THE MOST RECENT AMENDMENTS TO THE LAW ON RENEWABLE ENERGY SOURCES

At the end of 2011 a second bill was introduced into parliament for the revision of the Law on Renewable Energy Sources. On 28th March 2012 the amendments in the law were voted at second reading, and they will be published in the State Gazette.
What essentially are the amendments:
Amended is the moment of determining the preferential purchase price of the electric energy produced from RES (renewable energy sources) by the public supplier. Under the hitherto valid regulation that moment was the date of the Protocol of Findings concerning the construction of the power project pursuant to art.176, par. 1 of the Law on Renewable Energy Sources – more popular as Act 15. Under the new provision the defining moment will be the date of commissioning the project into operation, effectively as of the date of the issuance of Protocol for that in accordance with the Spatial Development Act or the accepted term in the practice of issuing act-form 16. The motives for this amendment are obvious as far as act-form 15 is signed between the investor and the main contractor of the project – without control and presence of the state authorities. Obviously the system is being abused, i.e. act-form 15 is being signed in breach of the law, when the project is still unfinished, with the sole purpose to secure a preferential effective price determined by the State Energy and Water Regulatory Commission for the relevant period.
Regrettably the new provision does not distinguish between the two moments – the two stages of the commissioning of the energy project: the issuance of act-form 16 of the State Inspection Committee and the issuance of the Certificate for Commissioning into Operation. It is well known that between these two stages there is a time period of between a week and a month, which may prove crucial for certain energy enterprises with respect to the preferential price they might get.
Intriguing is also the decision concerning the energy projects which as of the date of coming of the law into force have already been granted an effective act-form 15. Obviously, with a view to avoid the retroactive action of the law the rights of the energy plants that have already reached this stage of construction have not been overridden. The organs of the State Construction Control are assigned the obligation to inspect such energy plants and certify with a protocol the conformity to act-form 15 regarding the actual condition of the plant, as well as the compliance with all the requirements of the Spatial Development Act and other relevant legal regulations. The author of this paper holds the view that the legislative decision giving the organs of the State Construction Control the right to pronounce a judgment on the compliance of an issued act-form 16 to a protocol is unacceptable. The protocol is a written statement of ascertainment – it is a document with which the administrative body certifies the presence or lack of certain administrative or legal prerequisites at a given moment. In this case the protection of the interests of the investor in the energy companies who disagree with the stated in the Protocol remains somewhat unclear. This is so, because as no administrative act is issued, appealing against the Protocol under an administrative procedure will most likely prove inadmissible. The only way the investor can defend himself will be to claim damages through a general claim procedure against the authorities of National Construction Control Directorate.
An interesting amendment is made concerning the construction of power plants for the generation of electric power from renewable sources through assistance funds from national and European programs. According to the hitherto existing provision of the law, such power plants have never resorted to the two elements encouraging the production of electric power from RES – namely, preferential prices and guaranteed time limits for the purchase of the produced electric power. Under the new revised provision of the law, such companies are granted the right to make use of the time limits for purchase of electric power, with the prices being determined again by the State Energy and Water Regulatory Commission, pursuant to a special regulation which is yet to be published.
Some of the restrictions concerning projects that have been commissioned into operation by stages have been lifted. The new regulations introduce, in the author’s view, a more just decision – the rules for determining the purchase prices will be taking effect from the moment of commissioning into operation of each of the stages. Provision is made for the installation of measuring equipment for the purposes of certifying the completion of each stage of a power plant, respectively for the purchase at prices and conditions effective as of the moment of operation of the specific part of the power plant.
A schedule for extending the network of electric distributing companies is prepared, which provides for the staged development and expansion of the capacities related to the possibilities for the commissioning into operation of new electric power generating plants. This provision refers primarily to the persons who have concluded a preliminary contract for connection to the electric grid. These persons are obligated by law to provide a statement regarding their consent or dissent to the time limit set in the schedule for connecting to the grid. In the event of expressed consent, the time limit for connecting to the grid is fixed according to a schedule set in an additional annex to the contract for the connection. The guarantees given by the persons must be valid and provided in time. In case a dissent is expressed to the time limit for connecting to the grid, the preliminary contract for connection of the power plant will be considered terminated by law. If no statement of opinion is made within one month’s time of the receipt of a notification of the schedule and the term, then the parties will have to bear in mind that the legal sanction is termination of the preliminary contract. Regrettably the law does not make provision for the consequences of this kind of termination and there again exists ambiguity concerning the possibility of lodging eventual future claims for damages suffered by the power plants and their investors against the electric distributing companies.
Author of the article: the article is written on 29 March 2012.