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LAW No. 588 OF 9th JULY 2004 OF THE REPUBLIC OF KAZAKHSTAN CONCERNING ELECTRIC POWER INDUSTRY
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LAW No. 588 OF 9th JULY 2004 OF THE REPUBLIC OF KAZAKHSTAN

CONCERNING ELECTRIC POWER INDUSTRY

AMENDMENTS AND ADDITIONS INTRODUCED BY:
        1)  Law No. 125 of 31st January 2006 of the Republic of Kazakhstan.  Concerning the Introduction of Amendments and Additions to Certain Legislative Acts of the Republic of Kazakhstan Concerning Issues of Entrepreneurship.  (Articles: 6, 19).  Effective date n/a;
        2)  Law No. 136 of 11th April 2006 of the Republic of Kazakhstan.  Concerning the Introduction of Amendments and Additions to the Law of the Republic of Kazakhstan “Concerning the Electric Energy Sector”.  (Preamble, Articles:  1, 3, 5, 9 replaced, 14, 16, 17, 19, 22, 24).  Effective date n/a; 
        3)  Law No. 166 of 5th July 2006 of the Republic of Kazakhstan.  Concerning the Introduction of Amendments and Additions to Certain Legislative Acts of the Republic of Kazakhstan Concerning Issues of Natural Monopolies.  (Article 5).  Effective date n/a; 
4)  Law No. 209 of 29th December 2006 of the Republic of Kazakhstan.  Concerning the Introduction of Amendments and Additions to Certain Legislative Acts of the Republic of Kazakhstan Concerning Issues of Technical Regulation.  (Articles: 1 replaced, 3, 4, 5, Chapter 2-1 introduced:  Articles;  9-1 introduced, 9-2 introduced, 9-3 introduced; 12).  Effective date n/a;
5)  Law No. 316 of 27th July 2007 of the Republic of Kazakhstan.  Concerning the Introduction of Amendments and Additions to Certain Legislative Acts of the Republic of Kazakhstan Concerning Issues of Sectoral Regulators.  (Articles:  1, 5, 6, 7-1 introduced, 13, 14, 16).  Effective date n/a; 
6)  Law No. 66 of 5th July 2008 of the Republic of Kazakhstan.  Concerning the Introduction of Amendments and Additions to Certain Legislative Acts of the Republic of Kazakhstan Concerning Issues of Concessions.  (Article  9).  Effective date n/a; 
7)  Law No. 116 of 29th December 2008 of Republic of Kazakhstan.  Concerning the Introduction of Amendments and Additions to Certain Legislative Acts of the Republic of Kazakhstan Concerning Issues of Activities of Independent Sectoral Regulators.  (Articles:  1 replaced, 4, 5, 6, 7 replaced, 9, 10, 12, 12-1 introduced, 13, 14, 15, 16, 18, 19, 22, 25).  Effective January 1, 2009;
8)  Law No. 166 of 4th July 2009 of the Republic of Kazakhstan Concerning the Introduction of Amendments and Additions to Certain Legislative Acts of the Republic of Kazakhstan on Issues of Promotion of the Use of Renewable Energy Sources. (Articles: 10, 13). Effective date n/a;
9) Law No. 178 of 10th July 2009 of the Republic of Kazakhstan. Concerning the Introduction of Amendments and Additions to Certain Legislative Acts of the Republic of Kazakhstan on Issues of Information-Communication Networks. (Articles: 7, 13). Effective date n/a; 
10)  Law No.  188 of 17th July 2009 of the Republic of Kazakhstan Concerning the Introduction of Amendments and Additions to Certain Legislative Acts of the Republic of Kazakhstan on Issues of Private Business. (Articles: 5, 6). Effective date n/a; 
11)  Law No. 258 of 19th March 2010 of the Republic of Kazakhstan Concerning the Introduction of Amendments and Additions to Certain Legislative Acts of the Republic of Kazakhstan on Issues of State Statistics and Taxation. (Article 5). Effective date n/a; 
12)  Law No. 378 of 6th January 2011 of the Republic of Kazakhstan Concerning the Introduction of Amendments and Additions to Certain Legislative Acts of the Republic of Kazakhstan on Issues of State Control and Supervision. (Articles:  5, 6, 19). Effective date n/a; 
13)  Law No. 414-IV of 1st March, 2011 of the Republic of Kazakhstan Concerning the Introduction of Amendments and Additions to Certain Legislative Acts of the Republic of Kazakhstan on Issues of State Property. (Article 1). Effective date n/a; 
14)  Law No. 452 of 5th July 2011 of the Republic of Kazakhstan Concerning the Introduction of Amendments and Additions to Certain Legislative Acts of the Republic of Kazakhstan on Issues of Revision of the Competence of Authorised State Bodies and of the Government of the Republic of Kazakhstan to Pass Regulatory Legal Acts establishing Requirements to Audited Entities. (Articles: 4 replaced, 5 replaced, 7, 14, 15, 16, 20). Effective date n/a; 
15)  Law No. 461 of 15th July 2011 of the Republic of Kazakhstan Concerning the Introduction of Amendments and Additions to Certain Legislative Acts of the Republic of Kazakhstan on Issues of Improvement of the Permissive System. (Article 6). Effective date n/a; 
16)  Law No. 479 of 22nd July 2011 of the Republic of Kazakhstan Concerning the Introduction of Amendments and Additions to Certain Legislative Acts of the Republic of Kazakhstan on Issues of Housing Relations. (Articles: 1, 4, 5-1 introduced). Effective date n/a; 
17)  Law No. 542 of 13th January 2012 of the Republic of Kazakhstan Concerning the Introduction of Amendments and Additions to Certain Legislative Acts of the Republic of Kazakhstan on Issues of Energy Saving and Enhancement of Energy Effectiveness. (Article 18). Effective July 1, 2012; 
18)  Law No. 25 of 4th July 2012 of the Republic of Kazakhstan Concerning the Introduction of Amendments and Additions to Certain Legislative Acts of the Republic of Kazakhstan on Issues of Electric Power Industry, Investment Activity of Entities of Natural Monopolies and Regulated Markets. (Articles: 1, 4, 5, 7, 9-1, 10, 12, 12-1, 13, 15, 15-1 introduced, 15-2 introduced, 15-3 introduced, 17, 18, 25). Effective date n/a, except for  Amendments to: subparagraph 31-5) of Article 1, subparagraph 4) of Article 4, subparagraph 12-2) of Article 5, subparagraphs 18), 22) of paragraph 1 of Article 10, paragraphs 2, 3, 4, 5 of Article 15-2, paragraphs 1, 2 of Article 15-3 which are effective January 1, 2015; subparagraphs 3), 4), 20-1) 28), 31-2) 31-3), 31-6), 31-7), 33), 33-1), 37-1), 40), 42) and 51) of Article 1, subparagraphs 5), 6), 6-1), 10-1), 10-2) and 38-4) of Article 4, subparagraphs 12), in 14) the words ‘electric energy’ shall be repealed, 41), 46-6) and 46-8) of Article 5, subparagraphs 2), 3) of Article 7, subparagraphs 17), 20) and 21), of paragraph 1 of Article 10, subparagraphs 1), 2), 10) of paragraph 3, the first part of paragraph 4, paragraph 6 of Article 12, Heading, paragraph 1, 2, 2-1, 4,5 and 6 of Article 12-1, subparagraph 3) of paragraph 3-2, the first part of paragraph 4 of Article 13, Article 15, paragraph 1 of Article 15-2, paragraphs 3, 4, 5, 6 of Article 15-3, Article 17 which are effective January 1, 2016; subparagraphs  12), 13) and 14) of Article 1, subparagraphs 12-1) and 22) of Article 5 ,subparagraphs 5),  7), 8-1) of Article 7, subparagraph 3) of paragraph 3, the second, third parts of paragraph 4 of Article 12 which are effective January 1, 2017; the first, second, third, fourth, fifth and seventh parts of paragraph 3, paragraph 3-1 of Article 12-1, Article 25 which are effective until January 1, 2016; subparagraph 46-1) of Article 5, subparagraphs 4), 5), 6), 7) and 8) of paragraph 3, paragraph 5 of Article 12,  the sixth part of paragraph 3 of Article 12-1 which are effective until January 1, 2017. From the moment of enactment of this Law till 1st January 2016 subparagraph 12-1) of Article 5  is effective in  the  new  edition, and from 1st January 2016 until 1st  January 2017 subparagraph 12-1) of Article 5 is effective in the new edition. From the moment of enactment of this Law till 1st January 2016 subparagraph 5) of Article 7 is effective in the  new  edition, and from 1st January 2016 until 1st  January 2017 subparagraph 5) of Article 7 is effective in  the  new  edition. Amendments to subparagraph 7) of Article 7 are effective in  the new edition  from 1st January 2016 until 1st  January 2017. From the moment of enactment of this Law till 1st January 2016 subparagraph 8-1) of Article 7 is effective in the new edition, and from 1st January 2016 until 1st  January 2017 subparagraph 8-1) of Article 7  is effective in the new edition; 
18a)  Law No. 25 of 4th July 2012 of the Republic of Kazakhstan Concerning the Introduction of Amendments and Additions to Certain Legislative Acts of the Republic of Kazakhstan on Issues of Electric Power Industry, Investment Activity of Entities of Natural Monopolies and Regulated Markets through the Law No. 81 of 6th March 2013 of the Republic of Kazakhstan Concerning the Introduction of Amendments and Additions to Certain Legislative Acts of the Republic of Kazakhstan on Issues of Competition. (Article 7); Effective date n/a;
19)  Law No. 31-V of 10th July 2012 of the Republic of Kazakhstan Concerning the Introduction of Amendments and Additions to Certain Legislative Acts of the Republic of Kazakhstan on Matters of Technical Regulation and Metrology. (Articles: 3, 15). Effective date n/a; 
20)  Law No. 36 of 10th July 2012 of the Republic of Kazakhstan Concerning the Introduction of Amendments and Additions to Certain Legislative Acts of the Republic of Kazakhstan on Issues of the Reduction of Permissive Documents and Optimisation of Controlling and Supervisory Functions of the State Bodies. (Article 5). Effective date n/a; 
21) Law No. 81 of 6th March 2013 of the Republic of Kazakhstan Concerning the Introduction of Amendments and Additions to Certain Legislative Acts of the Republic of Kazakhstan on Issues of Competition (Article 7). Effective date n/a; 
        22)  Law No. 124-V of 3rd July 2013 of the Republic of Kazakhstan Concerning the Introduction of Amendments and Additions to Certain Legal Acts of the Republic of Kazakhstan on Issues of Bringing them into Line with the System of State Planning of the Republic of Kazakhstan. (Articles: 4, 5 and 6). Effective date n/a; 
       23)  Law No. 128 of 4th July 2013 of the Republic of Kazakhstan Concerning the Introduction of Amendments and Additions to Certain Legislative Acts of the Republic of Kazakhstan on Issues of Promotion of the Use of Renewable Energy Sources. (Articles: 1, 9, 10, 12 and 13). Effective date n/a; 
       24) Law No. 203 of 16th May 2014 of the Republic of Kazakhstan Concerning the Introduction of Amendments and Additions to Certain Legislative Acts of the Republic of Kazakhstan on Issues of the Permissive System. (Articles: 4, 5, 7-1 replaced,  9, 22). Effective date n/a; and
       25) Law No. 225 of 2nd July 2014 of the Republic of Kazakhstan Concerning the Introduction of Amendments and Additions to Certain Legislative Acts of the Republic of Kazakhstan on Issues of State Government. (Article 3-1 introduced). Effective date n/a
This Law shall regulate public relations arising in the process of generation, transmission and  consumption of electric and thermal power.

CHAPTER 1.  GENERAL PROVISIONS

Article 1.  The Fundamental Definitions Used in this Law

Introduced by 7)  Law No. 116 of 29th December 2008 of Republic of Kazakhstan.  Concerning the Introduction of Amendments and Additions to Certain Legislative Acts of the Republic of Kazakhstan Concerning Issues of Activities of Independent Sectoral Regulators
Amended by 13)  Law No. 414-IV of 1st March, 2011 of the Republic of Kazakhstan Concerning the Introduction of Amendments and Additions to Certain Legislative Acts of the Republic of Kazakhstan on Issues of State Property;
16)  Law No. 479 of 22nd July 2011 of the Republic of Kazakhstan Concerning the Introduction of Amendments and Additions to Certain Legislative Acts of the Republic of Kazakhstan on Issues of Housing Relations; 
18)  Law No. 25 of 4th July 2012 of the Republic of Kazakhstan Concerning the Introduction of Amendments and Additions to Certain Legislative Acts of the Republic of Kazakhstan on Issues of Electric Power Industry, Investment Activity of Entities of Natural Monopolies and Regulated Markets; and
23)  Law No. 128 of 4th July 2013 of the Republic of Kazakhstan Concerning the Introduction of Amendments and Additions to Certain Legislative Acts of the Republic of Kazakhstan on Issues of Promotion of the Use of Renewable Energy Sources.
The following fundamental definitions have been used in this Law:

1)  emergency reservation shall mean the minimally required electric power which delivery to an object of uninterrupted electric power supply retains the functioning of the installations significant to it, and prevents malfunction of objects of sustenance, and also catastrophic ecological, social or economic consequences or death of people. 

2)  emergency malfunction shall mean inadmissible deviations of technological parameters of operation of electrical installations or its elements which caused their removal from service or destruction during operation;

2-1) readiness certificate * a yearly issued document confirming the readiness of energy producing and energy transmitting organisations to operate in the autumn-winter conditions; 

2-2) generating facility * equipment producing electric energy; 

5)  system incident shall mean emergency malfunction of the regimes of operation of electric power industry objects which leads to the loss of stability of the unified electric power system of the Republic of Kazakhstan, and to its division to parts;

6)  system services shall mean the services rendered by the system operator to entities of the wholesale market of electric power for the transmission of electric energy, technical dispatching control, regulation and reservation of power, organization of balancing of the generation-consumption of electric energy;

7) system operator * a national company which carries out centralised operative-dispatching control, providing for parallel operation with energy systems of other countries, maintenance of balance in the energy system, rendering of system services and acquisition of ancillary services from entities of the wholesale market of electric energy, and also transmission of electric energy via the national power grid, its technical maintenance and keeping in the operational readiness; 

8)  protection zone of heating networks shall mean land plots allocated for the purpose of ensuring the safety of heating networks, creation of the normal operating conditions, prevention of their damage, and also accidents among the population that happened to be present in the protection zone of those networks; 

9)  transmission of thermal energy shall mean a service for transportation of thermal energy via heating networks, rendered by energy transmitting organizations in accordance with the executed contracts;

10)  retail market of thermal energy shall mean a system of relations of the participants of generation, transmission, and consumption of thermal energy, functioning on the basis of contracts; 

11)  investment program shall mean a program aimed at the creation of new assets, expansion, renovation, reconstruction and technical re-equipping of the existing assets;

	15)  device of commercial recording shall mean a technical installation designed for commercial recording of electric power, electric or thermal energy, allowed for the application in accordance with the procedure as established by the legislation of the Republic of Kazakhstan;  

	15-1) authorised body in the field of communal economy * a central executive authority performing administration and intersector coordination in the field of electric power supply (electric power grid facilities with 0,4 kV) and heat supply, except for heat-electric generating stations and boiler houses with the established capacity of 100 Gcal/hour and more, within the limits of populated areas;  

16)  unified electric power grid of the Republic of Kazakhstan shall mean an aggregate of electric stations, power transmission lines, and substations which provide for reliable and qualitative energy supply of consumers of the Republic of Kazakhstan; 

17)  reserve of electric power of the unified electric power grid of the Republic of Kazakhstan shall mean electric power of aggregates of energy producing organizations which have the required structure, amount, and also the degree of preparedness to dispatching, complying with the requirements as provided for by the contract; 

	18)   ancillary services shall mean services acquired by the system operator from entities of the wholesale market of electric energy for ensuring the readiness of the required volumes and structure of operative reserves of electric power, regulation of active and reactive powers, on starting the energy system from the deenergized state;  

18-1) state technical inspector * an official person of the authorised body which carries out state control over the compliance with requirements of the legislation of the Republic of Kazakhstan concerning electric power industry; 

19)  operation day shall mean a current day during which the system operator conducts the operations on the centralized operative and dispatching control of the implementation of the contracts for the purchase-and-sale of electric energy executed by entities of the wholesale market of electric energy;

20)  centralized operative-dispatching control shall mean a process of continuous control of technically coordinated operation of energy generating, energy transmitting, energy supplying organizations and consumers of electric energy, which is carried out by the system operator, and which provides for a specified level of reliability of the unified electric power grid of the Republic of Kazakhstan, and compliance with the standard quality of electric energy; 

20-1) operator of the market of centralised trading * an organisation which carries out centralised trading in electric energy, including spot trades in electric energy, and services for maintenance of electric capacity readiness; 

	21)  inter-regional and/or interstate power transmission lines shall mean power transmission lines with voltage of 220 kV and more, which provide for the transmission of electric power between regions and/or states;  

22)  regional electric network company shall mean an energy transmitting organization which operates electric networks of the regional level;

22-1) fuel operational reserve standard * the minimum fuel operational reserve of energy producing organisations in daily quantities; 

23)  balancing electric energy shall mean electric energy used for elimination of arising disbalances in the implementation of the hourly daily schedule of production-consumption of electric energy approved by the system operator;

24)  technical dispatching shall mean a service rendered by the system operator for the performance of the centralized operative-dispatching control of the regimes of production and consumption of electric energy in the unified electric power grid of the Republic of Kazakhstan; 

25)  consumer shall mean a natural or legal person which consumes electric and/or thermal energy on the basis of a contract;

26)  authorized body shall mean a state body which carries out guidance in the area of electric power industry;

27)  national power grid shall mean a totality of substations, distribution installations, inter-regional and/or interstate power transmission lines and power transmission lines which carry out the supply of electric energy of electric stations with voltage of 220 kV and more, shall not be subject to privatisation and shall be transferred to a national company in accordance with the procedure and on conditions to be defined by the Government of the Republic of Kazakhstan; 

29)  commercial recording of electric and thermal energy shall mean recording of electric and thermal energy required for mutual settlements between the parties to contracts of purchase-and-sale and transmission of electric and thermal energy;

29-1) electric power networks – a set of substations, distributing facilities and electric power transmission lines connecting them that are intended for the transmission and distribution of electric power;

30)  protection zone of electrical networks shall mean land plots, water and air space allocated for the purpose of ensuring the safety of electrical networks, creation of normal operating conditions, prevention of their damage, and also accidents among the population that happened to be present in the protection zone of those systems; 

31)  regulation of electric power shall mean a service for compensation of deviations of the actual electrical load of an entity of the wholesale market of electric energy from the stated electric load subject to the observance of zero balance of the exchange electric energy with planning or without planning in the daily schedule;

31-1) service for maintenance of electric capacity readiness * a service which is rendered by energy producing organisations to the system operator with respect to maintenance of electric capacity readiness of generating facilities, that is attested through the established procedure, to bear loads;

31-2) limiting tariff of the service for maintenance of electric capacity readiness * the maximum amount of the tariff (price) of the service for maintenance of electric capacity readiness for energy producing organisations participating in the electric capacity market, which is approved by groups of energy producing organisations, which ensures return of investments made in renewal, support,  reconstruction and technical re-equipment of existing industrial assets within the standard recoupment period that is equal to seven years (except for electric capacity of generating facilities which are newly put into operation on the base of a tender); 

31-3) group of energy producing organisations which render services for maintenance of electric capacity readiness * a set of energy producing organisations formed according to the criteria as follows: type of energy producing organisations, unit capacity of generating equipment; 

31-4) service on providing for electric capacity readiness to bear loads * a service which is rendered by the system operator on providing for electric capacity readiness of generating facilities, which is attested in accordance with the established procedure, within the unified electric power grid of the Republic of Kazakhstan, to bear loads; 

31-5) electric capacity market * a system of mutual relations between entities of the wholesale market of electric energy, which relations are connected with the maintenance by energy producing organisations of generating equipment in a state of readiness to produce electric energy, with the renewal, support, reconstruction and technical re-equipment of existing industrial assets, and also their creation; 

31-6) centralised trading in electric capacity * a process aimed at the conclusion of contracts for rendering services for maintenance of electric capacity readiness (except for electric capacity of generating facilities which are newly put into operation on the base of a tender) between energy producing organisations and the system operator in the electronic system of trading;

31-7) spot-trades in electric capacity * organised trading in services for maintenance of electric capacity readiness (except for electric capacity of generating facilities which are newly put into operation on the base of a tender) in the electronic system of trading on short-term bases according to the day ahead regime; 

32)  electric power industry shall mean the sphere of production, transmission, supply and consumption of electric and thermal energy;

33)  entities of the wholesale market of electric energy shall mean energy producing, energy transmitting, energy supplying organizations, consumers of electric energy, the system operator, the  operator of the market of centralised trading settlement-financial centre for promotion of the use of renewable energy sources; 

33-1) limiting tariff of electric energy * the approved maximum amount of the sale tariff (price) of electric energy for a group of energy producing organisations, which does not take into account the investment component as a source of financing of investments of energy producing organisations for the creation of new assets, renewal, support, reconstruction and technical re-equipment of existing assets; 

34)  guaranteeing supplier of electric energy shall mean an energy supplying organization which carries out the energy supply of consumers in the case of termination of electric power supply of consumers by all other energy supplying organizations not through the fault of the consumer; 

35) transmission of electric energy * a service which is rendered by energy transmitting organisations in accordance with concluded contracts for transmission of electric energy;