OREANDA-NEWS. February 25, 2010. The Federal Antimonopoly Service (FAS Russia) found that "TGK-11" OJSC violated Part 1 Article 10 of the Federal Law "On Protection of Competition". The company was engaged in price manipulation on the wholesale electric energy market, reported the press-centre of FAS Russia.

"TGK-11" OJSC generated electric energy within the geographic boundaries of the second price zone of the wholesale market of electric energy (power) as well as within the boundaries of following free power transfer zones: "the remaining Interconnected Power System of Siberia" and the "Omsk Energy System". "TGK-11" OJSC has dominant position within the boundaries of the "Omsk Energy System" free power transfer zone.

The case was initiated upon the findings of the monitoring of price bids of "TGK-11" OJSC, presented by the "Market Council" Non-Commercial Partnership in accordance with the Procedures for establishing instances of manipulating prices for electric energy (power) on the wholesale market of electric energy (power), approved by No.378 Order of FAS Russia of 14th November 2007.

FAS Russia established that price bids of "TGK-11" OJSC for the day-ahead market, as well as balancing market from 5th June to 11th October 2008 were economically unjustified. Price bids of "TGK-11" OJSC ranging from 1000 to 3900 Rubles per /MWh considerably increased the marginal rates approved by the Federal Tariff Service of the Russian Federation for the plants similar to the Omsk Thermal Power Plant-3, as well as the prices at the day-ahead market for the similar hours of the preceding day and week (month).

An expert assessment, carried out as part of the case investigation, showed that fuel consumption at the Omsk Thermal Power Plant-3 were overrated on average by 26-40%.

From 31st July to 8th September 2008 "TGK-11" OJSC exercised a pricing strategy towards the Omsk Thermal Power Plant-3, Omsk Thermal Power Plant-4 and Omsk Thermal Power Plant-5 that increased selling prices for electric energy by up to 50% in certain hours of the period in question. "TGK-11" OJSC manipulated prices by filing unreasonably overrated price bids as well as "withdrawing" electric power. For instance, in some cases the company overcharged the prices knowing that the energy would be sold anyway; in other instances "TGK-11" OJSC deliberately tried not to sell electric energy on the day-ahead market for a certain plant, hoping to make profit by selling energy generated by other plants or selling it on the balancing market.

Summing up the case, Anatoly Golomolzin, Deputy Head of FAS Russia, said that the decision was made upon a thorough analysis of the market situation, in particular, the economic and technological expert assessment. FAS Russia hopes that this precedent will serve as yet another signal to the participants of the competitive market of electric energy about the need to observe the requirements of the antimonopoly law and prohibition of economically and technologically unjustified actions.

Reference:
Under Clause 2 Article 25 of the Federal Law "On Electric Power Industry", wholesale and retail markets have a system of regular control aimed at early prevention, exposure, constraining and (or) suppressing actions (omissions) that have resulted or can result in preventing, restricting, eliminating competition and (or) infringing the interests of electric power engineering entities and consumers of electric energy, including price manipulation on wholesale and retail markets, particularly, using the company's dominance and (or) unique position.