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Execution of Technological Connection to Electric Networks. Increase in Power Capacity

26 January 2021

Case Description


The issues of execution of documents for connection of enterprises to the power supply, water supply and waste water networks are always complicated and comprehensive. Many legal actions are required when preparing design documentation, building infrastructure, and obtaining necessary approvals. The power supply in Moscow and the Moscow Region is provided primarily by Mosenergosbyt, while the issues of connection and maintenance of electricity transmission lines are the responsibility of the owners of the networks. The main owner is PJSC Rosseti.

Our client, a large food production factory, faced the need to increase the permitted power capacity to increase the production volume. In the process of collecting documents and conducting due diligence, it turned out that the technological connection certificate was temporary and was issued for 10 years, its term expired. When applying to Rosseti for extension of the certificate, it turned out that this was not possible due to the indebtedness under the technological connection agreement, as well as due to the fact that one of the connected networks belonged to a third party that was in a bankruptcy process. Moreover, earlier, the client applied to the court to enforce the network operator to fulfill the technological connection agreement, but lost the action in all instances. Relations with the network operator were damaged by litigation and there was no constructive dialogue. There was a threat of actual disconnection of the enterprise from the network.

In order to execute the technological connection certificate in the then situation, it was necessary to find legal mechanisms to resolve the conflict with the network operator, purchase or build cable lines, as well as develop and agree on all the necessary design documentation to increase power capacity.

Solving the tasks assigned


The project related to approval of all necessary documents and implementation of procedures for the purchase of cable lines took more than 4 years. Due to negotiations held by BBNP specialists with the power supply and network provider, the city and regional administrations, during the entire work, the Client was actually supplied with electricity, without claims on behalf of third parties and government agencies.
After a thorough due diligence of the legal status of all infrastructure facilities, it was found out that the cable lines connected to the enterprise were owned by the contractor company, which more than 15 years before constructed the industrial buildings, including the Client's cable lines. The cable lines were not transferred to the Client's balance sheet due to "forgetfulness" or intent. It was impossible to contact the owner and the head of the company. In fact, the abandoned company was the owner of the infrastructure and there was no one to negotiate with.

As an effective solution, it was chosen to acquire the infrastructure under the enforcement proceedings in respect of the debts of the said company, which at that time were more than enough. The enforcement proceedings, as well as negotiations with creditors, the bailiff service resulted in the fact that the assets were put up for public auction, and purchased to the benefit of the Client, and subsequently transferred to the network operator to be serviced. Now, it was actually possible to execute a full set of legal documents in respect of technological connection.

Result


• The project for connection of increased power capacity is prepared, the application for technological connection of the increased power capacity is fulfilled;
• An updated agreement was executed with Mosenergosbyt for the supply of increased power capacity.

BBNP specialists were able to complete all the tasks assigned by the Client exclusively through careful and comprehensive planning of actions and procedures for a long term ahead. During the project and tender process, the Client faced a large number of scammers and unscrupulous intermediaries who tried to enrich themselves using the problem that arose, but all their actions were repulsed by BBNP lawyers, including through the court procedures.

Such projects are always individual and do not have a standard solution. During the completion of such large-scale and long-term tasks, the law statutes change, employees are dismissed and new ones are appointed, and there is a conflict of commercial and political interests of different companies and agencies. It is constantly necessary to adjust the action plan, and look for creative solutions to the problems that arise in the course of work.

It is extremely difficult to carry out such work on hour rate basis, as well as to pay for step-by-step work, since the Client's trust can be betrayed by permanent bills, the feasibility of which is often impossible to verify. That is why in such cases, the undoubted advantage of our company is the work on the terms of the success fee, i.e., payment upon completion of all assigned tasks.
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