|LAW NO.03/L-116 ON CENTRAL HEATING|
|e hėnė , 12 janar 2009|
LAW No. 03/L-116
ON CENTRAL HEATING
Assembly of Republic of Kosovo,
Pursuant to article 65 (1) of the Constitution of the Republic of Kosovo,
Recognizing the need to establish standards and conditions for the integrated system of heat generation, distribution, and supply in urban centers in order to achieve a competitive and sustainable market over the scope,
LAW ON CENTRAL HEATING
This Law establishes the conditions and standards for performing the activities the generation, distribution and supply of heat, the conditions for the operation with other facilities of central heating (hereinafter "heating") and access to networks and organization of the heat market, as well as the rights and obligations of legal subjects that perform activities under this law.
1. The purposes of this law are to:
1.1. set conditions for developing a sustainable and competitive market for district heating under principles of free market economy, fulfilling the customer's demands and environmental protection;
1.2. set conditions for a safe, reliable and efficient supply of heat for maintaining the indoor temperature at a suitable level during the heating season, eventually providing hot tap water permanently around the year for domestic customers as well as satisfying the demand of the institutional, commercial or industrial customers; and
1.3. set conditions that allow the final customers to enjoy the right to be connected and
supplied with heat according to standards and at an economic price.
1. The following terms used in this law shall have the following meanings:
"Certificate of origin" means a document issued by the Energy Regulatory Office evidencing the usage of otherwise unutilized heat, renewable energy resources or waste for the generation of heat, or the co-generation of heat and electricity;
"Codes" means the generic name of several technical documents issued by the heat enterprises and approved by the Energy Regulatory Office;
"Customer's protection code" means a set of general rules that determines the rights and obligations of the supplier and the customer in the district heating sector;
"Distribution code" means a set of rules and procedures for heat distribution;
"Metering code" means a set of rules and procedures regulating the reading of metering devices, the measuring of spent energy, and billing and fee collection in the district heating sector;
"Metering device" means an instrument registered in the register of certified metering equipment in Kosovo and used in the process of heat generation and heat supply;
"Normative tariff" means a provisional tariff system, which includes the consumption that is calculated per square meter;
"Metered Tariff" means the permanent tariff system based on consumed quantities of heat that is measured at the delivery point supplying the customer;
"Customer" means the legal or natural person receiving supply of heat the customer can thus be either the final user of heat or a natural or legal person supplying heat to individual final customers;
"Delivery point" means the thermal substation from which the heat, and possibly the hot tap water for domestic use, is carried to the end user, and where heat is measured with proper metering devices;
"Direct heat pipe" means a district heating pipeline connecting directly the producer premises with a customer;
"Distribution" means the transportation and the distribution process of heat from the producer's plant to the customers; and
"Distributor" correspondingly means a legal or natural person responsible under a license for distribution;
"Final customer" means a customer purchasing heat for their own use;
"Eligible customer" means a customer who is free to purchase heat from the supplier of their choice;
"Energy Regulatory Office" means the independent regulatory authority established by the Law No. 2004/9 On Energy Regulator;
"Heat carrier" means heating water, steam, saturated steam, other liquid or gas used to transport heat through the distribution or supply network;
"Heat distribution network" means a piping system, transporting heat from producer to customers;
"Heat enterprises" means a legal entity performing one or more of the activities of generation, distribution and supply of heat, on the grounds of a granted license as well as heat producers connected to a Heat System, exempted from License, within the meaning of the Law on Energy Regulator;
"Heat generation" means the production of heat by an enterprise licensed to produce this heat;
"Producer" and "generator" mean consequently a natural or legal person generating heat;
"Heat system" means the integrated and connected system of generation, distribution and supply;
"Central heating" means the heating of spaces and supply of domestic tap warm water from central heating sources;
"Heat" means district-heating or district-cooling energy, transported through a heat carrier from the producer to the customers in a fixed network, for maintaining the customers' indoor temperature at a required level, and supplying steam, hot industrial water and/or domestic tap warm water;
"Heating season" means the period between the commencement and termination of the supply of heat, depending on the outdoor temperature and established by the resolutions of the central or relevant local authorities;
"Vertically integrated heat enterprise" means heat enterprise which performs generation, distribution and supply of heat;
"License" means an official document granted by the Energy Regulatory Office authorizing the right to perform an energy activity under the provisions of the Law on Energy Regulator;
"Supply" means sale or resale of heat to customers;
"Hot domestic water" means the tap water heated at least up to the temperature prescribed by the hygiene norms;
"Unutilized heat" means excess of heat produced by factories, power plants, etc., currently wasted, and which may be used for district heating;
"Heat from wastes" means the heat gained through the recycling of wastes for combustion, which may be used for heating;
"Supplier" means a legal or natural person with regular license to contract with customers regarding the sale or resale of heat;
2. The other terms in this Law shall have the same meaning stipulated in the Law on Energy, Law on Electricity or the Law on Energy Regulator.
1. Heat systems are installed in dense populated urban zones, where the heat is being generated, distributed and supplied to the customers.
2. Heat systems comprise the heat generating unit(s), and the distribution network, to and inclusively the delivery point.
3. Producers, including electrical power plants operated as power/heat co-generating units, may supply heat to the same heat distribution network.
CONDUCT OF ACTIVITIES IN HEATING SECTOR
1. The activities in the heat sector, determined by this Law, shall be carried out in accordance to the Law on Energy Regulator and relevant rules issued by the Energy Regulatory Office
2. Activities, subject to a License under this Law, shall be the generation of heat by heating plants with capacity exceeding 1 MW, the distribution of heat and the supply of heat.
3. Licenses shall be granted, modified, suspended, transferred, terminated, withdrawn and monitored in accordance to the conditions defined in Chapter 7 of the Law on Energy Regulator and relevant rules issued by the Energy Regulatory Office.
1. Vertically integrated heat enterprises shall perform generation, distribution, and supply activities in a functionally separate manner. Transfers of information between such separate activities shall be prohibited except to the extent that the information is required to perform the tasks of the public supplier.
2. For the purpose of avoiding discrimination, cross-subsidization, and distortion of competition, vertically integrated heat enterprises shall keep in their internal accounting such separate accounts for their generation, distribution, and supply activities, as they would be required to do if the activities in question were carried out by separate enterprises.
3. Vertically integrated heat enterprises shall keep separate accounts for supply activities to eligible and non-eligible customers, as well as for non-heat activities.
PRODUCTION OF HEAT
The producer of heat shall be a heat enterprise holding generation license, or heat enterprises with a generation capacity not exceeding 1 Mw or natural or legal person exempt from holding a License in accordance with the Law on Energy Regulator.
1. A producer of heat shall be entitled to:
1.1. use along the process of heat production those primary energy sources it deems most suitable, provided that it complies with the technical characteristics, and ecological criteria contained in the relevant acts;
1.2. connect their heat plants to the distribution network under the conditions set in this Law, relevant codes approved and rules prescribed by the Energy Regulatory Office;
1.3. conclude contracts for the sale of heat under the terms of this Law, and the rules prescribed by the Energy Regulatory Office;
1.4. transmit their heat through the distribution networks;
1. A producer shall be obliged to:
1.1. comply with the conditions stipulated in the Law on Energy Regulator and conditions of their license for carrying out the generation,
1.2. comply with laws or regulations related to environmental protection, and ensure permanent control of impact on the environment.
1.3. equip themselves with adequate metering devices for the measurement of heat that enters a distribution network;
1.4. accomplish the requirements and other obligations that may arise from the enforcement of this Law, related legislation , codes and regulations.
2. For measurement of heat producers shall use metering devices, located in points, specified by the metering code.
Producers with heat production units exceeding 1 MW, from the date this law enters into force shall be obliged to sell the produced heat to a public supplier at a regulated price, if the public supplier is in need of such heat.
1. Heat producers with public service obligations shall maintain sufficient minimum fuel stocks to support a continuous and reliable heat generation, and a specific reserve capacity, thus ensuring a reliable supply to customers.
2. The Ministry of Energy and Mining shall determine the type and extent of the minimum fuel stocks or of the specific reserve capacity for individual types of generation facilities.
3. The Energy inspectorate, established under the Law on Energy, will perform the supervision including the maintaining the level and quality of fuel reserves.
4. The costs of maintaining the minimum fuel stocks and the specific reserve capacity shall be treated as operating cost of the producer obliged to maintain them.
UNUTILIZED HEAT, RENEWABLE ENERGY RESOURCES
1. The heat enterprises that generate heat using otherwise unutilized heat, renewable energy resources or waste, or co-generate heat and electricity, are entitled to obtain certificates of origin from the Energy Regulatory Office.
2. Public Suppliers shall give purchasing priority to heat for which a certificate of origin has been issued, provided that the cost of such heat does not increase the price of heat to an unsustainable level in Kosovo.
3. The public supplier shall be required to purchase at a regulated price the entire amount of heat for which a certificate of origin has been issued to meet the needs of heat consumption in Kosovo with the exception of any amount for which the producer has entered into contracts pursuant to the provisions of this Law. The Energy Regulatory Office may compensate the costs to the public supplier by a specific charge on the services of the distributor.
1. At the request of a producer, the Energy Regulatory Office shall issue a certificate of origin, which:
1.1. certifies the capacity of such heat generation plant using unutilized heat, renewable energy resources and waste, as well the sources of heat from co-generation of heat and electricity;
1.2. specifies the times for submitting information and statements to the Energy Regulatory Office
2. On the basis of the certificate of origin, a producer shall be entitled to issue and sell green certificates to other producers producing green house gases in a quantity exceeding the limits established by the law for the amount of heat produced from unutilized heat, renewable energy resources and waste or from co-generation plants.
3. A producer exceeding the limits of green house gases production established by the law shall be considered to have fulfilled its obligation under paragraph 1 of Article 9 of this law on submission to the Energy Regulatory Office of green certificate(s) indicating the amount of heat generated from using otherwise unutilized heat, renewable energy resources or waste or the amount of heat co-generated with electricity (resources foreseen in sub-paragraph 1.1. of paragraph 1 of this article) .
4. In a case that the amounts of heat specified in a green certificates and amount of heat actually generated or co-generated with electricity by the qualified producer is not the same, Energy Regulatory Office may undertake measures upon pertinent act.
1. The Ministry of Energy and Mining shall specify the minimum mandatory quotas for heat generation using otherwise unutilized heat, renewable energy resources or waste and co-generation of heat and electricity, as a percentage of the total annual generation by each producer over a ten (10) year period from the date of introduction of the system for issuing and trading with green certificates.
2. The Ministry of Energy and Mining may prescribe special, more favorable conditions for the purchasing priority of heat produced from renewable energy sources and co-generation of electricity and heat.
1. The distribution network shall be operated by a distributor obtaining a license for performing such activities.
2. Distributor shall provide the following services for the definite territory covered by the distribution network:
2.1. distribution network management;
2.2. maintenance of network, sites and facilities in accordance with the technical requirements;
2.3. harmonization of its projects with economic development projects;
2.4. foresees the demands on the covered territory;
2.5. continuous and safe transportation of heat through the distribution network;
2.6. provide network users with the information they need for efficient access to the network; and
2.7. other relevant services.
3. A Distributor shall:
3.1. study the economic development in the sector and plan for distribution network expansion projects in accordance with the economic development parameters;
3.2. prepare yearly short- and long-term plans for developing the distribution network and co-ordinate such short- and long-term plans with Ministry of Energy and Mines and other municipalities;
3.3. assist the Ministry of Energy and Mines and municipalities in the preparation of their plans, programs and development strategies;
3.4. make the content of its studies, plans available to the heat generation enterprises.
4. The distributors shall allow heat generators to connect to the distribution network whenever it is technically feasible and satisfies the requirements established by the present Law and by other relevant legislative instruments.
5. The expansion and reconstruction of the heat distribution networks from the heat delivery point to the heat generator shall be the responsibility of the distributor.
6. Distributors shall connect to the distribution network, as a priority, any heat producers generating from renewable energy sources and co-generation.
7. The terms and procedures for connection to the distribution network shall be regulated in the distribution code.
8. A distributor shall carry out its function in accordance with transparent and non-discriminatory procedures and based on market economy principles.
1. A distributor shall not divulge confidential information obtained in the course of carrying out its business, and shall prevent information about its own activities which may be commercially advantageous from being disclosed in a discriminatory manner.
2. Notwithstanding paragraph 1, the Energy Regulatory Office may require a distributor to divulge confidential information required to perform its functions, powers, and duties.
PRICE-REGULATED HEAT MARKET SUPPLY
The supply of non-eligible customers with heat shall be carried out by the public supplier, traders, or producers with a license to conduct such supply.
1. The public supplier shall be responsible for the supply of heat to the delivery point in the amount and at the level of quality established by the Energy Regulatory Office.
2. Under its license, the public supplier shall have the right to:
2.1. sell heat to non-eligible customers at a regulated price;
2.2. purchase heat from producers with an installed capacity of 1 MW which exists on the date of promulgation of this law at a regulated price;
2.3. purchase heat from other producers at an unregulated price;
2.4. bill and collect payment from its customers;
2.5. handling the complaints of its customers.
3. Transactions between the following categories shall be concluded at regulated prices:
3.1. producer and supplier;
3.2. supplier and final customers connected to the distribution network;
3.3. supplier and distributor for the heat required to compensate the costs of technological heat transport and losses using the corresponding distribution network.
1. The public supplier shall conclude long-term purchase contract with producers to the extent required to guarantee sufficient supplies.
2. Any long-term purchase contract of heat shall include the following elements:
2.1. extent of supply;
2.2. technical conditions and quality of supplies;
2.3. scheduling of supply and receipt;
2.4. responsibility for supply and receipt;
2.5. price and other finance elements;
2.6. payment for supplies; and
2.7. sanctions for breaches of any contractual provisions.
3. Long-term purchase contract shall be concluded for a period of one (1) year up to five (5) years with the possibility of renewal.
4. Annual contract shall define in greater detail the compulsory components of long-term purchase agreement and shall stipulate the price and other elements for charging of heat supplied.
5. The provisions of any long term purchase agreement under this Article shall be subject to the approval and monitoring by the Energy Regulatory Office.
FREE HEAT SUPPLY MARKET
1. Supply shall eventually become a competitive activity and any heat enterprise may apply for a supply license to serve eligible customers.
2. The Ministry of Energy and Mining shall prescribe the conditions for determining eligible customers.
3. A customer may obtain the status of eligible customer by responding to a public announcement announced by the Energy Regulatory Office each year. Customers who do not respond to the public announcement may not obtain the status of eligible customer for that year. The Energy Regulatory Office shall make a decision on granting the status of an eligible customer.
4. Eligible customers shall have the right to remain in the unregulated market or to be supplied by the public supplier in accordance with the procedure established by the Energy Regulatory Office.
5. Eligible customers shall notify the distributor relevantly the heat enterprise at least thirty (30) days in advance of the contracts it will sign for the supply of heat in accordance with the distribution code.
1. Heat enterprises, shall be able to provide a supply to their own premises, their subsidiaries and eligible customers through a direct heat pipe.
2. All eligible customers shall have the right to be supplied through a direct heat pipe by a producer and any supply heat enterprises.
3. The criteria for the grant of authorizations for construction of a direct heat pipe line shall be set by the Energy Regulatory Office objective and non-discriminatory manner.
4. The Energy Regulatory Office shall grant the authorizations for construction of a direct heat pipe in accordance with the provisions of Chapter 8 of the Law on the Energy Regulator, UNMIK Regulation No. 2004/20 of 30 June 2004.
1. Heat enterprises may conclude commercial contracts with its customer for installation, service, maintenance and extension of the secondary network downstream the delivery point.
2. According to paragraph 1 of this article those contracts shall not be subject to the regulation by the Energy Regulatory Office.
3. Heat Enterprises shall keep in their internal accounting separate accounts for the activities defined under paragraph 1 of this article.
RIGHTS NAD RESPONIBILITIES OF CUSTOMERS
1. Each customer located in an area covered by a heat enterprise shall have the right to be supplied, if such customer:
1.1. owns or is fully authorized to operate and use all or parts of the secondary internal network and satisfies the technical and operational safety requirements,
1.2. satisfies the conditions for connection to the distribution network and
1.3. has signed a written agreement with the supplier.
2. All customers in areas covered by the heat distribution network have the right to be connected, if the connection conditions prescribed in codes have been met.
3. A heat enterprise may refuse temporarily to connect a customer to the heat system if it determines that the facilities, equipment or distribution network fail to meet the technical standards or other conditions prescribed in codes.
4. A customer shall be informed in writing of the reason for any such refusal.
5. Illegal connections and unauthorized works on the heating system shall be subject to relevant subsidiary acts duly taking into account existing legislation.
6. A customer who causes damages to the distributor by carrying out activities under paragraph 5 of this Article shall be obliged to pay for those damages.
7. Customer shall be obligated to provide premises with no fee for establishment of delivery point equipments and a free access to the employees of Heating Enterprise for control of such equipments.
1. The supply of heat to final customers and contractual relations shall be carried out on the base of General Conditions of Energy Supply, issued by the Energy Regulatory Office.
2. Each customer is obliged to pay the heating invoices, whereas all billing, collection, and sanction procedures shall be implemented in accordance with subsidiary acts.
1. Suppliers may temporarily suspend supply of the customer with heat, in compliance with relevant act.
2. The supplier shall issue a notification to the customer informing about the suspension of supply. Such notification shall clearly describe the reasons and duration of the suspension of supply with heat and set out measures to be taken for the suspension of supply to cease.
3. The Supplier can temporarily suspend service to the customer, if the customer fails to fulfill its contractual obligations, including remedying a technical fault that has occurred in the customer's network or installation. A temporary suspension may last up to fifteen (15) days, and if the cause for such suspension lies with the customer, the Supplier is entitled to disconnect the customer permanently, and the customer shall bear the costs of such disconnection.
4. The heating company shall reconnect the customer to the heating system within three (3) days after the reasons for its suspension no longer exists.
5. For eligible customer, the rules for suspension shall be specified in the supplying contract with the supplier.
6. The customer shall be compensated pursuant to the relevant acts, for suspensions of energy supply which are not as a result of his fault.
1. The Ministry Education and the Ministry of Health shall establish a list of institutions entitled to get an uninterruptible heat supply.
2. The customers entitled to an uninterruptible heat supply shall be provided with technical possibilities for securing heat production, either by supplying the customer's facilities by two connections from two different sections of the heat system, or by installing stand-by heating facilities.
3. In the case of installation of stand-by heating equipment, the customer entitled to an uninterruptible heat supply may use both the supply from the heat enterprise and the stand-by heating equipment.
4. If the customer entitled to an uninterruptible heat supply is using for heating supply only the reserve stand-by type of heating, paying the heat enterprise for the reserve capacity.
5. Customers entitled to an uninterruptible heat supply are not exempted of possibility for temporarily suspension for the reasons defined in Article 25 of this Law.
ACCESS TO THE NETWORKS
1. The distributor shall allow the producers, suppliers and eligible customers, access to the heat system on the basis of Energy Regulatory Office relevant rules and regulations.
2. The distributor shall once a year prepare prices and tariffs for the use of the networks based on the average prices for the preceding twelve (12) months period.
3. The price and tariff list under paragraph 2 of this Article shall be approved by the Energy Regulatory Office.
4. The distributor shall publish the approved prices and tariffs.
1. The Distributor may refuse access to the heat system where it lacks the necessary distribution capacity. Reasons shall be given for any such refusal in a written report within thirty (30) days from the day the request for access has been made.
2. Any person who for any reason has been refused access to a heating network may file an appeal within fifteen (15) days from the day the written notice has been issued.
3. The appeal is filed with the Energy Regulatory Office which shall issue a decision within thirty (30) days from the day of receiving the appeal.
If no access to the distribution networks is allowed to the eligible customers or producers, who wish to conclude contracts with eligible customers, the eligible customers or producers may apply to the Energy Regulatory Office for authorization for the construction of a direct heat pipeline for supply.
METERING AND BILLING FOR REGULATED MARKET
1. Metering devices shall measure the heat supplied to the customer; the published metering code determines the requirements for installing, operating, maintaining and replacing metering devices.
2. Heat used by customers shall be metered using metering devices owned by the distributors, and located at the delivery point, as near as possible to the customer's property boundary.
3. The property boundary of heat facilities and the place for locating the metering devices is determined in accordance with the requirements set out in the published metering code.
4. Where approved tariffs enable the customers of a given group to choose the mode and type of metering device for recording the consumed heat, the distribution enterprises, shall install that metering device corresponding to the customer's choice as stated in writing by the customer.
5. The published metering code regulates the terms and procedures for replacing metering devices at the customer's request in the cases falling under paragraph 4 of this Article.
1. The Codes under Article 3 shall contain technical rules establishing minimum technical design, operational requirements and standards for heat and:
1.1. connection to the system of generation installations, distribution systems, directly connected customers' equipment, and direct heat pipes;
1.2. structure of heat delivery stations and network piping and equipment;
1.3. management of heat system;
1.4. maintenance and development of the distribution networks;
1.5. distribution networks management;
1.6. heat metering, including metering principles, the manner and location of meters, the terms and procedure for inspecting, calibrating and reading meters, and the development and maintenance of relevant data bases containing the data registered by any commercial metering devices.
2. The codes listed under Article 3 shall be produced and drafted by the heat enterprises and approved by the Energy Regulatory Office.
1. Distributors shall install metering devices for every customer connected to the heat system within one (1) year upon the promulgation of this Law.
2. Distributors shall purchase from the customers the metering devices, which at the time this Law comes into effect are owned by customers, at their current market value within a two (2) year period of the date this Law comes into effect.
3. The obligation of distributor to purchase the metering devices under paragraph 2 of this Article shall not apply in the event that the enterprise installs its own devices to replace the existing ones, under the terms provided for purchasing the devices.
4. In conformity with the requirements of this Law, commercial relations shall be established in the heat sector within six (6) months after adopting the General Conditions for Supply of Energy (as defined in Law on Energy) but not be later than twelve (12) months from the effective date of this Law.
5. The supplier shall prepare and propose to every customer a commercial contract on the heat supply in terms specified in paragraph 4 of this Article, and shall hold an up-to date register of the current customers and of all valid contracts.
6. In the event that the commercial supply contract is not concluded, due to fault of the customer, within the period defined in paragraph 4 of this Article the distributor shall interrupt the connection of person unlawfully receiving or taking heat from supply enterprise.
7. The distributor shall prepare the metering code and the distribution code and present them for approval to the Energy Regulatory Office within twelve (12) months after the promulgation of this Law.
8. The supplier shall prepare the customer protection code and submit it to the Energy Regulatory Office for approval one (1) year after the promulgation of this Law.
9. Non-metered customers shall be subject to a normative tariff.
10. If at the date of entering in force of this Law, the delivery point is not yet equipped with meters, the non-eligible customer connected to this delivery point will be billed according to the normative tariff for the year of bill and in proportion to the total surface of the non-eligible customer's facility.
11. Not later than one month after than a meter has been installed by the heat enterprise at a delivery point, the non-eligible customer connected to this delivery point will be billed according to the metered tariff of the year when the meter has been installed.
12. In buildings including several end-users of heat, the heat enterprise shall bill the total consumption measured at the delivery point to the individual end-users in proportion of the individual end-users' facility area.
13. The heat installation for new constructions shall be separately designed for each apartment and/or shop. This shall be ensured by the competent authorities issuing construction licenses.
1. House administration (owners, future housing association or other forms of house management) in accordance to the relevant legislation shall have responsibility of operation and maintenance of the non-regulated system downstream the delivery point (the secondary system).
2. If a building, which is jointly or partially owned without the proper establishment of a housing association, has several end-users of heat, the existing heat enterprises shall operate and maintain the secondary system based on contractual arrangements with the owners of the building.
3. The heat enterprise is entitled to invoice separately the costs for operation and maintenance of the secondary system, according to a tariff approved by the Energy Regulatory Office.
4. Until the drafting of a proper legislation according to paragraph 1 of this Article, the end-users/owners of the apartments shall allow access to their property in order that the heat enterprise can fulfill its responsibilities under this Law.
Upon entry into force of this Law, all acts that are in conflict with the provisions of this Law shall cease to be in effect.
This law enters into force fifteen (15) days after publication in the Official Gazette of the Republic of Kosovo.
Law No. 03/L-116
20 November 2008
Promulgated by the Decree No. DL-066-2008, dated 13.12.2008, of the President of Republic of Kosovo, Dr. Fatmir Sejdiu.
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