License for Electricity Distribution Market Liberalization and Electricity Trade (MLET) Program

The program aims to support the Power Market reforms, the energy sector strategy development, and to promote cross-border trade with Georgia. This includes working towards facilitation of Armenian regulatory practices and harmonization of the Power System standards with the EU directives. The License for Electricity (Capacity) Distribution is focused on revising the electricity (capacity) distribution license issued to the "Electric Networks of Armenia" CJSC according to the Resolution No.79.1 of 2002 of the RoA Public Services Regulatory Commission. The revision aims to separate provisions referring to distribution and those referring to supply of electricity, bringing the distributor's functions in compliance with the RoA Energy Law requirements. Key definitions used in the License include Trading rules, Distribution service tariffs, Distribution network, Licensee, Vulnerable consumer, Transmission Network, Transmitter, System Operator, Commission, Market Rules, Market Operator, Consumer, Technological losses, and Transmission network code. The Licensee, "Electric Networks of Armenia" Closed Joint Stock Company, is responsible for engaging in electricity (capacity) distribution activity within the geographical area of the Republic of Armenia. The Licensee's functions include distribution of electricity (capacity) to participants of wholesale and retail power markets, dispatch of the Distribution network, construction (reconstruction) of the Distribution network, service, operation, management, maintenance, and upgrade of the distribution network, connection of entities' new or reconstructed consumption systems or power plants to the distribution network, ensuring non-discriminatory access of any entity to the Distribution network, metering and billing of electricity, and other functions as provided for by Market Rules. The Licensee is prohibited from engaging in generation of electricity, as well as in licensed supply of electricity (except for universal supply of electricity). The Licensee is also not granted a license for the wholesale trading of electricity. Implementation of the licensed activity shall comply with the RoA Energy Law, other laws, this License, Transmission Network Code, Trading Rules, legal acts approved by the Commission, and other legal requirements. The Licensee is required to ensure non-discriminatory access of any entity to the distribution network, as well as to distribute electricity of the Consumer or other entity through the distribution network at tariffs set by the Commission for rendering distribution services. Contracts signed between the Licensee and other Power Sector Licensees, as well as Consumers (in cases provided for by Market Rules), should comply with model contracts and (or) mandatory provisions defined by the Commission. The Licensee in cooperation with other licensed entities shall develop distribution network rules and submit them to the Commission for approval. The Licensee shall also ensure that the Distribution network is operated in an efficient, economically justified, and systemized manner to ensure uninterrupted least-cost electricity supply to consumers for a long-term period.