The National Energy Regulatory Council (NERC) has imposed a €21,500 fine on Lithuania's electricity transmission system operator Litgrid for a violation committed while trading on the wholesale electricity market. NERC announced the decision at its meeting today. It was determined that in 2022 the operator submitted an erroneous order to sell an exceptionally large amount of electricity, which could have misled other market participants and affected prices.
“While assessing the situation and imposing a sanction on the company, NERC took into account the fact that the violation lasted for a short period, Litgrid informed the market about the incident, cooperated during the investigation, and implemented measures to prevent a similar situation from recurring," said NERC Chairman Renatas Pocius, commenting on the Council's decision.
This violation occurred in September 2022, when the operator submitted an erroneous order to sell a large amount of electricity that it was not actually able to supply. The Council found that during the incident, for one hour in the Nord Pool Intraday market, the volume of electricity sold by the operator differed significantly from typical levels.
This Litgrid order and transaction caused an electricity shortage in the Lithuanian power system, affected the balancing energy market in the Baltic States, and led to increased activation of balancing energy and a higher balancing energy price, which in turn influenced the price imbalance.
The Council concluded that due to these circumstances, the operator could/may have sent or did send a misleading signal to the market regarding electricity demand and supply. Its actions also affected the supply, demand, and price levels of another wholesale energy product – balancing energy (as well as the imbalance price, which depends on it), resulting in an artificially altered price level for that product.
The Council determined that through these actions, the operator violated Article 5 of the Regulation on Wholesale Energy Market Integrity and Transparency (REMIT), which aims to ensure transparent and fair trading in the energy market and to protect consumer rights, market stability, and competitiveness.
Taking all these circumstances into consideration, NERC imposed a €21,500 fine on Litgrid, which must be paid within 30 days from the date the NERC resolution officially enters into force.
