The Micro-Capacity Power Plant Regime
The legal frame of solar energy contracts begins with Article 38 of the Georgian Law on Energy and Water Supply. The owner of a micro-capacity power plant, a final consumer using such a plant, or a group of final consumers, may connect the plant to the distribution network and supply the surplus electricity produced by it, defined in accordance with a legal act of the Commission, into the distribution network under the conditions established by the distribution network rules and the supply rules. The right to purchase the surplus electricity delivered into the distribution network belongs to any supplier of electricity in accordance with the supply rules, while in the cases and under the conditions defined by the same rules the surplus is purchased by the universal service supplier in whose service area the plant is located, and/or by another supplier bearing a public service obligation imposed in the manner established by this law. The conditions of the final consumer's use of surplus electricity, including the netting conditions between electricity produced by the micro-capacity plant and electricity consumed, as well as the purchase fee, are established by the Commission.
An important advantage of this regime is the absence of administrative burden: the production of electricity by a micro-capacity plant and the supply of surplus energy are not covered by the regulatory regime established by the energy law, the Law on Licenses and Permits and the Law on Regulation Fees, and the legislation regulating market relations applies to such plants only in the cases directly provided for. A final consumer who supplies surplus energy into the distribution network is exempt from paying the fee for system and market operation services. For the stability of the system, the aggregate capacity of micro-capacity plants connected to the distribution network must not exceed the maximum amount determined by the Commission on the basis of consultation with the system operators.
Standard Terms of the Supply Contract
Under Article 104 the Commission approves the standard terms of the supply contract, which define the conditions of continuous and reliable supply of electricity or natural gas to household consumers and small enterprises. An electricity or natural gas supplier is obliged to conclude a supply contract with a household consumer and/or small enterprise in accordance with those standard terms, and a contract is deemed concluded under standard terms upon connection to them in the manner established by the Commission. Refusal to provide service, as well as a request to discontinue supply to a final consumer, is possible only in two cases: in force majeure or security-related cases defined by the relevant legislation, or where the consumer, despite the supplier's warning, does not fulfill the obligations defined by the supply contract, including payment for the service received. This construction protects the small consumer from arbitrary disconnection while preserving the supplier's leverage over non-payment.