 April
2014];
18 September 2014 [shall come into force from 1 January
2015];
17 December 2014 [shall come into force from 1 January
2015];
4 June 2015 [shall come into force from 14 August
2015];
17 September 2015 [shall come into force from 1 January
2016];
30 November 2015 [shall come into force from 1 January
2016];
19 May 2016 [shall come into force from 22 June
2016].
If a whole or part of a section has been amended, the
date of the amending law appears in square brackets at
the end of the section. If a whole section, paragraph or
clause has been deleted, the date of the deletion appears
in square brackets beside the deleted section, paragraph
or clause.
|
The Saeima1 has adopted and
the President has proclaimed the following Law:
Electricity
Market Law
Chapter I
General Provisions
Section 1. Terms Used in this
Law
(1) In this Law the same terms as in the Energy Law are used
unless it has been laid down otherwise in this Law.
(2) The following terms are used in this Law:
1) aggregator - a merchant whose commercial activity is
the provision of the demand response service;
2) protected user - a poor or low-income family
(person), a large family or a family (person) which takes care
for a child with disability, or a person with the group I
disability who uses electricity in his or her household for his
or her own needs (for final consumption);
3) trade service of protected user - trade of
electricity to a protected user;
4) balancing - an organised process for ensuring
balance between electricity consumption and production in the
electricity system;
5) balancing service - a service by which the
responsibility of an electricity market participant is ensured
regarding that the amount of electricity sold in each interval of
trade conforms with the amount of electricity supplied and the
amount of electricity purchased conforms with the amount of
electricity received;
6) electricity exchange - an electricity trading
platform in the Republic of Latvia, where within the framework of
the bidding area or between separate bidding areas participants
of the electricity exchange buy and sell electricity through
offers and demands. Trade of electricity shall also include the
physical transmission of electricity;
7) participant of the electricity exchange - an
electricity market participant who has entered into an agreement
with an electricity market operator regarding the trade of
electricity. In the cases specified in this Law an electricity
exchange participant can also be an electricity system
operator;
8) electricity exchange regulation - electricity
exchange regulations and procedures binding on an electricity
exchange participant;
9) transmission of electricity - transportation of
electricity which does not include the trade of electricity in an
interconnected high-voltage system in order to supply energy
customers with electricity;
10) electricity producer - a natural person or a legal
person, who produces electricity;
11) distribution of electricity - transportation of
electricity which does not include the trade of electricity in a
medium- and low-voltage distribution system in order to supply
energy customers with electricity;
12) electricity system participants - electricity
producers, a transmission system operator, a distribution system
operator and final customers;
13) electricity system owner - a merchant, which is
part of a vertically integrated electricity undertaking and which
has an electricity transmission system in its possession;
14) electricity system operator - a licensed capital
company, which provides a system service;
15) electricity market operator - a legal person who
organises an electricity exchange in which the participants
thereof buy and sell electricity and ensures the connection of
the electricity market of the same and the next day with a market
of another Member State of the European Union with electricity
system of which an international connection is made;
16) trade in electricity - commercial activity which
includes purchasing electricity for sale and selling electricity
to the energy customers;
17) electricity trader - a merchant (a branch of a
foreign merchant) whose commercial activity is trade in
electricity, including provision of the aggregator's
services;
18) electricity market participants - producers,
traders, aggregators and final customers of electricity who
operate in the electricity market in accordance with the
principle of voluntary participation;
19) co-generation - a technological process in which
electricity and thermal energy is generated concurrently for
efficient utilisation;
20) implicit auction - cross-border interconnection
congestion management and method for the prevention of
congestion, by means of which an electricity market participant
acquires the right to transmit electricity in a specified amount
from one bidding area to another area;
21) mandatory procurement - a duty to procure
electricity specified in this Law and other laws and
regulations;
22) ancillary services - services which are required
for the provision of balanced operation of the electricity
transmission system, including the demand response service;
23) demand response - temporary changes of the
electricity usage profile which the customer has committed to
make voluntarily by reducing the electricity consumption in the
cases provided for in the agreement entered into with the
aggregator, for example, in the moments when the demand for the
electricity is high, the market price is high or the network is
congested;
24) demand response service - aggregation of the amount
of electricity unused due to the demand response of several
(different) customers in order to sell it in electricity exchange
markets, to other participants of the electricity market or the
system operator;
25) public trader - an electricity trader, which has
been assigned special duties and requirements in this Law and
other laws and regulations for ensuring the performance of the
public trader duties;
26) system service - transmission or distribution of
electricity, which ensures the flow of electricity from producers
to customers;
27) cross-border interconnection - an electric line,
which connects transmission systems located in different
states;
28) explicit auction - cross-border interconnection
congestion management and method for the prevention of
congestion, by means of which an electricity market participant
shall acquire the right to use electricity in a specified amount
from the cross-border interconnection capacity auctioned by an
electricity transmission system operator;
29) direct line - an electric line, which links a
solitary electricity production object with a solitary customer,
or an electric line, which links a solitary electricity producer
with a trader who directly supplies the objects, associated
undertakings in the ownership or possession thereof and the
customers;
30) bidding area - the area of mutual transactions by
electricity market participants or submissions of electricity
trade tenders by electricity exchange participants in the licence
operation zone of the electricity transmission system
operator;
31) universal service - guaranteed right to a supply of
electricity of a certain quality for a price which may be easily
and clearly compared and revised;
32) vertically integrated electricity undertaking - an
undertaking or a group of undertakings (an enterprise group),
which performs at least one of the following energy supply
activities - transmission or distribution of electricity - and at
least one of the following energy supply activities - production
or trade of electricity; and
33) general authorisation conditions - the requirements
laid down for an electricity producer and electricity trader,
which include specific electricity production and trading
conditions.
[10 April 2008; 8 July 2011; 6
November 2013; 18 September 2014; 17 December 2014; 17 September
2015; 19 May 2016]
Section 2. Purpose of this Law
The purpose of this Law is:
1) to establish prerequisites for the operation of an
efficiently functioning electricity market;
2) to ensure that, taking into account the requirements of
laws and regulations, all energy customers (hereinafter - the
customers) are provided with electricity in a safe and
qualitative manner, in the most efficient possible way for
justified prices;
3) to ensure all customers with the right to choose an
electricity trader freely;
4) to promote the production of electricity by using renewable
energy resources;
5) to promote energy independence ensuring different suppliers
of energy resources necessary for production of electricity.
[10 April 2008; 19 May 2016]
Section 3. Scope of the Application
of this Law
(1) This Law governs the types of activities to be performed
in the electricity market, which shall include the production of
electricity, transmission of electricity (hereinafter -
transmission), distribution of electricity (hereinafter -
distribution), trade of electricity as a free circulation
commodity and the provision of services necessary for the trade
thereof.
(2) This Law shall determine the requirements, which the
participants of the electricity market (hereinafter - market
participants) and the participants of the electricity system
(hereinafter - system participants) shall observe in their
activities in the electricity market, as well as the
responsibility for non-complying with the requirements of this
Law.
(3) This Law shall determine the competence of the ministry
responsible for the energy industry (hereinafter - Ministry) and
the Public Utilities Commission (hereinafter - the Regulator) in
the monitoring and regulation of the electricity market.
(4) This Law shall determine the incentive measures for
production of electricity by using renewable energy
resources.
[10 October 2013]
Chapter
II
The Electricity System and Market
Section 4. Electricity System
(1) An electricity system (hereinafter also - system) shall
consist of electricity production equipment, transmission and
distribution systems and electricity consumption equipment, which
are interconnected and are necessary for the transportation of
electricity from a producer to a customer.
(2) The procedures for the system management and utilisation,
and the activities of market participants, shall be determined in
the Network Code. A transmission system operator shall develop
and the Regulator shall approve the Network Code. The
transmission system operator shall ensure the compliance with the
procedures specified in the Network Code. The Regulator may
assign the transmission system operator to draw up amendments to
the Network Code and determine a time period for the drawing up
and submission thereof to the Regulator.
[8 July 2011]
Section 5. Main Conditions for the
Operation of the Electricity Market
(1) In an electricity market the participants thereof shall
enter into mutual agreements in writing or by utilising distance
communication means.
(2) A market participant has the right to use the transmission
and distribution systems for the transportation of electricity
for the system service tariffs determined in accordance with the
procedures laid down in this Law and the Law On Regulators of
Public Utilities.
(3) Disputes regarding the bills issued by system participants
and electricity traders shall be examined in accordance with the
procedures laid down in the Civil Procedure Law. Documents, which
are developed in order to prepare or justify payment documents,
shall not be appealed separately.
(4) The Regulator shall monitor transparency and competition
level of the electricity market.
(5) Once a year the Regulator shall report to the European
Commission and the Agency for the Cooperation of Energy
Regulators regarding its activities and the performance of the
responsibilities laid down in this Law, as well as publish this
report on its website.
[10 April 2008; 8 July 2011; 10
October 2013]
Chapter
III
Basic Principles of the System Operation
Section 6. Electricity System
Operator
(1) The operations of the electricity system operator
(hereinafter - the system operator) shall be governed by this Law
and the Law On Regulators of Public Utilities.
(2) The system operator shall be responsible for the
management of the electricity flow in a transmission or
distribution system.
[19 May 2016]
Section 7. Licensing of a System
Operator
(1) The Regulator shall licence a system operator in
accordance with this Law and the Law On Regulators of Public
Utilities.
(2) A licence shall indicate the area of activities in which
the relevant system operator is entitled to operate and the
requirements, which the system operator shall observe in the
activities thereof.
(3) A system operator may not transfer the licence issued
thereto to other persons.
[8 July 2011]
Section 8. Regulation of the System
Operator Activity and Supervision of the Activity of the
Electricity System Owner
(1) The Regulator shall regulate the activity of a system
operator in accordance with the procedures laid down in this Law,
the Energy Law and the Law On Regulators of Public Utilities. The
fulfilment of the duties laid down by this Law for an electricity
system owner shall be supervised by the Regulator.
(2) The Regulator shall determine uniform regulations for a
system connection for electricity producers and customers, as
well as the methodology for the determination of a connection
fee.
(3) The Regulator shall supervise:
1) the action and methods, which a systems operator or market
operator utilises for the management of the congestion and
prevention of over-loading of a system;
2) the time consumption by the system operator for the
installation of connections and performing repairs;
3) the separation of accounts in accordance with the
procedures laid down in Sections 38, 39 and 40 of this Law;
4) the fulfilment of the provisions for connection of the
system participants laid down in Section 9, Paragraph two of this
Law;
5) [10 October 2013].
(4) The Regulator shall supervise the legal relations between
a transmission system operator and an electricity system owner,
which the transmission system operator and the electricity system
owner have executed for the fulfilment of the obligations laid
down in this Law. The Regulator as an out-of-court instance shall
in accordance with the procedures laid down in the Law On
Regulators of Public Utilities settle disputes between the
transmission system operator and the electricity system
owner.
(5) The Regulator is entitled to carry out inspections (also
without a prior notice) at the premises of the transmission
system operator and electricity system owner for the purpose of
the supervision of fulfilling the requirements laid down in the
Law on Regulators of Public Utilities, in this Law and the
special laws and regulations of the energy sector.
(6) A transmission system operator and an electricity system
owner shall submit to the Regulator the requested information
regarding the fulfilment of the obligations laid down in this Law
in the time periods and procedures stipulated by the
Regulator.
(7) [10 October 2013]
[8 July 2011; 10 October 2013; 19
May 2016]
Section 9. Operation of the
System
(1) A system operator shall be responsible, within the area
and the term of the licence activity thereof, for the operation,
maintenance and safety of the system, the management and the
development of the system, and for connection with other systems,
as well as for a sustainable ability of the system to ensure the
transportation of electricity in correspondence with the expected
demand.
(2) A system operator shall have permanent obligations within
the area and the term of the licence activity thereof to ensure
system participants with the required connection to the relevant
system in accordance with the uniform regulations for a system
connection specified by the Regulator, if the system participant
fulfils the technical requirements for the installation of a
connection determined by the system operator. The connection fee
shall comply with the justified costs of the installation of the
relevant system connection. The division of costs between a
system participant and system operator shall be determined by the
Regulator in cases specified in Paragraph 2.1 of this
Section. The connection fee of a new system participant shall not
include the system development expenses.
(21) A connection fee for the final customer shall
be determined in accordance with the methodology for the
determination of a connection fee, if the connection of the final
customer simultaneously complies with the following criteria:
1) a connection voltage does not exceed 400 volts;
2) the nominal current of the input protection appliance does
not exceed the value stipulated by the Cabinet.
(22) A system operator in accordance with the
provisions of the Regulator shall develop, submit for approval to
the Regulator and publish conditions for efficient use of
permitted load and procedures for the application thereof to new
connections conforming to the requirements of the Regulator.
(23) Procedures for financing installation of the
connection for a protected user shall be determined by the
Cabinet.
(3) In accordance with the procedures stipulated by the
Cabinet a final customer has the right to submit an application
for a special connection to the transmission system or an
amplification of the system connection capacity if the
electricity consumption of such customer after installation of
the connection increases by at least 100 000 megawatt hours per
year or with a nominal connection power not less than 50
megawatts. The Cabinet shall determine uniform special connection
regulations, providing for procedures for the submission and
examination of the final customer application, the procedures for
the connection installation and the required guarantees of the
final customer regarding the use of the connection, as well as
shall examine the final customer applications for the special
connection to the transmission system or the amplification of the
existing transmission system connection capacity and shall adopt
a decision regarding the application of special conditions for a
connection separately in each case.
(4) A system operator has the right to refuse a connection to
the relevant system if the network capacity thereof is not
sufficient. The system operator shall provide a justification for
the refusal in writing within 30 days after receipt of an
application of a system participant.
(5) Within seven working days a system operator shall inform
the Regulator regarding each case when the access to the system
was refused to a market participant, and regarding the measures,
which are required in order to improve the system and amplify the
capacity thereof.
[10 April 2008; 10 October 2013; 19
May 2016]
Chapter
IV
Transmission
Section 10. Transmission System
A transmission system shall include interconnected networks
and equipment, including cross-border interconnections, the
voltage whereof is 110 kilovolts or more and which are used for
transmission to the relevant distribution system or customers.
The transmission system shall be the property of the electricity
system owner or the transmission system operator.
[8 July 2011]
Section 11. Transmission System
Operator
(1) A single transmission system operator shall operate in
Latvia, and the area of the licence operation thereof shall be
all the territory of Latvia.
(2) A transmission system operator may participate in the
trade of electricity only in cases where it ensures the supply of
last resort in the cases specified in Section 34 of this Law or
where the purchase or sale of electricity or capacity is required
to balance the system, to purchase ancillary services, cover
losses incurred during the transportation of electricity, for the
consumption by the transmission system operator itself or if
there is a deviation in the system from the normal operation
mode, or an accident has occurred. Participating in the trade of
electricity, a transmission system operator shall act taking into
account open, non-discriminating and on market principles based
procedures, except for the cases when there is a deviation in the
system from the normal operation mode, or an accident has
occurred. If there is deviation in the system from the normal
operation mode, or an accident has occurred, a transmission
system operator shall act in accordance with Network Code
regulations.
(3) A transmission system operator shall ensure protection for
the restricted access information which it has received from the
system participants and market participants while performing its
duties.
[10 April 2008; 10 October 2013; 6
November 2013]
Section 11.1
Certification and Designation of a Transmission System
Operator
(1) The Regulator shall certify a transmission system
operator:
1) if it has received an application by the transmission
system operator;
2) on its own initiative in cases specified in this Law;
3) after a reasoned request by the European Commission.
(2) A transmission system operator shall comply with all the
requirements for certification, if it has fulfilled all the
requirements referred to in this Paragraph:
1) the independence requirements laid down in Section 12,
Paragraph two of this Law are being observed;
2) has at its disposal the human, technical and financial
resources necessary to carry out its obligations specified for
the transmission system operator by this Law;
3) has developed and is observing the 10 year transmission
system development plan specified in Section 15.1 of
this Law;
4) fulfils all the obligations specified for a transmission
system operator by Regulation No 714/2209 of the European
Parliament and Council on conditions for access to the network
for cross-border exchanges in electricity and repealing
Regulation No 1228/2003.
(3) A transmission system operator shall submit a confirmation
by the electricity system owner to the Regulator regarding the
electricity system owner's ability to comply with obligations,
which arise from Section 21.2 of this Law.
(4) The Regulator shall specify which documents and
information must be submitted, in order to certify the fulfilment
of the requirements of Paragraphs two and three of this
Section.
(5) The Regulator shall, within four months after receipt of
an application by a transmission system operator or request by
the European Commission, assess the compliance of the
transmission system operator with the certification requirements
laid down in Paragraph two of this Section and the electricity
system owner's confirmation regarding the electricity system
owner's ability to comply with obligations, which arise from
Section 21.2 of this Law.
(6) If a transmission system operator does not comply with the
requirements for certification or the electricity system owner is
unable to observe the obligations which arise from Section
21.2 of this Law, the Regulator shall take a decision
to refuse to certify the transmission system operator and shall
determine a time period for the elimination of deficiencies by
the transmission system operator or the electricity system owner.
The time period, which it is necessary for the transmission
system operator or electricity system owner to eliminate the
deficiencies, shall not be included in the time period referred
to in Paragraph five of this Section.
(7) If a transmission system operator complies with the
requirements for certification and the electricity system owner
is able to observe the obligations which arise from Section
21.2 of this Law, the Regulator shall send an opinion
regarding the compliance of the transmission system operator with
the certification requirements laid down in Paragraph two of this
Section and the electricity system owner's ability to observe the
obligations, which arise from Section 21.2 of this
Law, as well as the information associated with the opinion, to
the European Commission.
(8) Within two months after the opinion of the European
Commission has been received regarding the certification of a
transmission system operator, the Regulator shall take a decision
to certify the transmission system operator and shall designate
the transmission system operator. The decision shall be sent to
the European Commission.
(9) If the European Commission, on evaluation of the opinion
of the Regulator and the information associated therewith
referred to in Paragraph seven of this Section, concludes that a
transmission system operator does not comply with the
certification requirements or if the electricity system owner is
not capable of observing its obligations, the Regulator shall,
within three months after receipt of the opinion of the European
Commission, take a decision to refuse to certify the transmission
system operator. The Regulator shall determine a time period for
the elimination of deficiencies by the transmission system
operator or electricity system owner, as well as the time period
in which the transmission system operator shall repeatedly submit
an application regarding its certification.
(10) A transmission system operator shall each year in
accordance with the procedures stipulated by the Regulator submit
a report on the compliance of the transmission system operator to
the certification requirements. The electricity system owner
shall, each year in accordance with the procedures stipulated by
the Regulator, submit a report on the ability of the electricity
system owner to observe the obligations arising from Section
21.2 of this Law. The Regulator, after receipt of this
report, may take a decision on the necessity to certify the
transmission system operator in accordance with Paragraph one,
Clause 2 of this Section.
[8 July 2011]
Section 12. Independence of a
Transmission System Operator
(1) A transmission system operator shall be a capital company,
which shall be separated from the activities of electricity
production, distribution and trade and is not part of a
vertically integrated electricity undertaking. If the
transmission system operator has a transmission system in the
possession thereof, then the transmission system operator within
the meaning of this Law shall not be deemed to be an electricity
system owner and the rights and obligations of an electricity
system owner shall not be applied thereto.
(2) In order to ensure the independence of a transmission
system operator, the following conditions shall be taken into
account:
1) the holder of the capital shares of the transmission system
operator may not be directly or indirectly a holder of the
capital shares of the electricity system owner or the holder of
capital shares of such merchant which performs production,
distribution and trade of electricity activities;
2) the person, who appoints members of the board of directors
or council of a transmission system operator, may not directly or
indirectly appoint members of the board of directors or council
of the electricity system owner or members of the board of
directors or council of such merchant which performs production,
distribution and trade of electricity activities;
3) the one and the same person may not simultaneously hold
office as a member of the board of directors or council of a
transmission system operator and office as a member of the board
of directors of a capital company which performs production,
distribution and trade of electricity activities.
(3) The Regulator shall determine which documents and
information must be submitted, in order to certify to the
fulfilment of the requirements of Paragraph two of this
Section.
(4) Each year a transmission system operator shall submit to
the Regulator in accordance with the procedures stipulated
thereby a report on the compliance thereof with the requirements
of Paragraph two of this Section. After evaluation of the report
the regulator shall provide an opinion on sufficiency of the
measures taken for ensuring independence. The transmission system
operator shall eliminate the deficiencies indicated in the
opinion of the Regulator within the time period stipulated by the
Regulator. If necessary, the Regulator shall take a decision on
the necessity to certify a transmission system operator in
accordance with Section 11.1, Paragraph one, Clause 2
of this Law.
[8 July 2011; 10 October 2013]
Section 13. Responsibility of a
Transmission System Operator
(1) A transmission system operator shall provide transmission
system services and ensure balancing and stability in the
transmission system. Such duties shall be performed in accordance
with the principles of fairness, openness and equality, and the
procedures for the implementation thereof shall be laid down in
the Network Code.
(2) A transmission system operator shall be responsible for
the balancing in the transmission system and the calculations of
the balancing, which shall be performed in a fair, open and equal
manner in relation to all system participants.
(3) A transmission system operator shall be responsible for
the safety of the electricity supply, reservation of electricity
production capacities and energy flow management, taking into
account the exchange of electricity between other connected
transmission systems, ensuring an adequate transmission network
capacity and a stable operation of the system.
(4) A transmission system operator shall be responsible for
the elimination of the possible transmission system congestion
and overload if the congestion or the overload occurs as a result
of the intended trade transactions, as well as for the stability
of the interconnected transmission system and the compatibility
thereof with the energy systems of foreign states.
(5) A transmission system operator is entitled to restrict or
refuse the intended commercial transactions if it is impossible
otherwise to prevent transmission restrictions or a transmission
system congestion and the stability of the interconnected system
is endangered. Commercial transactions shall be registered,
restricted and rejected in accordance with the procedures laid
down in the Network Code, taking into account the principles of
fairness, openness and equality.
(6) A transmission system operator, when developing a
transmission system, shall be responsible for the planning,
construction and handing over for commissioning of a new
transmission infrastructure object.
[10 April 2008; 8 July 2011]
Section 13.1 Cross-border
Interconnections and Co-operation
(1) A transmission system operator shall co-operate with the
transmission system operators of the European Economic Zone
states, in order to promote the activity of the internal
electricity market, as well as cross-border trade, and to achieve
the optimal management, co-ordination and technical development
of the European Economic Zone transmission system.
(2) A transmission system operator shall foster measures which
ensure optimal system management, and promote the development of
the electricity exchange, a co-ordinated non-discriminatory
cross-border interconnection capacity distribution, with methods
directed to the electricity market, paying full regard to
concrete gains, which give short-term granting of implicit
auctions, as well as integration of balancing and reserve
capacity mechanisms.
(3) A transmission system operator in co-operation with the
relevant institution or institutions of the Member States, with
which there is a cross-border interconnection, shall introduce
co-ordination and information exchange mechanisms, in order to
achieve system safety in accordance with the requirements for
management of congestion and prevention of congestion.
Cross-border interconnection congestion management and prevention
of congestion requirements shall be governed by the Network
Code.
(4) The Regulator in co-operation with the relevant
institution or institutions of the Member State, with which there
is a cross-border interconnection, shall supervise the fulfilment
of the requirements for co-operation in the management of
cross-border interconnection congestion and prevention of
congestion.
(5) The Regulator shall supervise the information published by
the transmission system operator regarding cross-border
interconnections, the utilisation of the system and the
distribution of the system capacity to customers, taking into
account that non-aggregated information shall be regarded as a
commercial secret.
(6) A transmission system operator shall collect the
congestion fees and payments, which are made in accordance with
inter-transmission system operators compensation mechanisms.
(7) The Regulator shall supervise the utilisation of the fees
and payments referred to in Paragraph six of this Section.
(8) Substantiated costs which are associated with the
activities referred to in this Section shall be covered by the
transmission system operator, and they shall be included in the
transmission system service tariffs.
[8 July 2011]
Section 14. Ancillary Services in a
Transmission System
A transmission system operator shall provide ancillary
services independently, including balancing services or purchase
them. The transmission system operator shall purchase ancillary
services taking into account open, non-discriminating and on
market principles based procedures.
[10 April 2008]
Section 15. Long-term Safety of
Electricity Supply
(1) A transmission system operator shall draft a report
regarding the assessment of the conformity of the transmission
system supply and consumption and the safety and provision of
State electricity supply with the production capacities
(hereinafter - assessment report) for a time period of up to 10
years. The assessment report shall include a forecast of the
electricity and capacity demand for at least the next 10 years,
an evaluation of conformity of the respective supply and
consumption in the reporting period and a forecast for the next
10 years, information regarding the conformity of the
transmission system with the demand, maintenance quality,
information regarding the constructed and intended production
capacities, as well as measures which shall be performed in case
of maximum demand and in case of shortage of one or more
suppliers.
(2) The transmission system operator evaluation report shall
be submitted annually to the Ministry and the Regulator. The
Cabinet shall determine the procedures by which the transmission
system operator develops and submits to the Ministry and the
Regulator the evaluation report, and the requirements in relation
to the contents of the evaluation report.
(3) A transmission system operator is entitled to request and
receive information necessary for the drafting of an assessment
report from all the system participants.
(4) For ensuring the safety of State electricity supply in the
territory of Latvia the sum of electricity generation capacities
available any time shall be such to ensure the electricity
production volume which is not less than 80 per cent of the total
expected consumption in 2012.
[10 April 2008]
Section 15.1 Long-term
Development of an Electricity Supply System
(1) Each year the Regulator shall approve the 10 Year
Transmission System Development Plan drafted by a transmission
system operator and shall supervise the fulfilment thereof.
(2) The Regulator shall specify the information to be included
in the 10 Year Development Plan and the procedures for submitting
the plan.
(3) A transmission system operator is entitled to request and
receive information necessary for the drafting of a 10 Year
Transmission System Development Plan from all the electricity
system participants.
[8 July 2011; 10 October 2013]
Section 16. Tariffs of the
Transmission System Services
(1) The tariffs of the transmission system services
(hereinafter - transmission tariffs) shall be determined by the
Regulator in accordance with the procedures laid down in the Law
On Regulators of Public Utilities or by the transmission system
operator in accordance with the methodology of tariff calculation
stipulated by the Regulator if a permission of the Regulator has
been received. The transmission tariffs shall be published prior
to the entry into effect thereof in accordance with the
procedures stipulated by the Regulator.
(2) Transmission tariffs shall not depend on the distance
between the location of a customer and a producer. Other
differences in tariffs are permissible if the Regulator has
specified such differences in the methodology of the tariff
calculation.
(3) Compensation to an electricity system owner, which ensures
an adequate return from the transmission system and new
investments therein, if the investments have been made in
accordance with the plan specified in Section 15.1 of
this Law, as well as costs related to the collection,
administration of the mandatory procurement component and
performance of the settlement of accounts duty with the public
trader shall be included in transmission tariffs.
[8 July 2011; 17 December 2014]
Section 16.1 Compensation
of the Costs of a Transmission System Operator
Market participants which declare electricity imports from
countries which are not included in the European Economic Zone or
export electricity to countries not included in the European
Economic Zone, prior to performing a commercial transaction shall
conclude a contract with the transmission system operator, where
the relevant market participant undertakes to cover the costs of
the transmission system operator, including the payments
(perimeter payment) specified by the European Commission, the
European Network of Transmission System Operators for Electricity
and contracts by the European transmission system operators,
which are associated with the import of electricity from
countries not included in the European Economic Zone or the
export of electricity to countries not included in the European
Economic Zone.
[8 July 2011]
Chapter V
Distribution
Section 17. Distribution System
(1) A distribution system shall include medium- and
low-voltage distribution networks and equipment, which are used
to supply electricity to customers and in which voltage is less
than 110 kilovolts.
(2) Access to the distribution system shall also provide for
the use of the transmission system services within the territory
of Latvia.
Section 18. Distribution System
Operator
(1) The Regulator shall determine the operation area of a
licence of each distribution system operator. The Regulator has
the right to alter the borders of the operation area of the
already issued licences.
(2) The overlapping of the licence operation areas of
distribution system operators is not allowed.
(3) A distribution system operator may participate in the
trade of electricity in cases where it ensures the supply of last
resort in the cases set out in Section 34 of this Law or where
the purchase or sale of electricity is required to cover the
electricity losses in the distribution system or for the
consumption by the distribution system operator itself.
(4) [18 September 2014]
(5) A distribution system operator shall ensure protection for
the restricted access information which it has received from the
system participants and market participants while performing its
duties.
(6) A distribution system operator, when trusting performance
of the supply of last resort to a trader, shall comply with open,
non-discriminating and on market principles based procedures.
[10 October 2013; 6 November 2013;
18 September 2014]
Section 19. Independence of a
Distribution System Operator
(1) A distribution system operator shall be a separate capital
company and shall be separated from the activities of production,
transmission and trade of electricity. The distribution system
operator, which is a part of a vertically integrated energy
supply merchant, shall ensure in its communication and creation
of the brand that its identity is separated from the identity of
the trade structure of the vertically integrated energy supply
merchant.
(2) The independence of a distribution system operator shall
be ensured by taking into account the following conditions:
1) board members of the distribution system operator shall not
engage in the structures of a vertically integrated electricity
undertaking, which are directly or indirectly responsible for the
production, transmission and trade of electricity in the daily
activities;
2) the board members of the distribution system operator shall
be ensured with the right to take decisions regarding the assets
necessary for the exploitation, maintenance or development of the
distribution system without reference to the vertically
integrated electricity undertaking and the dominant undertaking.
It does not prohibit the formation of relevant co-ordination
mechanisms in order to ensure the protection of the economic and
managerial supervision rights of the dominant undertaking with
regard to the return on the assets of the distribution system
operator. The dominant undertaking is permitted to approve the
annual financial plan of the distribution system operator, or
financial planning documents similar thereto, and to determine
general restrictions regarding the debt commitments of the
distribution system operator, but it is not permitted to give
instructions regarding the daily activities and decisions
regarding the construction and installation or modernisation of
the distribution system, if such construction and installation or
modernisation costs do not exceed the costs of the approved
financial plan or financial planning documents similar
thereto;
3) the distribution system operator shall elaborate a
compliance programme, in which duties of concrete employees are
specified, as well as measures, which shall be performed, in
order to prevent discriminatory action, and provide adequate
control of the compliance with it. Each year the distribution
system operator shall submit a report to the Regulator on the
measures carried out, and such notification shall be published in
accordance with the procedures stipulated by the Regulator. After
evaluation of the report the regulator shall provide an opinion
on sufficiency of the measures taken for ensuring independence.
The distribution system operator shall eliminate the deficiencies
indicated in the opinion of the Regulator within the time period
stipulated by the Regulator.
(3) The Regulator shall determine which documents and
information must be submitted, in order to certify to the
fulfilment of the requirements of Paragraph two of this
Section.
(4) The Regulator shall determine the procedures for
submitting, publishing and evaluating the report referred to in
Paragraph two, Clause 3 of this Section.
(5) The requirements of this Section shall not be applied to
the operators of such distribution systems to which less than one
hundred thousand customers are connected, but such operators
shall ensure the separation of accounts of the performed
activities in accordance with Sections 38, 39 and 40 of this Law
and the functional separation, observing the following minimum
requirements:
1) separate structural units, which are responsible for the
distribution and trade of electricity and which operate as
separate profit centres, shall be established;
2) employment contracts with the managers of the structural
units shall be concluded, in which precise and unequivocal
reasons for discontinuation of such contracts are indicated;
3) the heads of the distribution system units may not fulfil
duties, which are related to the work of a trade unit and vice
versa;
4) as far as possible rotation of employees among units shall
be eliminated.
[8 July 2011; 17 December 2014 / See Paragraph 50 of
Transitional Provisions]
Section 20. Tariffs of the
Distribution System Services
(1) The tariffs of the distribution system services
(hereinafter - distribution tariffs) shall be determined by the
Regulator in accordance with the procedures laid down in the Law
On Regulators of Public Utilities or by the distribution system
operator in accordance with methodology of tariff calculation
stipulated by the Regulator if a permission of the Regulator has
been received. The distribution tariffs shall be published prior
to coming into force thereof in accordance with the procedures
stipulated by the Regulator.
(2) The distribution tariffs within a single licence operation
area shall not depend on the distance between the location of a
customer and a producer. Differences in tariffs are allowed
between the levels of voltage and consumption if they are
economically justified and are the same to all customers of the
relevant voltage and consumption level group.
Section 21. Property of the
Distribution System Operator
[17 December 2014]
Chapter
V1
Electricity System Owner
[8 July
2011]
Section 21.1 Electricity
System Owner
(1) An electricity system owner shall be a separate capital
company in the composition of vertically integrated electricity
undertaking and shall be separated from the activities of
production, transmission and trade of electricity.
(2) In order to ensure the independence of an electricity
system owner, the following conditions shall be taken into
account:
1) board members of the electricity system operator shall not
engage in the structures of a vertically integrated electricity
undertaking, which are directly or indirectly responsible for the
production, transmission and trade of electricity in the daily
activities;
2) an electricity system owner shall only utilise such
vertically integrated electricity undertaking services, which
ensure the confidentiality of such commercial information which
the electricity system owner, in fulfilling the obligations
thereof, has received from electricity system participants and
market participants;
3) an electricity system owner shall be ensured with the right
to take decisions without reference to the vertically integrated
electricity undertaking.
(3) An electricity system owner shall elaborate a compliance
programme, in which the duties of concrete employees are
specified, as well as measures, which shall be performed, in
order to prevent discriminatory action, and provide adequate
control of the compliance with it. The electricity system owner
shall submit a report to the Regulator on the measures carried
out, and such report shall be published in accordance with the
procedures stipulated by the Regulator. After evaluation of the
report the regulator shall provide an opinion on sufficiency of
the measures taken for ensuring independence. The electricity
system owner shall eliminate the deficiencies indicated in the
opinion of the Regulator within the time period stipulated by the
Regulator.
(4) The Regulator shall determine which documents and
information must be submitted, in order to certify to the
fulfilment of the requirements of Paragraphs two and three of
this Section.
(5) The Regulator shall determine the procedures for
submitting, publishing and evaluating the report referred to in
Paragraph three of this Section.
(6) The electricity system owner shall pay a State fee for the
regulation of public utilities in accordance with the procedures
laid down in the Law on Regulators of Public Utilities.
(7) The electricity system owner shall pay the State fee for
the regulation of public utilities from its income gained for
active lease of the electricity transmission system to the
transmission system operator in the previous calendar year.
[19 May 2016 / Paragraphs six and seven shall come
into force on 1 July 2016. See Paragraph 63 of
Transitional Provisions]
Section 21.2
Responsibility of an Electricity System Owner
(1) An electricity system owner shall co-operate with the
transmission system operator, shall provide it with information
necessary for the performance of the obligations of a
transmission system operator and shall not disclose restricted
access information to other vertically integrated electricity
undertaking structures.
(2) An electricity system owner shall finance investments in
the transmission system, which shall be decided upon by the
transmission system operator and which shall be approved by the
Regulator. The networks and facilities financed by these
investments shall become a part of the transmission system and
shall be the property of the electricity system owner.
(3) An electricity system owner shall ensure financing for
transmission system activities and development, with the
exception of the investments referred to in Paragraph four of
this Section.
(4) An electricity system owner and the transmission system
operator in particular instances, after prior co-ordination with
the Regulator, may agree that investments in the transmission
system shall be financed by the transmission system operator. If
the investments are financed by the transmission system operator,
then the networks and facilities financed by these investments
shall become a part of the transmission system and shall be the
property of the transmission system operator.
Chapter
VI
Introduction of New Capacities
Section 22. Amplification of the
Production Capacity
(1) A permit of the Ministry shall be required for the
amplification of production capacities and the introduction of
new production equipment. The Cabinet shall determine the
requirements, which must be fulfilled in order to receive the
permit, as well as the procedures for issuing, cancelling or
extending the validity period of the permit.
(2) The permit shall be issued or refused within 30 days after
receipt of all the necessary documents. In the case of refusal, a
justification of the refusal shall be provided in writing.
(3) A refusal shall be justified only by non-compliance of a
submission with the specified requirements. A submitter of the
submission may appeal against the refusal in accordance with the
procedures laid down in the Administrative Procedure Law.
(4) The construction of the production capacities shall take
place in accordance with the procedures laid down in laws and
regulations.
Section 23. Competition
(1) If it follows from the assessment report drafted by a
transmission system operator and referred to in Section 15 of
this Law that the insufficiency of production capacities
endangers the safety of the State electricity supply within or
outside Latvia and it is necessary to introduce new electricity
production capacities urgently in order to comply with the
requirements laid down in Section 15, Paragraph four of this Law,
but it is not possible to compensate for this shortage in
accordance with the procedures laid down in Section 22 of this
Law, the transmission system operator shall notify the Ministry
regarding the necessity to introduce new electricity production
capacities or reconstruct the existing equipment in order to
amplify the capacity thereof.
(2) On the basis of the information provided by a transmission
system operator and referred to in Paragraph one of this Section
and on the basis of the assessment report, the Ministry shall
propose to announce a competition regarding the introduction of
new production capacities or reconstruction of the existing
equipment in order to amplify the capacity thereof.
(3) The Cabinet shall take a decision to announce a
competition. The object of the competition shall be the payment
of the production capacity to be introduced.
(4) The Cabinet shall determine the following in the decision
to announce a competition:
1) the volume of the capacity to be introduced;
2) conditions for the availability of the capacity to be
introduced;
3) term for the introduction of the capacity;
4) conditions for payment of the capacity to be
introduced;
5) term for announcement of a competition;
6) requirements to be postulated for applicants;
7) criteria for assessment of applications;
8) term for submission and assessment of applications.
(5) The Regulator shall announce and organise a competition
taking into account that specified in the decision referred to in
Paragraph four of this Section. The competition shall be
announced in the Official Journal of the European Union not later
than six months prior to the expiration of the term for
submitting submissions.
(6) A decision on the result of a competition shall be taken
by the Cabinet.
(7) The payment of the introduced production capacity shall be
performed by a transmission system operator and these expenses
shall be included in the transmission tariffs. The payment
expenses of introduced production capacities shall be covered by
all electricity final customers of Latvia. The methodology of the
expense extension calculation shall be determined by the
Regulator.
[10 April 2008]
Section 24. Electricity Production
in the Production Capacities Introduced in Accordance with the
Competition Procedures
[10 April 2008]
Section 25. Construction of
Lines
(1) In order to construct a cross-border interconnection with
voltage of 110 kilovolts and more for the transportation of
electricity a permit of the Regulator shall be required. The
Regulator shall determine impartial and equal criteria for the
issuance of the permit for the construction of the cross-border
interconnection drawing a special attention to:
1) a special geographic situation;
2) maintaining of a reasonable balance between construction
expenses of new cross-border interconnection and the benefit of
final customers;
3) efficient use of existing cross-border interconnection.
(2) A distribution system operator has the right to construct
a distribution line within the area of the licence operation
thereof.
(3) Another person who is not a distribution system operator
has the right to construct a distribution line within the licence
operation area of a distribution system operator if the line,
which is being built, is:
1) a direct line; or
2) an internal line of a separate immovable property.
(4) If the line referred to in Paragraph three, Clause 2 of
this Section complies with the technical requirements laid down
in the Network Code, a distribution system operator shall connect
this line to the relevant distribution system for a connection
fee, which is determined in accordance with Section 9, Paragraph
two or Paragraph 2.1 of this Law and in accordance
with the uniform regulations for a system connection determined
by the Regulator.
[10 April 2008]
Section 26. Direct Line
(1) A producer has the right to supply electricity to
customers or own objects by using a direct line connection.
(2) The Regulator shall issue a permit for the construction of
a direct line connection. The Regulator shall determine impartial
and equal criteria for the issuance of the permit for the
construction of the direct line connection.
(3) A permit for the construction of a direct line connection
shall be issued or refused within 30 days after receipt of all
the documents stipulated by the Regulator.
Chapter
VII
Electricity Production and Price Determination
Section 26.1 Registration
of an Electricity Producer
(1) An electricity producer, the activities of which it is
necessary to regulate in accordance with the Law On Regulators of
Public Utilities, has the right to commence the production of
electricity, if it is registered in the Register of Electricity
Producers.
(2) The Regulator shall determine the general authorisation
requirements for an electricity production, which are binding on
all electricity producers, the activities of which it is
necessary to regulate in accordance with the Law On Regulators of
Public Utilities.
(3) The Regulator shall establish a Register of Electricity
Producers and shall ensure public access thereto.
(4) The Regulator shall determine the data to be included in
the Register of Electricity Producers, the requirements for the
registration of electricity producers and procedures in
accordance with which the electricity producer shall send his
notification regarding registration (hereinafter - registration
notification) or a notification regarding the termination of
activity, the information to be included in the registration
notification or the notification regarding termination of
activity, as well as the procedures, according to which the
electricity producer shall be excluded from the Register of
Electricity Producers and re-registered.
(5) If the general authorisation provisions for an electricity
production have been infringed repeatedly, the Regulator may
exclude the electricity producer from the Register of Electricity
Producers. The electricity producer has the right to recommence
electricity production not earlier than after a year from the day
when the electricity producer is excluded from the Register of
Electricity Producers, if it has rectified the infringement for
which it has been excluded from the Register of Electricity
Producers, sent a new registration notification to the Regulator
in accordance with the procedures laid down by laws and
regulations and, in accordance with the procedures laid down in
this Law, is repeatedly registered in the Register of Electricity
Producers.
(6) If within one month following the day of receipt of a
registration notification the Regulator has not informed a
submitter of the registration notification in writing regarding
refusal to register, it shall be deemed that the electricity
producer has been registered.
(7) A registration notification shall be deemed to have been
received on the day when the Regulator has received all the
information that it prescribed. If the information indicated in
the submitted documents is incomplete or inaccurate, the
Regulator is entitled to request additional information. The time
period from the moment when the additional information was
requested until the receipt of the requested information shall
not be included in the time period specified in Paragraph six of
this Section.
(8) An electricity producer may terminate electricity
production, if it, in accordance with the procedures laid down in
laws and regulations, has sent a notification regarding
termination of activity and has been excluded from the Register
of Electricity Producers.
[8 July 2011; 10 October 2013]
Section 27. Price of Electricity
The producers, traders and customers shall determine the price
of electricity by mutual agreement, except the cases provided for
in this Law. The electricity exchange shall determine the
transaction prices in accordance with the regulations of this
exchange.
[8 July 2011]
Section 28. Electricity Production
in the Co-generation Plant with Installed Electric Capacity not
Exceeding Four Megawatts
(1) [19 May 2016]
(2) The Cabinet shall determine the criteria for the
qualification of co-generation plants for acquiring the right to
the mandatory procurement of electricity produced, the procedures
for the mandatory procurement and the supervision thereof, the
procedures for the determination of electricity price depending
on the electric capacity of a co-generation plant and the fuel
used, the procedures for covering the mandatory procurement
expenses and the procedures for refusing the right to sell the
produced electricity within the framework of the mandatory
procurement.
(3) If a producer wishes to exercise the right to the
mandatory procurement of electricity produced and the
co-generation plant thereof conforms to the criteria laid down by
the Cabinet, all surplus of the produced electricity which is
left after using the electricity for co-generation plant needs
shall be procured by a public trader for a price laid down in
accordance with the procedures provided for in Paragraph two of
this Section.
(4) [17 December 2014]
(5) A public trader shall record separately the volume and
expenses of the electricity procured in accordance with the
procedures laid down in Paragraph three of this Section. The
expenses of such procurement shall be covered by all electricity
final customers of Latvia in proportion to their electricity
consumption by compensating the expenses of the procurement for a
public trader. When calculating the expenses to be compensated,
the State budget subsidy for the reduction of the amount of
mandatory procurement components laid down in the Medium-term
Budget Framework Law shall be taken into account. The State
budget subsidy shall be applied to those expenses to be
compensated to which the reduced participation in compensating
the public trader for the expenses in accordance with the
procedures laid down in Section 30.2, Paragraph one of
this Law do not apply. The Regulator shall determine the
methodology of the expense extension calculation. A public trader
shall include the difference of expenses to be compensated and
the relevant income of the public trader in assets or liabilities
of the accounting year.
(6) A producer who exercises the right to the mandatory
procurement of electricity produced may waive the exercising
thereof at any time by informing the public trader three months
in advance.
(7) Co-generation plants which conform to the criteria
determined in accordance with the procedures laid down in
Paragraph two of this Section may receive a guarantee of origin
of the produced electricity in accordance with the procedures
stipulated by the Cabinet. The institution authorised by the
Cabinet shall issue a guarantee of origin.
[10 April 2008; 6 November 2013; 17 December 2014; 30
November 2015; 19 May 2016 / The amendment regarding the
deletion of Paragraph seven shall come into force on 1 October
2016 and has been included in the wording of the Law as of 1
October 2016. See Paragraph 56 of Transitional
Provisions]
Section 28.1 Electricity
Production in the Co-generation Plants with Installed Electric
Capacity is Greater than Four Megawatts
(1) [19 May 2016]
(2) The Cabinet shall determine the criteria for the
qualification of co-generation power plants for acquiring the
right to the guaranteed payment for the electric capacity
installed in a co-generation plants, the procedures for the
determination of the payment for the installed electric capacity
depending on the production technology and the fuel used, the
installed electric capacity of co-generation power plant, and the
procedures for making of such payment, as well as the procedures
for refusing the right to receive a guaranteed payment for the
electric capacity installed in a co-generation power plant.
(21) From 1 January 2014 a producer who produces
electricity in the co-generation plant the installed capacity of
which is greater than four megawatts and who until 31 December
2013 has used the right obtained in accordance to the procedures
laid down in Section 28 of this Law to sell the produced
electricity within the framework of the mandatory procurement
shall receive a guaranteed payment for electric capacity
installed in a co-generation plant in conformity with the same
conditions for the operation mode, terms and calculation of
capacity component which were applicable to the co-generation
plant until 31 December 2013.
(22) A producer, who until 31 December 2013 has
obtained the right to sell the electricity within the framework
of the mandatory procurement, which is produced in a
co-generation plant the installed capacity of which is greater
than four megawatts, however has not commenced the sale of
electricity to a public trader, is entitled to receive a
guaranteed payment for electric capacity installed in a
co-generation plant in conformity with the conditions of the laws
and regulations regarding the operation mode, terms and
calculation of capacity component which would be applicable to
the co-generation plant if it would have started the operation
until 31 December 2013.
(3) If a producer wishes to utilise the right to the
guaranteed payment for the electric capacity installed in a
co-generation plants and the co-generation power plant thereof
conforms to the criteria laid down by the Cabinet, a guaranteed
payment for electric capacity installed in a co-generation power
plant shall be paid by a public trader in accordance with the
procedures provided for in Paragraph two of this Section.
(4) A public trader shall record separately the payments
performed in accordance with the procedures laid down in
Paragraph three of this Section. The expenses made by payments
for the installed electric capacity shall be covered by all
electricity final customers of Latvia in proportion to their
electricity consumption by compensating the expenses of the
procurement for a public trader. The State budget subsidy for the
reduction of the amount of mandatory procurement components laid
down in the Medium-term Budget Framework Law shall be taken into
account for the calculation of expenses to be compensated. The
State budget subsidy shall be applied to those expenses to be
compensated to which the reduced participation in compensating
the public trader for the expenses in accordance with the
procedures laid down in Section 30.2, Paragraph one of
this Law does not apply.
(5) Co-generation plants which conform to the criteria
determined in accordance with the procedures laid down in
Paragraph two of this Section may receive a guarantee of origin
of the produced electricity in accordance with the procedures
stipulated by the Cabinet. The institution authorised by the
Cabinet shall issue a guarantee of origin.
[10 April 2008; 6 November 2013; 30 November 2015; 19 May
2016 / The amendment regarding the deletion of Paragraph
five shall come into force on 1 October 2016 and has been
included in the wording of the Law as of 1 October 2016.
See Paragraph 56 of Transitional Provisions]
Section 29. Production of
Electricity by Using Renewable Energy Resources
(1) [19 May 2016]
(2) [19 May 2016]
(3) [19 May 2016]
(4) The Cabinet shall determine the conditions for the
production of electricity by using renewable energy resources, as
well as the criteria for the qualification of producers for the
receipt of the right to the mandatory procurement of electricity
produced and the procedures for waiving thereof, the procedures
for determination of the electricity price depending on the type
of the renewable energy resources, the procedures for
determining, implementing and supervising the volume of the
mandatory procurement, the procedures for covering the expenses
of volume of the mandatory procurement, as well as the measures
for promotion of electricity production from the biomass.
(5) Producers who use renewable energy resources for the
production of electricity may receive a guarantee of origin of
the produced electricity in accordance with the procedures
stipulated by the Cabinet. The institution authorised by the
Cabinet shall issue a guarantee of origin.
(6) A producer who exercises the right to the mandatory
procurement of electricity produced may waive the exercising
thereof at any time by informing the Regulator and a public
trader thereof three months in advance.
(7) The provisions of Paragraph four of this Section, as well
as of Section 30 of this Law shall not apply to hydroelectric
power stations the capacity of which is more than five
megawatts.
[10 April 2008; 6 November 2013; 17 December 2014; 19 May
2016 / Amendment regarding the deletion of Paragraph five shall
come into force on 1 January 2016 and has been included in the
wording of the Law as of 1 October 2016. See Paragraph 56
of Transitional Provisions]
Section 29.1 Electricity
Production in the Power Plants with Installed Electric Capacity
Above One Megawatt Using Biomass or Biogas
[19 May 2016]
Section 29.2 Guarantee of
Origin
An electricity producer which utilises renewable energy
resources or high efficiency co- generation for electricity
production may, in accordance with the procedures laid down by
the Cabinet, receive a guarantee of origin for the quantity of
electricity produced which is expressed in megawatt hours (MWh).
The information to be included therein shall be stipulated by the
Cabinet. The institution authorised by the Cabinet shall issue a
guarantee of origin.
[8 July 2011; 19 May 2016]
Section 30. Purchase and Sale of
Electricity Produced by Using Renewable Energy Resources
(1) [17 December 2014]
(11) If a producer wishes to exercise the right to
the mandatory procurement of electricity and the power plant
thereof conforms to the criteria laid down by the Cabinet, all
surplus of the produced electricity which is left after using the
electricity for power plant needs shall be procured by a public
trader for a price laid down in accordance with the procedures
provided for in Section 29, Paragraph four of this Law.
(2) A public trader shall procure such part of the electricity
volume to be mandatorily procured, which is not covered by
electricity procurements from the producers specified in
Paragraph 1.1 of this Section, from any producer which
produces electricity by using renewable energy resources.
Electricity shall be procured from such producers following the
principle of economic gradualness and in accordance with a
contract in which the producer and the public trader have reached
an agreement regarding the electricity production regime,
electricity price and the time period of operation of the
contract, which may not be less than five years and more than 10
years. The Regulator shall determine the procedures for the
application of the principle of economic gradualness.
(3) A public trader shall record separately the volume and
expenses of the electricity procured in accordance with the
procedures laid down in Section 29 of this Law and Paragraphs
1.1 and two of this Section. The expenses of such
procurement shall be covered by all electricity final customers
of Latvia in proportion to their electricity consumption by
compensating the expenses of the procurement for a public trader.
The State budget subsidy for the reduction of the amount of
mandatory procurement components laid down in the Medium-term
Budget Framework Law shall be taken into account for the
calculation of expenses to be compensated. The State budget
subsidy shall be applied to those expenses to be compensated to
which the reduced participation in compensating the public trader
for the expenses in accordance with the procedures laid down in
Section 30.2, Paragraph one of this Law does not
apply. The Regulator shall determine the methodology of the
expense extension calculation. A public trader shall include the
difference of expenses to be compensated and the relevant income
of the public trader in assets or liabilities of the accounting
year.
[10 April 2008; 6 November 2013; 17
December 2014; 30 November 2015; 19 May 2016]
Section 30.1 Electricity
Net Payment System
(1) Electricity net payment system is a procedure for making
payments for the consumed electricity and for conducting offset
by a distribution system operator for the electricity consumed by
a household used and electricity produced which is transferred to
the distribution system operator's network. If in accordance with
the calculation of the amount of electricity consumed and
produced the household user has transferred to the distribution
system operator's network more electricity than he or she has
consumed, the relevant amount of electricity shall be included in
the next electricity payment period within the framework of the
year which starts on 1 April and ends on 31 March. A payment
period of the electricity net payment system shall be one
calendar month.
(2) A household user who produces electricity for consumption
in his or her household for his or her own needs (final
consumption) has the right to use electricity net payment system
for the payment of electricity consumed and produced in the
household, if all of the following conditions are observed:
1) a household user has entered into a written agreement with
a distribution system operator on the application of the
electricity net payment system;
2) in a household the electricity is produced using renewable
energy resources;
3) in a household the electricity is produced and consumed
within the framework of one system connection;
4) the operating voltage of the electricity production
installations installed in a household does not exceed 400 volts
and total operating current in a single-phase or three-phase
connection does not exceeds 16 amperes.
(3) Electricity net payment system shall be applied only to
payments for the electricity consumed by a household user, but
shall not be applied to payments for the received distribution
system services or other payments laid down in the laws and
regulations.
(4) The Cabinet shall determine the procedures by which a
household user agrees with a distribution system operator
regarding the application of the electricity net payment system
and the procedures by which it is to be applied.
[10 October 2013; 19 May 2016]
Section 30.2 Aid to
Energy-intensive Manufacturing Undertakings
(1) Energy-intensive manufacturing undertakings, in accordance
with the procedures stipulated by the Cabinet, may obtain the
right to reduce participation in compensation of their expenses
to a public trader.
(2) The criteria for classification of energy-intensive
manufacturing undertakings and the procedures, by which
undertakings may obtain or refuse the right specified in
Paragraph one of this Section, shall be determined by the
Cabinet.
(3) The public trader shall record separately expenses arising
from the reduced participation in compensation of the expenses
laid down in Paragraph one of this Section. Such expenses shall
be covered by all electricity final customers in Latvia in
proportion to their electricity consumption by compensating the
expenses related to the reduced participation for a public
trader. The State budget subsidy for the reduction of the amount
of mandatory procurement components laid down in the Medium-term
Budget Framework Law shall be taken into account for the
calculation of expenses to be compensated. The Regulator shall
determine the methodology for the expense extension. A public
trader shall include the difference of expenses to be compensated
and the relevant income of the public trader in assets or
liabilities of the accounting year.
[17 December 2014; 19 May 2016]
Section 30.3 Support to
Production of Electricity by Using Renewable Energy Resources
The Cabinet shall determine the selection criteria for support
mechanism in order to promote energy generation by using
renewable energy resources, amount of support, duration of
support, duties and responsibilities of the provider and receiver
of support.
[19 May 2016]
Section 31. Producer Right of
Choice
If a power plant of a producer may simultaneously apply for
the use of the rights specified in Sections 28, 28.1,
29, 29.1 and 30 of this Law, the producer may use only
one of the referred to rights of his or her own choice.
[10 April 2008]
Chapter
VIII
Trade of Electricity
Section 32. Basic Principles of the
Trade of Electricity
(1) The following may be engaged in the trade of
electricity:
1) an electricity producer, which in accordance with the
procedures laid down in this Law is registered in the Register of
Electricity Producers;
2) a distribution system operator to the distribution networks
of which less than one hundred thousand customers are connected,
if the requirements of Section 19 of this Law have been
observed;
3) an electricity trader who has been registered in the
Register of Electricity Traders in accordance with the procedures
laid down in this Law and an aggregator who has been registered
in the Register of Aggregators in accordance with the procedures
laid down in this Law;
4) a public trader.
(2) [17 December 2014]
(3) Electricity traders and distribution system operators
referred to in Paragraph one, Clause 2 of this Section shall
include a universal service offer in their trade service offers
expressed to household users. The Cabinet shall determine the
conditions and form of expression thereof.
(4) The Regulator shall determine, what information and to
what extent a trader shall include in the bills and informative
materials to be issued to a final customer.
(5) The Cabinet shall determine the procedures for supplying
and discontinuing of the electricity supply to customers, the
rights and duties of traders, system operators and customers in
the supply and use of electricity, as well as in payments for the
received services, and the procedures for change of traders.
(6) [6 November 2013].
[10 April 2008; 8 July 2011; 6
November 2013; 17 December 2014; 19 May 2016]
Section 32.1 Registration
of an Electricity Trader
(1) An electricity trader, the activities of which must be
regulated in accordance with the Law On Regulators of Public
Utilities, and a public trader have the right to commence the
trade of electricity, if they are registered in the Register of
Electricity Traders.
(2) The Regulator shall determine the general authorisation
requirements for an electricity trade which are binding on all
electricity traders the activities of which must be regulated in
accordance with the Law On Regulators of Public Utilities.
(3) The Regulator shall determine the data to be included in
the Register of Electricity Traders, the requirements for the
registration of electricity traders and procedures, in accordance
with which the electricity trader shall send its notification
regarding registration or a notification regarding the
termination of activity, the information to be included in the
registration notification or the notification regarding
termination of activity, as well as the procedures, according to
which the electricity trader shall be excluded from the Register
of Electricity Traders and re-registered.
(4) If the general authorisation provisions for an electricity
trade have been infringed repeatedly, the Regulator may exclude
the electricity trader from the Register of Electricity Traders.
The electricity trader has the right to recommence the trade of
electricity not earlier than after a year from the day when the
electricity trader is excluded from the Register of Electricity
traders, if it has rectified the infringement for which it has
been excluded from the Register of Electricity Traders, sent a
new registration notification to the Regulator in accordance with
the procedures laid down by laws and regulations and, in
accordance with the procedures laid down in this Law, is
repeatedly registered in the Register of Electricity Traders.
(5) The Regulator shall establish a Register of Electricity
Traders and shall ensure public access thereto.
(6) If within one month following the day of receipt of a
registration notification the Regulator has not informed the
notification submitter in writing regarding refusal to register,
it shall be deemed that the electricity trader has been
registered.
(7) A registration notification shall be deemed to have been
received on the day, when the Regulator has received all the
information that it prescribed. If the information indicated in
the submitted documents is incomplete or inaccurate, the
Regulator is entitled to request additional information. The time
period from the moment when the additional information was
requested until the receipt of the requested information shall
not be included in the time period specified in Paragraph six of
this Section.
(8) An electricity trader may terminate trading electricity,
if it, in accordance with the procedures laid down in laws and
regulations, has sent a notification regarding termination of
activity and has been excluded from the Register of Electricity
Traders.
[8 July 2011; 10 October 2013; 17
December 2014; 19 May 2016]
Section 33. Public Trader
(1) One public trader shall operate in the territory of
Latvia.
(2) A public trader shall have the following duties:
1) to procure electricity produced in the co-generation plants
in accordance with the procedures laid down in Section 28 of this
Law;
2) to procure electricity produced by using renewable energy
resources, in accordance with the procedures laid down in
Sections 29 and 30 of this Law;
3) to pay a guaranteed payment for the installed electric
capacity in accordance with the procedures laid down Sections
28.1 and 29.1 of this Law;
4) to make support payments in accordance with the procedures
laid down in Section 30.2 of this Law.
(3) A public trader, upon agreement with the producer
regarding the price of electricity, may procure electricity from
the producer, which sells it in accordance with the procedures
laid down in Section 28, 29, and 30 of this Law, if electricity
in the power plant or cogeneration plant of the producer has been
produced exceeding the electricity procurement amount assigned
within the scope of the mandatory procurement in the calendar
year.
(4) A public trader shall pay a State fee for the regulation
of public utilities in accordance with the procedures laid down
in the Law On Regulators of Public Utilities.
(5) A public trader shall pay a State fee for the regulation
of public utilities from the final customer payments of the
previous calendar year which compensate the public trader for the
expenses laid down in Section 28, Paragraph five, Section
28.1, Paragraph four, Section 29.1,
Paragraph four, Section 30, Paragraph three of this Law and
Paragraph 53 of Transitional Provisions.
[6 November 2013; 17 December 2014; 19 May 2016 /
Paragraphs four and five shall come into force on 1 July
2016. See Paragraph 63 of Transitional Provisions]
Section 33.1 Trade of
Electricity to a Protected User
(1) A protected user has the right to receive the trade
service of protected user within the framework of one trade of
electricity contract.
(2) Conditions for provision of the trade service of protected
user and compensation of payment for the distribution system
service, as well as financing amount and procedures shall be
determined by the Cabinet.
(3) The order of the trade service of protected user shall be
organised by the Ministry, selecting a trader, which ensures the
provision of the trade service of protected user with the lowest
co-financing from the State budget. A contract on the provision
of the trade service of protected user shall be entered into for
two years.
(4) A poor or low-income family (person) shall receive the
trade service of protected user if the status of a poor or
low-income family (person) has been granted thereto in the
previous calendar month. The trade service of protected user
shall be provided for a large family or a family which takes care
for a child with disability, or a person with the group I
disability within the scope of a calendar year. If a family
(person) corresponds to more than one characteristic that gives
right to obtain the status of a protected user, the trade service
of protected user shall be provided thereto according to the
characteristic which provides for more favourable conditions for
the receipt of service.
(5) The Cabinet shall determine the procedures, by which a
local government shall inform the provider of the trade service
of protected user regarding poor or low-income families
(persons), which are entitled to receive the trade service of
protected user.
(6) The Cabinet shall determine the procedures by which a
large family or a family which takes care for a child with
disability, or a person with the group I disability applies for
the receipt of the trade service of protected user and
authorities which ensure provision of information to a provider
of the trade service of protected user regarding families
(persons) to which the trade service of protected user shall be
provided, the amount and deadlines of the information to be
provided.
[18 September 2014; 17 September
2015; 19 May 2016]
Section 34. Supply of Last
Resort
(1) Final customers, who have no valid electricity trade or
balancing service agreement with any of electricity traders and
who do not receive a universal service, are entitled to receive
electricity within the framework of supply of last resort. The
supply of last resort to final customers shall be ensured by a
system operator or electricity trader selected in accordance with
the procedures laid down in Section 18, Paragraph six of this
Law.
(2) In the cases laid down in Section 18, Paragraph three of
this Law a distribution system operator is entitled to receive
electricity within the framework of supply of last resort. The
supply of last resort to the distribution system operator shall
be ensured by a system operator to the networks of which the
relevant distribution system operator is connected.
(3) The procedures for determination and publication of the
price for supply of last resort for final customers referred to
in Paragraph one and distribution system operators referred to in
Paragraph two of this Section shall be regulated by the Cabinet
by ensuring such procedures for the determination of price in
order the price would motivate final customer and distribution
system operator to enter into electricity trade or balancing
service agreement.
[6 November 2013 / New wording of this Section shall
come into force on 1 April 2014. See Paragraph 39 of
Transitional Provisions]
Section 35. Right of the Final
Customer to Change Electricity Trader
(1) A final customer has the right to change an electricity
trader without restrictions on the first date of each month. The
relevant system operator shall ensure the change of the
electricity trader within a time period not exceeding 14
days.
(2) The Cabinet shall determine the procedures by which the
final customer is entitled to change electricity trader.
[6 November 2013 / New wording of this Section shall
come into force on 1 April 2014. See Paragraph 39 of
Transitional Provisions]
Section 36. Liability for
Balancing
(1) In Latvia, a transmission system operator shall ensure the
balancing. A market participant has the right to become a
balancing service provider by entering into a balancing contract
with a transmission system operator.
(2) Each market participant shall be liable for the fact that
the quantity of electricity sold by it in each trading interval
complies with the quantity of electricity entered into the system
and the quantity of electricity supplied, and the quantity of
electricity purchased complies with the quantity of electricity
received from the system.
(3) A market participant and electricity exchange participant
shall enter into a contract with a transmission system operator
or balancing service provider regarding the receipt of a
balancing service.
(4) The rights and obligations of a market participant,
balancing service provider and transmission system operator shall
be determined in the Network Code.
[8 July 2011]
Section 36.1
Responsibility of an Aggregator
(1) The Regulator is entitled to impose a penalty for an
aggregator up to 10 per cent from the net turnover of the
previous financial year of the aggregator, however not less than
EUR 300, if the aggregator:
1) provides a demand response service without registration or
infringes the provisions of a general permit;
2) does not provide information to the Regulator within a
time-frame and in accordance with the procedures laid down
thereby or provides false information.
(2) The Cabinet shall determine the rights and obligations of
an aggregator, payments for its services and relationships
between the aggregator and other participants of the system and
market.
[19 May 2016]
Section 37. The Balancing and
Calculations of Balancing
(1) In accordance with the Network Code, the transmission
system operator shall perform calculations of balancing openly
and without discrimination with respect to all recipients of a
balancing service. Recipients of balancing services have the duty
to pay for the balancing service the scope of which is determined
on the basis of the data of the transmission and distribution
system operators.
(2) Calculations of balancing shall be performed on the basis
of the accounting of electricity transactions performed in a
definite period in order to determine the volume of the balancing
electricity. The calculations of balancing shall be available to
the market and system participants involved in the transaction,
ensuring the protection of commercial secret.
(3) A system participant shall provide a system operator with
information, which is justly necessary for the balancing and
performing the calculations of balancing.
(4) A transmission system operator may request guarantees from
balancing service recipients in order to ensure the payments for
the balancing service in accordance with the Network Code.
[10 April 2008; 8 July 2011]
Chapter
VIII1
Electricity Exchange
[8 July
2011]
Section 37.1 Electricity
Market Operator
(1) [19 May 2016]
(2) The Regulator shall, by following the implementing acts of
the European Commission adopted to supplement the Regulation (EC)
No 714/2009 of the European Parliament and of the Council on
conditions for access to the network for cross-border exchanges
repealing Regulation (EC) No 1228/2003, approve and revoke an
electricity market operator, as well as monitor operation
thereof.
(3) The Regulator has the right to request information
necessary for the performance of its function from an electricity
market operator.
[4 June 2015; 19 May 2016]
Section 37.2 Basic
Principles of the Operation of the Electricity Exchange
[4 June 2015]
Section 37.3 Electricity
Exchange Transactions
The transactions of market participants, which exceed the
intervals of trade and include the physical transmission of
electricity, shall only be performed in the electricity exchange.
The transactions within one of the intervals of trade, which are
associated with the physical transmission of electricity, may be
performed by market participants either in the electricity
exchange, or by mutual agreement.
Section 37.4 Organisation
of a Direct and Indirect Tender for the Purpose of Management of
Electricity Transmission Congestion and the Prevention of
Congestion
(1) A transmission system operator, when implementing
management of transmission system congestion and preventing
overloading, may on the basis of a mutual agreement handover
management of the congestion to the electricity exchange, which
shall ensure the organisation of public electricity trading.
(2) When implementing management of transmission system
congestion and preventing overloading in relation to countries
not included in the European Economic Zone, a transmission system
operator may organise direct or indirect tenders.
Section 37.5 Electricity
Wholesale Monitoring
(1) Market participants and transmission system operator, when
performing activities in the electricity wholesale market, shall
comply with the requirements of the Regulation (EU) No 1227/2011
of the European Parliament and of the Council on wholesale energy
market integrity and transparency including prohibition of
insider trading, prohibition of market manipulation, as well as
responsibility to provide information to the Regulator and the
Agency for the Cooperation of Energy Regulators.
(2) The compliance with the Regulation referred to in
Paragraph one of this Section shall be monitored by the Regulator
within the competence laid down for it.
[10 October 2013]
Chapter
IX
Accountancy
Section 38. Separation of
Accounts
(1) A system operator shall separate the internal accounts of
an electricity supply merchant by drafting a balance sheet, a
profit-and-loss account and a cash flow statement separately for
each type of energy supply.
(2) Accountancy shall be separated in the same way as if each
of the activities referred to in Paragraph one of this Section
were performed by a separate, independent merchant.
(3) The balance sheet, the profit-and-loss account and the
cash flow statement referred to in Paragraph one of this Section
shall be derived from the annual account of the system operator
which has been drafted in accordance with the Law On the Annual
Financial Statements and Consolidated Financial Statements.
[8 July 2011; 10 October 2013; 19
May 2016]
Section 39. Submission and
Publishing of Accountancy Statements
(1) The system operator shall submit the balance sheet, the
profit-and-loss account and the cash flow statement drafted in
accordance with the procedures laid down in Section 38 of this
Law to the Regulator not later than one month after the approval
of an annual account in accordance with the procedures laid down
in the Law On the Annual Financial Statements and Consolidated
Financial Statements.
(2) The Regulator shall determine the procedures by which a
system operator shall provide customers with public access to the
balance sheet, the profit-and-loss account, the cash flow
statement and other financial information prepared in accordance
with the procedures laid down in Section 38 of this Law.
[10 October 2013; 19 May 2016]
Section 40. Prohibition of
Cross-Subsidies
(1) The activities, which a market participant performs by
transferring expenses or other liabilities among electricity
production or trade and transmission, distribution or other type
of commercial activity, shall be regarded as cross-subsidies.
(2) Cross-subsidies are prohibited.
Chapter X
Liability for Non-compliance with the Requirements
[10 October 2013 / This
Chapter shall come into force on 3 July 2014. See
Paragraph 31 of Transitional Provisions]
Section 41. Responsibility of a
Transmission System Operator
The Regulator is entitled to impose a penalty for a
transmission system operator up to 10 per cent from the net
turnover of the previous financial year of the transmission
system operator, however not less than 300 euro, if the
transmission system operator:
1) is providing transmission system services without a
licence, fails to comply with the conditions of a licence issued
to him or transfers to other persons the licence issued to
him;
2) does not ensure planning, construction and putting into
service of new transmission infrastructure objects and drafting
of a 10-year plan for the transmission system development in
conformity with the requirements of the Regulator;
3) fails to comply with the system connection regulations laid
down by the Regulator, does not provide connection to the
transmission system or does not inform the Regulator regarding
the cases when a transmission system operator has refused access
to the system for a market participant;
4) does not ensure the conformity to the certification
requirements for a transmission system operator laid down in this
Law;
5) does not submit notifications to the Regulator regarding
the conformity thereof to the certification requirements,
including the requirements of independence of a transmission
system operator;
6) does not develop the Network Code, including amendments to
the Network Code, and does not ensure the performance of the
procedures laid down in the Network Code;
7) does not ensure protection for the restricted access
information which it has received from the system participants
and market participants while performing its duties;
8) does not comply with the requirements of Regulation (EU) No
1227/2011 of the European Parliament and of the Council on
wholesale energy market integrity and transparency;
9) does not provide information to the Regulator within the
time period and in accordance with the procedures laid down
thereby or provides false information;
10) does not separate internal accounting thereof, does not
submit a balance sheet, profit or loss account and cash flow
statement to the Regulator or violates the prohibition of
cross-subsidies.
Section 42. Liability of
Distribution System Operator
The Regulator is entitled to impose a penalty for a
distribution system operator up to 10 per cent from the net
turnover of the previous financial year of the distribution
system operator, however not less than 300 euro, if the
distribution system operator:
1) is providing distribution system services without a
licence, fails to comply with the conditions of a licence issued
to him or transfers to other persons the licence issued to
him;
2) does not ensure operation, servicing and safety, management
and development of the distribution system operators, connection
thereof with other systems and continuous ability to transport
electricity;
3) does not comply with the system connection regulations laid
down by the Regulator, does not provide connection to the
distribution system or does not inform the Regulator regarding
the cases when a distribution system operator has refused access
to the system for a market participant;
4) does not ensure protection for the restricted access
information which it has received from the system participants
and market participants while performing its duties;
5) does not comply with the requirements of independence of a
distribution system operator, including the requirement to
develop the conformity programme and provide a report regarding
the measures taken to comply with it;
6) does not provide information to the Regulator within a
time-frame and in accordance with the procedures laid down
thereby or provides false information;
7) does not separate internal accounting thereof, does not
submit a balance sheet, profit or loss account and cash flow
statement to the Regulator or violates the prohibition of
cross-subsidies.
Section 43. Liability of Electricity
System Owner
The Regulator is entitled to impose a penalty for an
electricity system owner up to 10 per cent from the net turnover
of the previous financial year of the electricity system owner,
however not less than 300 euro, if the electricity system
owner:
1) does not comply with the requirements of independence of an
electricity system owner, including the requirement to develop
the conformity programme and provide a report regarding the
measures taken to comply with it;
2) does not provide a report to the Regulator on the ability
of the electricity system owner to comply with the commitments
laid down in this Law;
3) does not co-operate with the transmission system operator
and provide to it information necessary for the performance of
the responsibilities of the transmission system operator;
4) discloses the restricted access information to other
structures of vertically integrated electricity merchant;
5) does not finances the investments in the transmission
system regarding which the transmission system operator has
decided and which are approved by the Regulator;
6) does not provide information to the Regulator within the
time period and in accordance with the procedures laid down
thereby or provides false information.
Section 44. Liability of Electricity
Producer
The Regulator is entitled to impose a penalty for an
electricity producer up to 10 per cent from the net turnover of
the previous financial year of the electricity producer, however
not less than 300 euro, if the electricity producer:
1) provides electricity production service without
registration or infringes the provisions of a general permit;
2) does not provide information to the Regulator within a
time-frame and in accordance with the procedures laid down
thereby or provides false information.
Section 45. Liability of Electricity
Trader
The Regulator is entitled to impose a penalty for an
electricity trader up to 10 per cent from the net turnover of the
previous financial year of the electricity trader, however not
less than 300 euro, if the electricity trader:
1) provides electricity trade service without registration or
infringes the provisions of a general permit;
2) does not include the information determined by the
Regulator in the invoices and informative materials to be issued
to a final customer;
3) does not provide information to the Regulator within the
time period and in accordance with the procedures laid down
thereby or provides false information.
Section 46. Liability of Market
Participant
The Regulator is entitled to impose a penalty for market
participant up to 10 per cent from the net turnover of the
previous financial year of the market participant, however not
less than 300 euro, if the market participant does not comply
with the requirements of the Regulation (EU) No 1227/2011 of the
European Parliament and of the Council on wholesale energy market
integrity and transparency including prohibition of insider
trading, prohibition of market manipulation, as well as
responsibility to provide information to the Regulator and the
Agency for the Cooperation of Energy Regulators.
Section 47. Administrative Case
Proceedings
(1) If the Regulator determines that the system operator,
electricity system owner, electricity producer, electricity
trader, aggregator or market participant does not comply with the
requirements of this Law, the Regulator may take one or several
of the following decisions:
1) to impose an obligation to ensure the compliance with the
relevant requirements of this Law within the specific time
period;
2) to express a warning;
3) to impose a penalty referred to in Section 41, 42, 43, 44,
45 or 46 of this Law.
(2) If the Regulator has taken a decision by which it has
imposed an obligation to ensure the compliance with the relevant
requirements of this Law and expressed a warning, but a system
operator, electricity system owner, electricity producer,
electricity trader or market participant has not fulfilled such
decision within a time-frame laid down by the Regulator, the
Regulator is entitled to take a decision to impose a penalty.
(3) An administrative act of the Regulator issued in
accordance with this Law may be appealed to the Administrative
Regional Court. The Administrative Regional Court shall examine
the case as a court of first instance in the composition of three
judges. A judgement of the court may be appealed by submitting
appeal in cassation.
(4) Submission of the application to the court for the
revocation, recognition as repealed or not in force of the
administrative act referred to in Paragraph one of this Section
shall not suspend the operation of such administrative act,
except for the operation of the administrative act in the part
regarding imposition of the penalty.
(5) The penalty referred to in Sections 41, 42, 43, 44, 45 and
46 of this Law shall be paid in the State budget and it may not
be included in expenditure covered by a user.
(6) The Cabinet shall issue the regulations regarding the
procedures for determination of the amount of the penalty where
the procedures for calculation of net turnover of the financial
year, the procedures for calculation of the amount of the penalty
are intended taking into account the severity and duration of the
relevant infringement, attenuating and aggravating circumstances,
as well as determining the cases when the penalty may be
reduced.
[19 May 2016]
Transitional
Provisions
1. Paragraphs one and two of Section 19 of this Law shall come
into force on 1 July 2007.
2. Paragraph two of Section 35 of this Law regarding household
customers shall come into force on 1 July 2007.
3. Until 1 July 2007 all distribution system operators shall
apply Section 19, Paragraph four of this Law in the activities
thereof.
4. [17 December 2014]
5. The Cabinet shall issue the regulations referred to in
Section 9, Paragraph three, Section 15, Paragraph two, Section
22, Paragraph one, Section 28, Paragraphs two and seven, Section
29, Paragraphs two and four, Section 30, Paragraph three, Section
32, Paragraph five, Section 33, Paragraph two and Section 34,
Paragraph one of this Law by 1 January 2006. Until the day of
coming into force of these regulations the following Cabinet
Regulations shall be applied as far as they do not contradict
this Law:
1) the 22 October 1996 Cabinet Regulation No. 413, Regulations
for Supply and Use of Electricity;
2) the 21 September 1999 Cabinet Regulation No. 326,
Regulations regarding Eligible Electricity Customers;
3) the 8 January 2002 Cabinet Regulation No. 9, Requirements
for Co-generation Stations and Procedures by which Purchase Price
of Surplus Electricity Produced shall be Determined;
4) the 15 January 2002 Cabinet Regulation No. 29, Procedures
for Installation and Location of Electric Power Generation
Capacities if Renewable Energy Resources are Utilised for
Electric Power Generation.
6. The Regulator shall issue the laws and regulations
specified in Section 8, Paragraph two, Section 12, Paragraph
three, Section 19, Paragraph three, Section 30, Paragraph three,
and Section 39, Paragraph two of this Law by 1 January 2006.
7. The Network Code approved by the Regulator in accordance
with Section 28, Clause 8 of the Energy Law shall be applied
until the approval of the Network Code.
8. The Network Code referred to in Paragraph two of Section 4
of this Law and the criteria and procedures for requesting the
guarantees referred to in Paragraph four of Section 37 shall be
submitted to the Regulator for approval by 1 January 2006.
9. The Cabinet shall issue regulations for thermal energy
supply and utilisation and gas supply and utilisation by 1
January 2006. Until the day of coming into force of these
Regulations the following Cabinet Regulations, which have been
issued in accordance with Section 5, Paragraph two of the Energy
Law, shall be applied:
1) the 28 February 1995 Cabinet Regulation No. 41, Regulations
for Supply and Use of Thermal Energy;
2) the 20 January 1998 Cabinet Regulation No. 23, Regulations
for Supply and Use of Gas.
10. Administrative cases, which until 14 May 2008 have been
initiated in an administrative court regarding the bills issued
by system participants or electricity traders or documents
related thereto, shall be completed to be examined by the
administrative court in accordance with the Administrative
Procedure Law.
[10 April 2008]
11. Amendments to Section 8, Paragraph two of this Law in
relation to regulations for a connection for producers and
customers, amendments to Section 9, Paragraph two in relation to
division of costs between a system participant and system
operator, as well as Section 9, Paragraph 2.1 shall
come into force on 1 September 2008.
[10 April 2008]
12. The Regulator shall, until 1 September 2008, issue the
regulations and methodology referred to in Section 8, Paragraph
two of this Law.
[10 April 2008]
13. The Cabinet shall, until 1 September 2008, issue the
regulations referred to in Section 9, Paragraph 2.1,
Clause 2 of this Law.
[10 April 2008]
14. A system operator shall install the connections, the
contracts regarding installation of which in accordance with
Section 8, Paragraph two and Section 9, Paragraph two of this Law
have been entered into until 31 August 2008, pursuant to the
connection regulations of those participants and in accordance
with the methodology for calculation of connection fee determined
by the Regulator which was in force at the time of entering into
the contract.
[10 April 2008]
15. Section 28.1 and 29.1 of this Law
shall come into force on 1 January 2009.
[10 April 2008]
16. The Cabinet shall, until 1 January 2009, issue the
regulations referred to in Section 28.1, Paragraphs
two and five, as well as Section 29.1 Paragraphs two
and five of this Law.
[10 April 2008]
17. The Regulator shall, until 1 January 2009, issue the
normative acts referred to in Section 23, Paragraph seven,
Section 28.1, Paragraph four and Section
29.1 Paragraph four of this Law.
[10 April 2008]
18. The investment of the assets and commitments of a
transmission and distribution system in the electricity system
owner or distribution system operator as the acquiring company's
share capital is considered to be the handing over of economic
activity within the meaning of Section 1, Paragraph fourteen of
the Law On Taxes and Fees, and the application thereon of the
provisions of Section 6.2 of the Law On Taxes and Fees
with the provision that the electricity system owner or
distribution system operator within 12 months take over from one
or more "Latvenergo" group companies assets and commitments
associated with the activities of a transmission and distribution
system.
[8 July 2011]
19. Amendments to Section 32, Paragraphs one and two and
Section 38, Paragraph one of this Law shall enter into force on 1
January 2012.
[8 July 2011]
20. Section 1, Paragraph two, Clause 23, Sections
26.1 and 32.1 of this Law shall come into
force on 1 January 2012. Electricity producers and traders, which
have licences for the production and trade of electricity valid
on 1 January 2012, shall not have to submit a notification
regarding registration. Such electricity producers and traders
shall be registered in the relevant register by the Regulator on
its own initiative.
[8 July 2011]
21. While the decision specified in Section 11.1 of
this Law has not been taken regarding the certification of a
transmission system operator, the functions of the transmission
system operator shall be performed by an electricity merchant,
which has been issued a licence for the transmission of
electricity.
[8 July 2011]
22. The Regulator shall by 1 March 2012 issue the laws and
regulations referred to in Section 8, Paragraph two, Section
11.1, Paragraphs four and ten, Section 12, Paragraphs
three and four, Section 15.1, Paragraph two, Section
16, Section 19, Paragraphs three and four, Section
21.1, Paragraphs four and five of this Law. The
following laws and regulations issued by the Regulator shall be
in force until the day of the coming into force of the relevant
laws and regulations, but not later than until 1 March 2012,
insofar as such Regulations are not in contradiction with this
Law:
1) Regulations Regarding the Minimum Requirements for the
Independence of an Electricity System Operator approved by
Regulator Council Decision No. 37 of 8 February 2006;
2) The Tariff Calculation Methodology for Electricity
Transmission System Services approved by Regulator Council
Decision No. 556 of 28 November 2007;
3) Electricity Tariff Calculation Methodology for Captive
Consumers approved by Regulator Council Decision No. 592 of 12
December 2007;
4) Regulations for a System Connection for Electricity
Producers approved by Regulator Council Decision No. 280 of 3
September 2008;
5) Regulations for a System Connection for Electricity System
Participants approved by Regulator Council Decision No. 74 of 1
April 2009.
[8 July 2011]
23. A transmission system operator shall by 1 September 2011
submit an application to the Regulator regarding its
certification in accordance with Section 11.1 of this
Law.
[8 July 2011]
24. A transmission system operator shall by 1 October 2011
draft and submit to the Regulator a Network Code. Until the day
of this regulatory enactment coming into effect the Network Code
approved by Regulator Council Decision No. 1/3 of 24 February
2010 shall be in force.
[8 July 2011]
25. The Cabinet shall issue the regulations referred to in
Section 35, Paragraph two of this Law by 1 October 2011. Until
the day of coming into force of this Regulation, but not later
than 1 October 2011, Cabinet Regulation No. 793 of 21 July 2011,
Regulations for the Trade and Use of Electricity, shall be
applied, insofar as they are not in contradiction with this
Law.
[8 July 2011]
26. [19 May 2016]
27. The Regulator shall, by 1 January 2012, issue the laws and
regulations referred to in Section 26.1, Paragraphs
two and four and Section 32.1, Paragraphs two and
three of this Law.
[8 July 2011]
28. Until 1 January 2014 the Cabinet shall issue the
regulations referred to in Section 30.1, Paragraph
four of this Law.
[10 October 2013]
29. Until 1 January 2014 the Regulator shall issue the laws
and regulations referred to in Section 26.1, Paragraph
four and Section 32.1, Paragraph three of this Law.
Until the day of coming into force of these laws and regulations,
however not longer than until 1 January 2014, the Regulator
Decision No.1/31 of 23 November 2011, Regulations for the
Registration of Energy Producers and Traders, shall be
applied.
[10 October 2013]
30. Until 1 April 2014 the Cabinet shall issue the regulations
referred to in Section 47, Paragraph six of this Law.
[10 October 2013 / See Paragraph 31 of Transitional
Provisions]
31. Chapter X of this Law shall come into force concurrently
with the relevant amendments to the Latvian Administrative
Violations Code.
[10 October 2013]
32. In addition to the responsibilities referred to in Section
33, Paragraph two of this Law, that are performed by a public
trader, from 1 January 2014 it shall pay a guaranteed payment for
the installed electric capacity in accordance with the procedures
laid down in Section 28.1 of this Law and, complying
with non-discriminating attitude, ensure re-entering of those
previously entered into agreements on the basis of which the
payments are made for the electric capacity installed in a
co-generation station.
[6 November 2013; 19 May 2016]
33. Until 1 April 2014 the Cabinet shall issue the regulations
referred to in Section 32, Paragraph three, Section 34, Paragraph
three and Section 35, Paragraph two of this Law.
[6 November 2013; 20 March
2014]
34. Until 1 March 2014 the Regulator shall issue the laws and
regulations referred to in Section 28, Paragraph five, Section
28.1, Paragraph four, Section 29.1,
Paragraph four and Section 30, Paragraph three of this Law. Until
the day of coming into force of the relevant laws and
regulations, however not longer than until 1 March 2014, the
Methodology for Calculation of Components of Mandatory
Procurement approved by the Regulator's Council Decision No. 1/9
of 28 August 2013 shall be applied.
[6 November 2013]
35. If a household user does not have a trade agreement in
effect with an electricity trader on supply of the user with
electricity from 1 January 2015, electricity supply for such user
shall be provided by the present trader in accordance with the
conditions of a universal service offer. The user has a duty to
pay accordingly for the received services.
[6 November 2013; 20 March
2014]
36. From 1 April 2014 the responsibilities of a public trader
are performed by a merchant who has a valid electricity trade
licence on 31 March 2014, a subsidiary which is registered in the
Register of Electricity Traders (hereinafter - a successor in
responsibilities of a public trader).
[6 November 2013]
37. A successor in responsibilities of a public trader shall,
within 12 months from the commencement of performance of the
responsibilities of a public trader, compensate the difference of
mandatory procurement expenses and received mandatory procurement
component payment exceeding the market price to the previous
performer of the responsibilities of a public trader for a time
period from 1 January 2013 until 31 December 2013.
[6 November 2013]
38. Successor in responsibilities of a public trader shall,
within 12 months from the commencement of performance of the
responsibilities of a public trader, compensate the difference of
mandatory procurement expenses and received mandatory procurement
component payment exceeding the market price to the previous
performer of the responsibilities of a public trader, as well as
a disbursed guaranteed payment for the electric capacity
installed in a co-generation plant for a time period from 1
January 2014 until 31 March 2014. Such expenses shall be covered
by all electricity final customers in Latvia in proportion to
their electricity consumption by compensating the expenses for a
public trader. The Regulator shall determine the methodology of
the expense extension calculation.
[6 November 2013]
39. Amendments to Section 1 of this Law regarding deleting
Clause 17, stating Section 32, Paragraph three in new wording and
deleting Paragraph six, and also stating Section 33, 34 and 35 in
new wording shall come into force on 1 April 2014.
[6 November 2013]
40. From 1 April until 31 December 2014 the supply of
electricity to captive consumers shall be ensured by the stock
company "Latvenergo" or a distribution system operator to a
distribution network of which are connected at least one hundred
thousand customers. In such case the following shall be
applicable:
1) the provisions of this Law and of the laws and regulations
issued on the basis thereof in force on 31 March 2014 regulating
the supply of electricity to captive consumers;
2) the decisions taken on the basis of Section 33, Paragraph
three of this Law in the wording in which it was in force on 31
March 2014.
[20 March 2014]
41. From 1 April until 31 December 2014 the Cabinet Regulation
No. 914 of 29 November 2011, Regulations Regarding the Trade and
Use of Electricity, shall be applicable to electricity supply
to:
1) captive consumers in accordance with Paragraphs 40 and 42
of these Transitional Provisions;
2) those captive consumers which have become the market
participants but until 1 June 2014 have selected to refuse from
the use of the right of choice of a trader and receive
electricity in accordance with Paragraphs 40 and 42 of these
Transitional Provisions.
[20 March 2014]
42. In the cases referred to in Paragraphs 40 and 41 of these
Transitional Provisions the electricity to captive consumers
shall be supplied complying with all those decisions (including
decisions of the Public Utilities Commission and a public trader)
which have been taken on the basis of Section 33, Paragraph three
of this Law in such wording which was in force on 31 March
2014.
[20 March 2014]
43. By the term "captive consumer" used in Paragraphs 40, 41
and 42 of these Transitional Provisions shall be meant a final
customer who until 31 March 2014 has the right to receive a
universal service.
[20 March 2014]
44. From 1 January 2015 to 31 December 2015 the trade service
of protected user shall be as follows:
1) for a poor or low-income family (person) trade of
electricity of no more than 100 kilowatt hours for the price of
0.0131 euros per one kilowatt hour in each period of settlement
of accounts (calendar month);
2) for a large family trade of electricity of no more than 300
kilowatt hours for the price of 0.0131 euros per one kilowatt
hour in each period of settlement of accounts (calendar
month).
[18 September 2014]
45. For the amount of electricity which exceeds the amount of
the trade service of protected user referred to in Paragraph 44
of these Transitional Provision in the period of settlement of
accounts the protected user shall pay the price of electricity
offered by the provider of the trade service of protected user
and selected by the protected user or the universal service price
stipulated by the provider of the trade service of protected
user.
[18 September 2014]
46. The provision of the trade service of protected user from
1 January 2015 to 31 December 2015 shall be ensured by the stock
company "Latvenergo".
[18 September 2014]
47. From 1 January 2016 the provision of the trade service of
protected user shall be provided and co-financed from the State
budget in accordance with the procedures laid down in Section
33.1 of this Law.
[18 September 2014]
48. By 1 June 2015 the Cabinet shall issue the regulations
referred to in Section 33.1, Paragraphs two and five
of this Law. Until the day of coming into force of the Cabinet
regulations referred to in Section 33.1, Paragraph
five of this Law the local government shall, by the eighth date
of each month, using the State information system integrator,
provide the following data of protected users to the provider of
the trade service of protected user: given name, surname,
personal identity number, number of the trade of electricity
contract, address of the object consuming electricity, address of
the place of residence and contact information, if such is
available.
[18 September 2014; 17 September
2015]
49. Amendments regarding deletion of Section 1, Paragraph two,
Clause 12 of the Law shall come into force concurrently with
respective amendments to the Energy Law.
[17 December 2014]
50. The distribution system operator referred to in Section
19, Paragraph one of this Law, which is a part of a vertically
integrated energy supply merchant, shall ensure no later than
from 1 January 2016 that its identity is separated from the
identity of the trade structure of the vertically integrated
energy supply merchant.
[17 December 2014]
51. The producers who use renewable energy resources for the
production of electricity and have started the operation prior to
the coming into force of this Law shall, from 1 January 2015,
lose the right to sell electricity to a public trader in
accordance with such conditions regarding the operation mode,
procurement terms and price, which applied thereto at the moment
of the coming into force of this Law.
[17 December 2014]
52. The producers who use renewable energy resources for the
production of electricity and have started the operation prior to
the coming into force of this Law, and have not exercised the
right specified in Section 30, Paragraph 1.1 of this
Law, have the right, from 1 January 2015, but no later than for
20 years from the date of commencement of operation of the power
plant, to sell electricity to the public trader for the price of
0.1112 euros per kilowatt hour.
[17 December 2014]
53. The public trader shall record separately such amount and
costs of electricity which has been procured in accordance with
Paragraph 52 of these Transitional Provisions. The expenses of
such procurement shall be covered by all electricity final
customers of Latvia in proportion to their electricity
consumption by compensating the expenses of the procurement for a
public trader. The State budget subsidy for the reduction of the
amount of mandatory procurement components laid down in the
Medium-term Budget Framework Law shall be taken into account for
the calculation of expenses to be compensated. The State budget
subsidy shall be applied to those expenses to be compensated to
which the reduced participation in compensating the public trader
for the expenses in accordance with the procedures laid down in
Section 30.2, Paragraph one of this Law does not
apply. The Regulator shall determine the methodology of the
expense extension calculation. A public trader shall include the
difference of expenses to be compensated and the relevant income
of the public trader in assets or liabilities of the accounting
year.
[19 May 2016]
54. The Regulator shall, by 1 March 2015, issue a new
regulatory enactment referred to in Section 16, Paragraph one of
this Law. Until the day of coming into force of the relevant
regulatory enactment, however, no longer than until 1 March 2015,
the Regulator's Council Decision No. 1/23 of 26 October 2011,
Tariff Calculation Methodology for Electricity Transmission
System Services approved, shall be applied.
[17 December 2014]
55. Section 30.2 of this Law shall come into force
on 1 July 2015. The Cabinet shall, by 30 June 2015, issue the
Cabinet regulations referred to in the relevant Section,
providing for that such regulations shall come into force after
the European Commission has taken a decision on conformity of the
measure with the joint market of the European Community.
[17 December 2014]
56. Amendments regarding deletion of Section 28, Paragraph
seven, Section 28.1, Paragraph five and Section 29,
Paragraph five of this Law shall come into force on 1 October
2016.
[19 May 2016 / The above mentioned amendment shall
be included in the wording of the Law as of 1 October
2016]
57. Cabinet Regulation No. 221 of 10 March 2009, Regulations
Regarding Electricity Production and Price Determination upon
Production of Electricity in Co generation, shall be applied to
merchants to which the right to sell the electricity produced in
co-generation within the framework of the mandatory procurement
or the right to receive a guaranteed payment for the installed
electric capacity has been granted before 12 December 2012 until
the day when all rights granted for such merchants become
invalid.
[19 May 2016]
58. Cabinet Regulation No. 262 of 16 March 2010, Regulations
Regarding the Production of Electricity Using Renewable Energy
Sources and the Procedures for the Determination of the Price,
shall be applied to merchants to which the right to sell
electricity produced from renewable energy sources within the
scope of mandatory procurement or the right to receive a
guaranteed payment for the electric capacity installed in a
co-power plant has been granted before 29 April 2015 until the
day when all rights granted for such merchants become
invalid.
[19 May 2016]
59. The Cabinet shall, until 1 September 2017, issue
amendments to Cabinet Regulation No. 1227 of 27 October 2010,
Regulations Regarding Types of Regulated Public Utilities,
regarding the inclusion of demand response services as a type of
regulated public utilities.
[19 May 2016]
60. By 1 October 2016 the Cabinet shall issue the regulations
referred to in Section 29.2 of this Law. Until the day
of coming into force of the relevant Cabinet regulations, but no
longer than until 30 September 2016, Cabinet Regulation No. 900
of 22 March 2011, Regulations Regarding the Receipt of a
Guarantee of Origin for Electricity, Which Has Been Produced,
Utilising Renewable Energy Sources, shall be applied.
[19 May 2016]
61. Until 31 December 2018 the Cabinet shall issue the
regulations referred to in Section 36.1, Paragraph two
of this Law.
[19 May 2016]
62. By 1 January 2018 the Cabinet shall issue the regulations
referred to in Section 30.3 of this Law.
[19 May 2016]
63. Section 21.1, Paragraphs six and seven, and
Section 33, Paragraphs four and five of this Law shall come into
force on 1 July 2016.
[19 May 2016]
64. Until 1 September 2016 the Cabinet shall issue the
regulations referred to in Section 9, Paragraph 2.3 of
this Law.
[19 May 2016]
65. Section 32.2 of this Law shall come into force
on 1 January 2019.
[19 May 2016 / The above mentioned amendment shall
be included in the wording of the Law as of 1 January
2019]
66. The payment period of the electricity net payment laid
down in Section 30.1, Paragraph one of this Law which
begins on 1 January 2016 shall end on 31 March 2017.
[19 May 2016]
Informative
Reference to European Union Directives
[10 April 2008;
8 July 2011; 19 May 2016]
This Law contains legal norms arising from
1) Directive 2001/77/EC of the European Parliament and of the
Council of 27 September 2001 on the promotion of electricity
produced from renewable energy sources in the internal
electricity market;
2) Directive 2003/54/EC of the European Parliament and of the
Council of 26 June 2003 concerning common rules for the internal
market in electricity and repealing Directive 96/92/EC;
3) Directive 2004/8/EC of the European Parliament and of the
Council of 11 February 2004 on the promotion of co-generation
based on a useful heat demand in the internal energy market and
amending Directive 92/42/EEC.
4) Directive 2005/89/EC of the European Parliament and of the
Council of 18 January 2006 concerning measures to safeguard
security of electricity supply and infrastructure investment;
5) Directive 2009/72/EC of the European Parliament and of the
Council of 13 July 2009 concerning common rules for the internal
market in electricity and repealing Directive 2003/54/EC (Text
with EEA relevance);
6) Directive 2009/28/EC of the European Parliament and of the
Council of 23 April 2009 on the promotion of the use of energy
from renewable resources and amending and subsequently repealing
Directives 2001/77/EC and 3003/30/EC;
7) Directive 2012/27/EU of the European Parliament and of the
Council of 25 October 2012 on energy efficiency, amending
Directives 2009/125/EC and 2010/30/EU and repealing Directives
2004/8/EC and 2006/32/EC.
The Saeima has adopted this Law on 5 May 2005.
President V. Vīķe-Freiberga
Rīga, 25 May 2005
1 The Parliament of the Republic of
Latvia
Translation © 2017 Valsts valodas centrs (State
Language Centre)
