Connection to the electrical networks: what you need to know, in order not to fall into a trap of Regional Power Distribution Company

One of the important steps towards establishing an own business in Ukraine, whether it is opening a small store for retail trade or creation of a large-scale enterprise, is the electrification of such an object. This process is called connection to electrical networks. Complexity, duration and unsettlement of the procedure led to the fact that, on the base of ease of connection to the electricity grid, Ukraine is in 135 place out of 190 possible.
The situation completely changed in 2017, after adoption of the Law “On the Electricity Market”. Its implementation has been taking 2 years. During this time, The National Commission for State Regulation in the Energy Sector (in Ukrainian – NKREKP) adopted a number of important regulations, including: Rules for the Retail Electricity Market, Code of Distribution Systems, Code of Commercial Accounting.
We propose to consider the main changes in the connection procedure that took place during this period.
First of all, let’s remind you that there are two main types of connection:

  • Standard – the connection of the customer’s electrical installation to the operating networks of the distribution system operator at a distance of not more than 300 m. in a straight line and up to 50 kW inclusive.

Standard connection is separately divided into two stages, depending on the required power:

  • The first – up to 16 kW inclusively;
  • The second – from 16 to 50 kW.
  • Non-standard – the distance and power indicators of this type of connection exceed those, which is set for the standard connection.

At the end of 2018, the NKREKP approved a new Methodology for calculating the fee of connecting electrical installations to electrical networks, which set fixed rates for both types of connection for 2019. It allowed customers to calculate the cost of such a service individually. Rates came into operation on January, 22.
However, during 2018, the maximum power limit for a standard connection was 160 kW, and there were no rates for the non-standard connection at all. The operator of the distribution system defined all the indicators necessary to connect the customer’s installation to the electricity grid himself. Thus, there was a possibility to profiteer off the cost of non-standard connection, which often gave rise to lots of difficulties.
The rates of the payment for the connection are based on the criteria of location (region of Ukraine), terrain (rural, urban), categories of reliability of electricity supply, power, voltage at the point of connection and the number of phases of connection.
Moreover, the NKREKP has developed a special online calculator to determine the value of a standard connection, which is posted on the official site of the National Commission. You can easily determine the amount of money that you will have to pay to connect to the power grids by using it. You just have to fill the required value of the indicators in the form to do this.
For example: you need to connect a facility with a power of 20 kW and a voltage of 380 V, III reliability category, using a three-phase scheme to the electric networks in Stryi.
It will cost 64 104 UAH including VAT (2671 UAH. for 1 kW of power without VAT).
The cost of non-standard connection also includes a linear component, that is a fee for each meter of the length of the transmission line of a certain voltage, which is to be built in order to connect the customer’s electrical installation.
Using the rates of fees for non-standard connection and its linear component, placed on the official website of Regional Power Distribution Company in Lviv region, we will try to determine the price of connection an object in the same town Stryi, under a power of 55 kW, voltage 380 V, reliability category II, with the location of the connection point 100 meters from operating networks and the need to build an overhead power line of 380 V.
In this case, the cost of 1 kW of power is 3559 UAH, and 1 meter of the power line costs 785 UAH. Connecting an object with the specified characteristics will cost 329,094 UAH including VAT.
Also there is another innovation. now the service of connection to electrical networks does not include an installation of an electrical energy meter. It will be done by a separate agreement and for a separate fee.
What other details should users of electrical energy know?
Firstly, the customer cannot be denied to connect to electrical networks if they are complied with the requirements of section IV of the Code of Distribution Systems, which, in fact, establishes the procedure for accession. Local Power Distribution Company does not have the right not to accept or not to register the application for connection. All necessary supporting documents should be attached to the application.
Secondly, the connection to the power grid is carried out in the established terms.
Within 10 days from submission the application for standard connection, the customer is provided with the agreement and technical conditions. After signing the contract and making a payment for the service, the power company has 20 calendar days (up to 16 kW) and 30 days (from 16 to 50 kW) in order to apply voltage to the connection point.
In case of exceeding established terms for more than 10 days, the cost of the service is reduced by 10%, for 20 days – by 20%. Excess for 120 days entails a return of all the cost together with penalties, which, however, does not relieve the power company from the obligation to provide the service.
There are another terms established for non-standard connection:

  • 120 calendar days – for connection of power up to 160 kW;
  • 230 days – from 160 to 400 kW;
  • 280 days – from 400 to 1000 kW;
  • 350 days – from 1000 to 5000 kW.

They include the time to design the linear part of connection. For the customer’s request such design can be carried out independently. Than the term for the service of non-standard connection is reduced by the number of days set aside for project development.
Penalties for exceeding non-standard connection terms:

  • from 30 to 60 days – reducing the cost of service by 10%;
  • from 60 to 120 days – by 20%;
  • more than 120 days – a prepayment of 80% of the cost of service is returned to the customer, connection is free of charge.

 Anastasiia Popilevych,
junior associate of corporate law and compliance practice
at Attorneys at Law “Bachynskyy and partners”
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