Companies applying for an electricity distribution licence (Polish: DEE) face various challenges in obtaining it. Very often, the reason for the refusal of such a licence is the submission of inappropriate connection conditions.
This is because, in practice, the President of the Energy Regulatory Office (ERO) requires the submission of an agreement/conditions for the connection of the distribution network to the transmission network of a TSO or to the distribution network of the relevant DSO.
This implies two possible scenarios:
- Submission of a correct application to the TSO or the relevant DSO for the issuing of conditions for the connection of the distribution network to the transmission network or the distribution network, as the case may be, or;
- If the conversion of the receiving/generating system to the company’s distribution network takes place after the connection to the facility has already been made, a new application for connection conditions must be submitted and a new agreement concluded. Alternatively, an attempt can be made to resolve the matter by way of an agreement. In such a situation, the course of action will largely depend on the decision of the relevant DSO or TSO.
In certain cases, the President of the ERO will recognise agreements between the parties regulating the issue of changing the type of connected system and the related settlements. However, such an agreement should clearly indicate the boundary between the receiving/generating system and the distribution network.
It should be borne in mind that a change in the type of connection may also entail a change in the fee for that connection.
Therefore, there is a further risk that, in the event of a change of connection from a receiving or generating system to a distribution network, due to the connection of a new type of facility (network), there will be an obligation to pay the network connection fee (with a possible deduction of the amount already paid when the system was first connected).
Consequences of submitting an improperly prepared DEE licence application
The submission of documents in the form of a connection agreement for the connection of a facility other than a distribution network should result in the entrepreneur being requested to remedy formal deficiencies and present the agreement for the connection of the distribution network to the grid within the deadline set by the President of the ERO.
In the case of a completed connection, there is a risk that the DSO or TSO and the prospective licensee will not be able to reach an agreement on a change in the nature of the connection within the deadline set by the President of the ERO. It is therefore advisable to negotiate this issue before submitting the licence application. A mistake at this stage, i.e. submitting the application without the relevant annex, may result in the licence being refused on the grounds that the deadline for remedying formal deficiencies has not been met.
It should also be noted that a change in the type of connection (a network instead of a facility) may result in a change in the fee. Entrepreneurs deciding to develop or implement a new business should take this into account in their plans.
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