The Core Blocks of Utility Compliance
For a player in the utility sector, compliance depends on five groups of norms: public-service obligations, supplier obligations, information storage, penalty sanctions, and the authorization schedule of public-service suppliers. This page explains all five and shows how they connect to daily operating practice.
The Public-Service Obligation
For the purposes of the general economic interest — supply security, continuity, appropriate quality and price, as well as environmental protection, energy efficiency, generation from renewable sources and climate protection — an energy undertaking may be charged with a public-service obligation, imposed by the government after consultation with the competent state organs, the Commission and the Energy Community Secretariat. For compliance the following matter: the obligation is temporary and regularly reviewed; it must be transparent, non-discriminatory and easily verifiable; compensation or an exclusive right must not exceed the corresponding costs, account taken of revenue and reasonable profit; and the tariff is set by the Commission. Undertakings performing public service ensure supply security, quality supply, environmental protection and energy efficiency, the protection of health, life and property, and consumer rights.
Supplier Obligations and Information Storage
Each supplier is obliged to create an individual service point. The point gives the consumer transparent information on prices, regulated tariffs and standard terms; a choice of several non-discriminatory payment methods — the prepayment system must be fair and adequately reflect expected consumption; information on the possibility of changing supplier free of charge; a transparent, simple and economical complaint procedure; and, for consumption control, systematic and accurate notification of actual consumption and the corresponding cost, free of charge. Disputes must be resolved fairly and in good time within 10 working days, with redress and/or compensation where appropriate. The final bill after a supplier change is received no later than 6 weeks later, and a change in the supply price or other conditions must be notified no less than 1 month before it takes effect — where the consumer disagrees, the contract may be terminated early.
Suppliers serving household consumers and small enterprises additionally ensure service centers that deliver information by telephone, e-mail and in person, and a commission for reviewing complaints; the center must work at least once a week up to 20 hours, and booking must be possible by telephone or e-mail. In documentary terms, the supplier stores, for no less than 5 years, information connected with supply contracts concluded with traders, system operators and, where relevant, the operators of natural gas storage and LNG systems, and with operations carried out by derivatives, and makes it available to the Commission and the competition and consumer protection agency. The five-year memory of documentation is the foundation of audit readiness.
Penalty Sanctions
The Commission may impose liability on a natural or legal person for breach of the requirements of the law or of its legal acts. For non-fulfilment of obligations connected with unbundling and the independence of the transmission system operator, the Commission may warn in writing or fine up to 10% of the previous year's annual turnover; for market manipulation, attempted manipulation or trading on inside information — up to 6% of turnover. For each other breach — among them activity without accounts separation, failure to submit reports, withholding requested data and breach of license conditions — the regulated undertaking receives a written warning or a fine of 5 000 to 75 000 GEL. For a repeated breach the Commission may also prohibit energy and professional activity for up to 1 year, and for an irremediable breach or repetition within 1 year — a doubled fine. Every fine, with its justification, is recorded in the decision.
The Authorization Schedule and the Market Model
The market-model concept norm provides: the government must approve the electricity market model concept within 3 months of the law's entry into force, the natural gas market concept within 10 months, and within 12 months adopt the relevant subordinate acts or amend existing ones. No later than 1 July 2021 authorization had to cover the universal service supplier and supplier of last resort in electricity — and, where necessary, other public-service undertakings — and no later than 1 July 2022 the public-service supplier and supplier of last resort in natural gas. The Commission, in turn, approves the market rules and the supply rules — including universal and last-resort supply — within 4 months of the approval of the relevant concept.
Frequently Asked Questions
Undertakings working in the utility sector most often ask about storage periods, the scale of fines and consumer-service standards.
For how long is information stored?
Contract- and derivatives-related information is stored for no less than 5 years and is made available to the Commission and the competition and consumer protection agency.
What fines are provided?
For unbundling breaches — up to 10% of the previous year's turnover; for market manipulation — up to 6%; for other breaches — a warning or a fine of 5 000 to 75 000 GEL, and for repetition — a doubled fine and a ban of up to 1 year.
Within what period are consumer disputes resolved?
Disputes must be resolved fairly and in good time within 10 working days, with redress and/or compensation where appropriate; the complaint procedure is supervised by the Commission.
How is the consumer notified of changes?
The supplier notifies the consumer of a change in the supply price or other conditions no less than 1 month in advance; where the consumer disagrees, the contract may be terminated early.
How We Help on Legal.ge
The Legal.ge team works with energy companies and suppliers: we analyse public-service obligations, prepare internal procedures for consumer service and information storage, and assess sanction risks.
If you have a question about utility regulatory compliance or a dispute with the regulator, write to us on Legal.ge — we will assess your position on the basis of the legislation.