Damage to Seals on the Meter Itself Is Not a Basis for Charging Unaccounted Electricity — Appellate CourtDamage to Seals on the Meter Itself Is Not a Basis for Charging Unaccounted Electricity — Appellate Court

The Rivne Appellate Court considered case No. 555/1452/25, an appeal by PJSC "Rivneoblenergo" for the recovery of unaccounted electricity costs from a consumer. The court upheld the first-instance court’s decision, which had refused to satisfy the claim.

Essence of the Case

The plaintiff, PJSC "Rivneoblenergo", failed to provide proof that the consumer interfered with the live parts of the metering scheme (node). This is a requirement under the second paragraph of clause 8.4.5 of chapter 8.4 of section VIII of the Retail Electricity Market Rules (hereinafter referred to as REMR), as supplemented by Resolution No. 203 dated 31.01.2023 of the National Commission for State Regulation of Energy and Utilities (NKREKP).

PJSC "Rivneoblenergo" appealed to the Rivne Appellate Court against the first-instance court’s decision, which had rejected its claim against a Rivne district resident for the recovery of unaccounted electricity costs.

The local court dismissed the plaintiff’s claims, noting that the meter was housed in a sealed transparent plastic case, and there was no evidence of seal damage on the case itself.

The appellant, disagreeing with the court’s stance, requested that the appealed court decision be overturned and a new one adopted to satisfy the claim. The appellant argued that evidence of seal damage on the metering device alone should be sufficient to recover funds from the defendant.

The panel of judges concluded that the plaintiff’s representative’s appeal should be denied, after considering the circumstances of the case.

Case materials indicate that representatives of PJSC "Rivneoblenergo" discovered REMR violations at the defendant’s residence: damage to seals with stamp imprints on the terminal cover and the optical port of the meter.

An Act on the violation of the Rules was prepared, which the defendant refused to sign.

The commission responsible for reviewing acts on consumer REMR violations reviewed the Act and prepared a Protocol. This Protocol charged the consumer for damages to the electricity meter and the cost of unaccounted energy, amounting to over 56,000 hryvnias.

Reasons and Decision of the Appellate Court

The appellate court, in agreement with the lower court’s decision, upheld it, taking into account the legislative provisions governing the supply of electricity by energy suppliers to consumers in compliance with retail market rules.

According to part three of Article 58 of the Law of Ukraine "On the Electricity Market" (hereinafter referred to as the Law), consumers are obliged, in particular, to pay for electricity and services provided under concluded contracts; to comply with technical operation rules, safety rules during the operation of their electrical installations, regulatory legal acts governing the functioning of the electricity market, and the terms of concluded contracts.

Part one of Article 77 of the Law stipulates that market participants and commercial metering service providers who violate regulatory legal acts governing the functioning of the electricity market bear responsibility according to the law.

Clauses 5.5.1 and 5.5.2 of chapter 5.5 of section V of the Commercial Electricity Metering Code state that owners (users) of electrical installations, objects, or individual elements of an object or territory (premises) where commercial metering devices (CMD), seals, and tamper indicators (including electric/magnetic field) on CMD, as well as other metering node equipment, are installed, are responsible for their preservation and integrity. This includes compliance with project-specified environmental parameters and protection from damage and external interference, as per the sealing act (a document confirming the sealing and transfer of CMD, installed seals, and indicators for safekeeping).

Responsibility for the preservation and integrity of CMD, seals, and indicators installed in an apartment (house) or on an individual household consumer’s property within the household territory lies with that consumer.

According to clause 8.2.4 of chapter 8.2 of section VIII of the REMR, if system operator representatives detect damage or breakage of seals and/or indicators installed at locations specified in the sealing act, or damage to stamp imprints on these seals, damage to measuring instruments, obvious signs of interference with measuring instruments to alter their readings, or unauthorised connections to electrical networks, the calculation of the volume of electricity subject to payment is carried out according to the procedure defined in chapter 8.4 of this section.

Subparagraph 2 of clause 8.4.2 of chapter 8.4 of section VIII of the REMR states that the determination of the volume and cost of unaccounted electricity is carried out by the system operator based on an Act on violation prepared according to these Rules. This applies in cases where damage or absence of seals with system operator or other interested parties' stamp imprints installed on measuring instruments (metering nodes) is detected (excluding seals installed on meter cover fastenings), and/or devices (metering cabinets, protective panels, etc.) on which such seals are installed and which restrict access to live parts of the metering scheme (node). This is provided there is a sealing act prepared according to the Commercial Metering Code or another document confirming the transfer of measuring instruments and installed seals for safekeeping.

Furthermore, clause 8.4.5 of chapter 8.4 of section VIII of the REMR was supplemented with a new second paragraph according to Resolution of the National Commission for State Regulation of Energy and Utilities No. 203 dated 31.01.2023.

According to paragraph 2 of clause 8.4.5 of chapter 8.4 of section VIII of the REMR, if a consumer commits violations specified in subparagraph 2 of clause 8.4.2 of this chapter, the provisions of this chapter apply only if there is access to the live parts of the metering scheme (node). This must be indicated in the violation act. Regarding seal damage/absence, no more than six years must have passed from the moment of seal installation to the moment its damage/absence is detected.

The violation act does not contain information about access to the live parts of the metering scheme (node). However, according to the second paragraph of clause 8.4.5 of chapter 8.4 of the REMR, this circumstance must be reflected in the act as a condition for applying the provisions of this chapter. In the absence of such information in the act, there are no grounds for applying the procedure for determining the volume and cost of unaccounted electricity as provided by chapter 8.4 of the REMR.

The appellant’s argument that seal damage alone is sufficient grounds for applying chapter 8.4 of the REMR does not consider the changes introduced by NKREKP Resolution No. 203 dated 31.01.2023.

Under these circumstances, the panel of judges also noted that the metering device was in a sealed transparent plastic case, and the case materials contain no evidence of seal damage on this case, which casts doubt on the presence of access to the live parts of the metering scheme (node).

The arguments presented in the appeal do not refute the conclusion regarding the absence of grounds, as provided by the REMR, for determining the volume and cost of unaccounted electricity, and therefore do not justify satisfying the claim.

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