Tyumenenergo unreasonably refused to conclude contract for technical connection with individuals

In December 2009 Tyumen OFAS Russia found that “Tyumenenergo” OJSCviolated the antimonopoly law by evading a contract for technological connection of the owners of residential houses in Kazarovo and Beryeznyaki villages.
Tyumen OFAS Russia received complaints from four local residents about antimonopoly violations by “Tyumenenergo” OJSC. The owners of residential houses complained that they had built houses in Beryeznyaki (“South Quarter”) and Kazarovo (“Quarter “A”) but were unable to connect electric energy. They filed applications for connecting electric power to their houses to Tyumen Distribution Networks - a branch of “Tyumenenergo” OJSC. However, they were referred to the “Utilities Construction Directorate”, which commissioned construction of engineering networks for development in Kazarovo and Beryeznyaki. On 11th February 2009, “Tyumenenergo” OJSC and the “Directorate” signed a contract for technological connection of energy-receiving devices of the Directorate, necessary to supply power to individual houses. As “Tyumenenergo” OJSC sent an offer for the contract to the Directorate, the latter referred the applicants to “Tyumenenergo” OJSC. At a court hearing “Tyumenenergo” OJSC explained its actions by lack of actual legal and technical possibility to provide technological connection.
According to the conclusion of Tyumen OFAS Russia, “Tyumenenergo” OJSC had no right to refuse to conclude technical connection contracts with the individuals in question. Maximum capacity of their energy-receiving devices does not exceed 15 kW. Under the Rules for Technical Connection, a network organization must undertake measures for technological connection of any person, who filed an application and whose energy-receiving devices have a capacity no more than 15 kW, regardless of technical possibilities of the organization.
“Tyumenenergo” OJSC is a natural monopoly and has dominant position on the market for electric power transmission, so it is regulated by Article 10 of the Federal Law “On Protection of Competition”, which prohibits companies that have dominant market position to evade contracts with individual buyers.
The Court of Second Instance fully supported the position taken by Tyumen OFAS Russia and dismissed the appeal of “Tyumenenergo” OJSC.