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  • NEURC HAS APPROVED CONGESTION MANAGEMENT RULES AND CROSS-BORDER CAPACITY ALLOCATION PROCEDURE

    NEURC has approved a new regulation document “Congestion Management Rules”, and a new wording of “Cross-border capacity allocation procedure”. The resolution was approved at the meeting on April 3, 2020.

    The Rules establish the procedure and requirements for congestion management, the procedure for the determination of the capacity allocation structure, the procedure for releasing  information on cross-border capacity, etc. The new Cross-border capacity allocation procedure determines the auctioning rules for cross-border capacity allocation.

    The resolution provides for a number of innovations:

    On financial security for participation in the auction:

    • loan limitation, on which the value of bids submitted by the bidders depends;
    • mechanism for verification of financial warranties according to price bids;
    • possibility for varying financial security during the auction by using escrow accounts.

    On forming auction details:

    • the volume of product may not correspond to the probable supply volume due to the reduction periods;
    • at yearly and monthly auctions, there can be only one product, which does not depend on NTC profile;
    • the requirement to ensure maximum reserve stability was abolished;
    • a product is auctioned for the yearly auction from January 1 to December 31;
    • a product is auctioned for the monthly auction from the first day of the month to the last day of the month;
    • ”netting” rule for daily auctions is introduced.

    On auctioning conditions:

    • at monthly auctions, there will be a possibility to suspend annual rights for intersections from preliminary to final auction details;
    • the results of long-term auctions are determined in two stages: 1 – preliminary results and 2 – final results. Between the stages, there is a period for appealing the results;
    • one participant is allowed not more than 50% of the intersection.

    On restoring the rights:

    • annual rights for the use of intersection can be returned only prior to monthly auction further through non-nomination;
    • monthly rights for the use of intersection can be returned only through non-nomination.

    Refunding for returning and non-nomination:

    • the money is refunded at the resale price, if during the period of supply the reduction procedure was not applied;
    • if during the period of supply the reduction procedure was applied, the money is refunded at the primary auction price.

    Refunding for limitations:

    • the money is refunded for any reasons, including balancing ones.

    The resolution shall enter into force upon its publication on the official NEURC website. Annex 2 “Methodology for determining the structure of cross-border capacity allocation” and the norms related to capacity allocation auctioning – in six months after this resolution enters into force.

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