The legal regime of electricity purchase agreements
The purchase of electricity for consumers is part of the supply activity, and its contractual form is determined by four norms of the Law on Energy: the supply activity, the supply rules, the standard terms, and the supplier's obligations. This page explains these four elements.
The supply activity
The supply of electricity to final consumers is carried out according to the procedure established by law. Supply, save for directly defined cases, is carried out at an unregulated, market price, on the basis of a supply contract concluded between the consumer and the supplier. Household consumers and small enterprises have the right to enjoy supply services. The supplier purchases electricity under a bilateral contract or on the organized energy market.
The supply rules
The rights and duties of the supplier and the final consumer are determined by the supply contract, whose conclusion and content are regulated by the supply rules approved by the commission. The rules determine: the procedure for changing the contract terms; the consumer's right to terminate the contract; the procedure for providing information before a price increase; and the procedure for providing information on prices, standard terms and conditions of access to the service.
Standard terms
The commission approves the standard terms of the supply contract, which define the conditions of continuous and reliable supply of electricity to household consumers and small enterprises. The supplier is obliged to conclude a contract with these categories of consumers under the standard terms. Interruption of supply is possible only in cases of force majeure or security defined by the legislation, or where the consumer, despite warning, does not fulfil obligations, including the payment of the fee.
Supplier obligations
Each supplier is obliged to create an individual service point ensuring the consumer's information about rights, current regulations and dispute-resolution avenues. The point allows the consumer to receive transparent information on prices, tariffs and standard terms; to have a choice of several non-discriminatory payment methods; to receive information on the possibility of changing supplier free of charge; and to receive information on a transparent procedure for handling complaints. Disputes must be resolved fairly and in good time within 10 working days, with compensation where appropriate.
The electricity purchase agreement is a market instrument, but its frame is set by the regulator: standard terms protect household consumers and small enterprises, supply rules ensure transparency, and the restriction of interruption guarantees continuity. Read precisely this frame before concluding a contract.
The details that most often decide the matter in contract practice: whether the supplier purchases electricity under a bilateral contract or on the organized market — this is reflected in its pricing policy; the prepayment system must be fair and adequately reflect expected consumption; and any difference between the conditions of different payment methods must reflect the supplier's real costs. On the consumer's side the main instrument is information: the right to receive free of charge prices, the procedure of their change and consumption data is precisely the footing on which a market participant makes a transparent choice.
The link with public service is also worth noting: a supplier charged with a public-service obligation may buy and sell electricity only if it keeps separate accounting for supply as a public service and for other supply or trading. This rule stands in direct connection with contract practice: it determines how public and commercial flows must be separated at the accounting level so that the tariff remains transparent. Moreover, the commission ensures that the regulation of supply is not discriminatory and corresponds to international obligations.
A final note from the practical plane: before concluding a contract the consumer should verify the supplier's status — whether it is registered, in which consumer category it will treat him, and whether the supply is subject to the standard terms. For household consumers and small enterprises this is especially important, since their protection was precisely the purpose of the standard terms. For a large consumer the key issues are the structure of pricing and the interruption conditions. In both cases the decision must be informed — and it is precisely for this that the law creates such information-provision obligations.
With this approach the electricity purchase agreement remains an instrument rather than a source of risk — and that is the outcome these norms of the law aim at.
And a final word to market participants: competition in the supply sector works only when every party knows the rules — and that knowledge was precisely the aim of this page — on the legal map that the law draws.
Frequently Asked Questions
At what price does supply take place?
Except in the cases directly defined by law, supply is carried out at an unregulated, market price, on the basis of a supply contract between the final consumer and the supplier.
Can supply be interrupted?
Only in defined cases: force majeure or security-related situations, or where the consumer, despite warning, fails to perform obligations, including payment.
How much time does the supplier have to handle a claim?
A fair dispute-handling procedure implies a fair and timely resolution within 10 working days, with reimbursement or compensation where appropriate; the procedure is supervised by the commission.
How does a price change occur?
The supplier must notify the consumer of a change in price and other conditions no less than 1 month before it takes effect, including the right of early withdrawal; a disagreeing consumer may terminate.
When does the consumer receive the final bill upon switching supplier?
The final bill is provided no later than 6 weeks after completion of the supplier-switching procedure.
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The electricity purchase agreement is a market instrument, but its frame is set by the regulator. On Legal.ge you can consult a lawyer on assessing purchase agreements, the standard terms and supply rules, and the claim procedure. Submit a request and get qualified assistance.