National Commission for State Regulation of Energy and Public Utilities recommends that govt agencies, their electricity suppliers terminate contracts if they’re unable to fulfill them

The National Commission for State Regulation of Energy and Public Utilities recommends that consumers of electricity, particularly government agencies and organizations that purchase electricity through the public procurement system, and their suppliers, terminate supply contracts if they are unable to fulfill them.

"The National Commission for State Regulation of Energy and Public Utilities recommends that, in the event of an objective impossibility of fulfilling a contract under the current terms, the parties consider terminating the contract and conducting a new procurement procedure for a new term in accordance with legal requirements," the regulator noted in a clarification on its website on Monday.

As the commission explained, the National Commission for State Regulation of Energy and Public Utilities receives complaints from consumers, particularly government agencies and organizations that purchase electricity through the public procurement system. The main problem is difficulties in fulfilling electricity supply contracts due to significant fluctuations in market prices.

Electricity suppliers, for their part, note that prices depend on market conditions and can fluctuate significantly, either up or down. This particularly applies to the day-ahead market, where prices are determined based on supply and demand.

The National Commission for State Regulation of Energy and Public Utilities explained that most electricity supply contracts contain pricing mechanisms linked to market indicators. At the same time, electricity is a specific commodity characterized by simultaneous production, transportation, and consumption, making it impossible to accumulate or store.

"In this regard, fluctuations in electricity prices may exceed the legally established limits for changes in contract prices and are independent of both the consumer and the supplier," the regulator stated.

In order to resolve these situations, ensure continuous supply of electricity, and comply with legal requirements, the National Commission for State Regulation of Energy and Public Utilities recommended that parties in such cases terminate existing contracts and conduct new purchases.