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District Heating Act

Content

District Heating Act - content
Issuer:Riigikogu
Type:act
In force from:23.03.2014
In force until:30.06.2014
Translation published:27.03.2014

District Heating Act

Passed 11.02.2003
RT I 2003, 25, 154
Entry into force 01.07.2003

Amended by the following legal instruments (show)

PassedPublishedEntry into force
10.03.2004RT I 2004, 18, 13115.04.2004
07.12.2006RT I 2006, 58, 43901.01.2007
07.02.2007RT I 2007, 17, 8009.03.2007
22.11.2007RT I 2007, 66, 40801.01.2008
10.06.2009RT I 2009, 34, 22506.07.2009
15.06.2009RT I 2009, 39, 26224.07.2009
22.04.2010RT I 2010, 22, 10801.01.2011, enters into force on the day determined by the decision of the Council of the European Union concerning repeal of the derogation established in respect of the Republic of Estonia on the basis of Article 140 (2) of the Treaty on the Functioning of the European Union, Decision No. 2010/416/EU of the Council of the European Union (OJ L 196, 28.07.2010, pp. 24–26).
03.06.2010RT I 2010, 35, 19208.07.2010
03.08.2010RT I 2010, 56, 36301.11.2010, partially 01.01.2011
19.02.2014RT I, 13.03.2014, 223.03.2014, partially 01.01.2015, 01.01.2017 and 01.01.2019

Chapter 1 GENERAL PROVISIONS 

§ 1.  Scope of application of this Act

 (1) This Act governs activities related to the production, distribution and sale of heat by way of district heating networks (hereinafter, ‘networks’), and connection to district heating networks.

 (2) The activities specified in subsection 1 of this section shall be coordinated and conform to the principles of objectivity, equal treatment and transparency in order to ensure a secure, reliable and effective heat supply which is provided at a justified price and in compliance with environmental requirements and the needs of the customer.

 (3) The provisions of the Administrative Procedure Act apply to administrative proceedings provided in this Act without prejudice to the rules specific to this Act.

§ 2.  Definitions

  For the purposes of this Act:
 1) ‘district heating’ means the production of heat and distribution thereof through a network with the aim of supplying customers with heat by way of district heating systems;
 2) ‘district heating system’ means a technical system for the production, distribution and consumption of heat which is composed of technical equipment for the production, distribution and consumption of heat and of the construction works connected thereto;
 3) ‘network’ means a fixed operational assembly of pipelines, equipment, auxiliary equipment and the construction works connected thereto, or the part of such an assembly which is necessary for the distribution of heat; consumer installations are not deemed to be part of a network for the purposes of this Act;
 4) ‘consumer installation’ means an operational assembly which is or can be connected to a network of interconnected heat pipelines and auxiliary equipment for supplying a customer with heat and which is built within a registered immovable, construction work or a complex of construction works which are functionally linked to one another and which constitute a single economic unit, and on the land necessary for the servicing of such a complex;
 5) ‘supply point’ means the point of connection of a network and a consumer installation;
 6) ‘service boundary of a network’ means the boundary up to which the network operator maintains a district heating system on contract basis;
 7) ‘network area’ means an area in which a network that is owned by or that is in the possession of a single network operator is located and developed;
 8) ‘licensed territory’ means the area, defined in the heating undertaking’s activity licence, in which the heating undertaking operates;
 9) ‘customer’ means a person who purchases heat distributed through a network;
 10) ‘network operator’ means an undertaking which uses a network to distribute heat;
 11) ‘connection’ means the connection of a customer installation to a network.
 12) ‘non-fuel renewable energy sources’ means solar energy and any thermal energy converted from solar energy, wind energy and any thermal energy converted from wind energy, geothermal energy and any thermal energy converted from geothermal energy through the use of electricity generated from renewable energy sources, any heat which is used in a building and which escapes from the building (via ventilation, sewerage, etc.) and any thermal energy converted from such heat through the use of electricity generated from renewable energy sources.
[RT I 2010, 56, 363 - entry into force 01.11.2010]

§ 3. Energy conservation programme
[Repealed - RT I, 13.03.2014, 2 - entry into force 23.03.2014]

Chapter 2 ORGANISATION OF DISTRICT HEATING  

§ 4.  Heating undertaking

  A heating undertaking is an undertaking which operates in at least one of the areas of activity constituted by the production, distribution or sale of heat and which is responsible for attending to commercial, technical or maintenance issues related to such activities.

§ 5.  District heating regions

 (1) A district heating region is an area determined by a comprehensive plan within which consumer installations are provided with heat by way of district heating in order to ensure a secure, reliable and effective heat supply which is provided at a justified price and in compliance with environmental requirements and the needs of the customers.

 (2) The council of a local authority possesses the authority to determine district heating regions within the boundaries of the administrative territory of the authority. Any decision which determines a district heating region must be informed by the principles provided in subsection 1 of this section.

 (3) Persons who do not use district heating at the time when the district heating region is determined are not required to connect to the network.

 (4) Subject to the conditions and pursuant to the procedure determined by the local council, consumer installations already connected to a network within a district heating region may be disconnected from the network and other means than district heating may be used to provide heat to a construction work which is under construction or which is being renovated.

 (41) In addition to heat provided by the district heating network, customers in a district heating region may also purchase thermal energy converted from non-fuel and renewable energy sources from the producers of such thermal energy.
[RT I 2010, 56, 363 - entry into force 01.11.2010]

 (5) Before establishing a district heating region for an area designated as a densely populated area to be built up with new construction works, an analysis concerning the possibilities of arranging heat supply on the basis of the principles provided in subsection 1 of this section must be carried out. When a district heating region is established for an area designated as a densely populated area to be built up with new construction works, connection to the network shall be mandatory for all persons located within the district heating region unless the council of the local authority provides otherwise.

 (6) A decision of the council of a local authority concerning the establishment of a district heating region shall, amongst other things, set out the following:
 1) the boundaries of the district heating region;
 2) the conditions and procedure for connection to and disconnection from the network, having regard to the provisions of subsections 4 and 5 of this section;
 3) the general quality requirements for district heating;
 4) [Repealed – RT I 2010, 56, 363 – entry into force 01.11.2010]
 5) the development obligations of the heating undertaking;
 6) the date as of which the conditions, requirements and procedures become effective.

 (7) Before establishment of the conditions, requirements and procedures on the basis of subsection 6 of this section, endorsement must be obtained for such conditions, requirements and procedures from the heating undertakings operating within the relevant district heating region. [RT I 2010, 56, 363 – entry into force 01.11.2010]

§ 6.  Production, distribution and sale of heat

 (1) For the purposes of this Act, the production of heat means an activity which results in the creation of thermal energy used in customer installations.

 (2) For the purposes of this Act, the distribution of heat means the transmission of heat to customer installations through a network.

 (3) For the purposes of this Act, the sale of heat is the transfer of heat to a customer either for a charge or without charge.

§ 7.  Obligations of heating undertakings

 (1) A heating undertaking must ensure that customers and other heating undertakings are supplied with heat in compliance with this Act, the conditions of the undertaking’s activity licence and any contracts entered into.

 (2) A heating undertaking must, in its accounting arrangements, keep separate accounts of the production, distribution and sale of heat and of any areas of activity not related to the production, distribution and sale of heat.

 (3) A heating undertaking whose estimated annual production volume exceeds 500,000 MWh per network area is provider of a vital service by virtue of section 34(9)(1) of the Emergency Preparedness Act and shall be required to provide for the possibility of using reserve fuel for the production of heat such as to guarantee the supply of heat during a period of seventy two hours.
[RT I 2009, 39, 262 - entry into force 24.07.2009]

 (4) The quantity of reserve fuel shall be calculated on the basis of the daily maximum consumption of the previous year.
[RT I 2007, 17, 80 - entry into force 09.03.2007]

§ 8.  Sale and pricing of heat

 (1) A customer shall purchase heat from the network undertaking to whose network the customer’s consumer installation is connected.

 (2) Within technical limits of the network, a heating undertaking shall be required to sell heat to all customers who have a network connection and who are located within its network area.

 (3) The maximum price of heat shall be set such that:
 1) the necessary operating expenses, including the expenses incurred in relation to the production, distribution and sale of heat, are covered;
 2) any investments necessary in order to perform the operational and development obligations can be made;
 3) environmental requirements are met;
 4) quality and safety requirements are met;
 5) justified profitability is ensured.

 (4) A heating undertaking must make public the maximum price set within its network area at least one month before the date as of which the price applies.
[RT I 2009, 34, 225 - entry into force 06.07.2009]

§ 9.  Approval of price of heat

 (1) A heating undertaking which:
 1) sells heat to customers;
 2) sells heat to a network operator who sells heat to customers;
 3) produces heat in a process of combined generation of heat and power
must obtain, for each network area separately, the approval of the Competition Authority regarding the maximum price of the heat to be sold.
[RT I 2010, 56, 363 - entry into force 01.11.2010]

 (2) [Repealed – RT I 2010, 56, 363 – entry into force 01.11.2010]

 (3) [Repealed – RT I 2010, 56, 363 – entry into force 01.11.2010]

 (4) A heating undertaking which is required to obtain approval regarding the maximum price of heat may sell heat at a price which does not exceed the approved maximum price.

 (5) The Competition Authority shall make a decision concerning approval of the maximum price specified in subsection 1 of this section within thirty days as of the submission of a duly filled out application to set prices. If the application is particularly complex or requires more processing work than usual, the Competition Authority may extend the term for processing the application to a maximum of 90 days and shall inform the applicant of the extension of the term before the original term expires.
[RT I 2010, 56, 363 - entry into force 01.11.2010]

 (6) If the Competition Authority so requires, a seller of heat must explain and provide reasons for the principles which it applies in the setting of maximum prices.
[RT I 2007, 66, 408 - entry into force 01.01.2008]

 (7) The run of term for processing an application for approval of a maximum price specified in subsection 4 of this section shall be suspended by operation of law if the Competition Authority has not received all the information which it has required to be submitted and which is necessary to give the approval requested in the application to set prices. [RT I 2007, 66, 408 – entry into force 01.01.2008]

 (8) A heating undertaking specified in subsection 1 of this section which seeks approval regarding a maximum price shall allow the Competition Authority to inspect its accounts and shall provide any needful explanations regarding its economic activities.
[RT I 2007, 66, 408 - entry into force 01.01.2008]

 (9) The Competition Authority shall have the right to request additional information from the heating undertaking, a government agency or a local authority agency if this is required for making a decision concerning approval of the maximum price or for verification of any information submitted.
[RT I 2007, 66, 408 - entry into force 01.01.2008]

 (91) A heating undertaking shall monitor developments which are independent of its activities and which influence the price of heat charged to customers and shall submit to the Competition Authority a new application for approval of a maximum price within 30 days as of learning of a development which may decrease the price of heat charged to customers by more than 5 per cent.
[RT I 2010, 56, 363 - entry into force 01.11.2010]

 (10) A heating undertaking may seek approval of a price formula from the Competition Authority for a period of up to three years. The price formula is used in the process of approving maximum prices of heat at the request of the heating undertaking in a situation in which developments which are independent of its activities and which influence the price of heat are ascertained. The Competition Authority shall make a decision concerning approval of maximum prices on the basis of a price formula within ten working days as of receipt of a duly filled out application.
[RT I 2010, 56, 363 - entry into force 01.11.2010]

 (101) The Competition Authority may revoke the approval it has given regarding a maximum price and may determine a temporary selling price of heat for the heating undertaking in the situation in which the heating undertaking sells heat at a price which does not comply with the requirements set out in section 8(3) of this Act and has failed to comply with an enforcement order of the Competition Authority. The price determined by the Competition Authority shall remain in force until the heating undertaking obtains the approval of the Competition Authority regarding a new maximum price of heat.
[RT I 2010, 56, 363 - entry into force 01.11.2010]

 (102) In determining the price referred to in subsection 101 of this section, the Competition Authority shall rely on the existing price structure of the heating undertaking, the justified expenses incurred by the undertaking during the financial year preceding the year when the enforcement order was issued and the rate of justified profitability. If the heating undertaking has an approved price formula, the Competition Authority shall rely on the price formula in determining the price. The Minister of Economic Affairs and Communications shall by regulation establish a procedure for determining the price of heat, having regard to the principles set out in this subsection.
[RT I 2010, 56, 363 - entry into force 01.11.2010]

 (11) The Competition Authority may not disclose to any third party any information received in relation to approving a maximum price, except where disclosure of such information is prescribed by law or where communication of such information is necessary in order to perform obligations arising from this Act.
[RT I 2007, 66, 408 - entry into force 01.01.2008]

Chapter 3 OPERATION OF NETWORKS 

§ 10.  Connection to network

 (1) Within technical limits of the network, a network operator shall be required to provide a network connection to the customer installation of any person who is located within its network area and who has applied for a connection (hereinafter, ‘connectee’), unless this endangers the security of supply for earlier connectees.

 (2) A network operator must provide written reasons for any refusal to grant an application of a connectee within thirty days as of receipt of the application.

 (3) On the basis of an application from a connectee, the network operator shall issue conditions for connection to the network (hereinafter, ‘conditions of connection’).

 (4) The conditions of connection shall:
 1) be transparent and unambiguous;
 2) comply with the principle of equal treatment of similar connectees;
 3) take into consideration the technical and economic conditions of each particular connection;
 4) take into consideration the interests of network development and stability;
 5) take into consideration the technical limits of the network.

 (5) The conditions of connection shall determine:
 1) the supply point;
 2) location of the metering system;
 3) the service boundary of the network;
 4) the obligations of the connectee and of the network operator;
 5) calculation of the connection fee;
 6) the term of validity of the conditions of connection;
 7) any other special conditions.

 (6) For the purposes of this Act, replacement of a consumer installation, or any part thereof, which is connected to a network, or a change of owner or possessor of a consumer installation is not regarded as connection to the network, and no connection fee shall be charged to the owner or possessor in such cases, provided that the following conditions are met concurrently:
 1) the location of the supply point remains unchanged;
 2) no change is requested of the technical conditions;
 3) the technical conditions necessary for connecting the connectee’s consumer installation continue to exist.

§ 11.  Entry into network connection contract

 (1) In order to connect to a network, the owner or possessor of the consumer installation to be connected to the network shall enter into a written connection contract (hereinafter, ‘contract’) with the network operator.

 (2) The contract shall, amongst other things, determine:
 1) the supply point;
 2) location of metering system;
 3) the service boundary of the network;
 4) the connection fee;
 5) the technical conditions for connection;
 6) the term for performance of the contract.

 (3) The Competition Authority has the right to scrutinise the justifications for any activities of a heating undertaking specified in section 9(1) of this Act in refusing to grant an application for connection, in determining the connection fee and in establishing the terms and conditions of contracts.
[RT I 2010, 56, 363 - entry into force 01.11.2010]

 (4) The contract specified in subsection 1 of this section constitutes the basis for entry into a contract for the purchase and sale of heat.

§ 12.  Calculation of connection fees

 (1) Network operators have the right to charge justified connection fees to connectees.

 (2) The connection fees shall be calculated with the aim of ensuring the following for each connection provided:
 1) coverage of necessary investments;
 2) compliance with environmental requirements;
 3) compliance with quality and safety requirements.
 4) justified profitability.

 (3) The connection fee shall be calculated by the network operator.

 (4) If the technical conditions of the connection provided by the contract are modified on the initiative of the network operator, the costs involved shall be borne by the network operator.

 (5) A network operator may charge a justified fee for any changes in the technical conditions of the consumption of heat made on the initiative of the customer.

§ 13.  Licensed territory of network operators

 (1) A network operator shall define its network area and ensure that all interested parties have access to the layout and description of the networks.

 (2) A network operator may have several network areas which together constitute the licensed territory of the network operator.

 (3) The network areas of different network operators may overlap.

§ 14.  Rights and obligations of network operators

 (1) A network operator is required to ensure that customers who have a network connection are supplied with heat in accordance with this Act, the conditions of the activity licence or a decision of the council of the local authority, and any relevant contracts.

 (2) A network operator is responsible for the functioning and maintenance of the network which it owns or possesses.

 (3) A network operator is required to develop the network in a manner which ensures that all consumer installations located within the network area of the network operator can be connected to the network.

 (4) A network operator shall organise the metering of heat consumed from the network and maintain corresponding records, unless agreed otherwise.

 (5) A network operator is required to provide other network operators within its licensed territory with the information necessary to ensure the distribution and sale of heat in a manner which enables the network to be used in a stable and effective manner.

 (6) A network operator may terminate its activities only if it transfers the obligations incumbent on it by virtue of this section to another undertaking.

 (7) A network operator shall give the Competition Authority at least twelve months’ written notice regarding termination of its activities, specifying the date and schedule for termination, and provide a sufficiently detailed overview of the measures which guarantee that the requirements provided in this section are met.
[RT I 2007, 66, 408 - entry into force 01.01.2008]

§ 141.  Arrangements for purchase of heat

 (1) A producer of heat shall make investments in the production of heat, and a network operator, in order to ensure the security of investments, shall, where this is needful, enter into contracts, for a term of up to 12 years starting from the time of commencement of production by means of a generating installation, having regard to the principles set out in section 1(2) of this Act. If possible, preference shall be given to heat produced from predominantly renewable energy sources or heat produced predominantly in an efficient cogeneration regime from renewable energy sources, from waste within the meaning of the Waste Act, from peat or from carbonisation gas obtained as a result of the processing of oil shale, and to the best clean technologies currently available.

 (2) If the need arises for new production capacities and/or several undertakings have expressed in writing their wish to enter into contracts, the network operator shall organise a tender for the award of the contract.

 (3) If the network operator and the producer of heat are one and the same legal person, the provisions applicable to the contract shall be applied to any investments made by the network operator in the production of heat.

 (4) The network operator shall, in advance, obtain the approval of the Competition Authority regarding any contracts for the purchase of heat or any investments in new production capacities, and regarding any terms and conditions of tenders for the award of contracts, having regard to the conditions provided in subsections 1 and 2 of this section.

 (5) The Minister of Economic Affairs and Communications shall, by regulation, establish a procedure for organising tenders for awards of contracts, and establish methods for the evaluation of bids in order to assess the compliance of entry into contracts and of the making of investments described in subsections 1 and 2 of this section with the requirements established in the law.

 (6) The Competition Authority shall consider approval requests described in subsection 4 of this section in a manner analogous to the procedure defined in section 9(5) of this Act. The Competition Authority shall refuse to grant approval if the principles set out in section 1(2) of this Act, the requirements established in this section or any other requirements emanating from this Act are not complied with.

 (7) If the Competition Authority has reasonable cause to doubt whether the production of heat in a network area is economically efficient or whether, pursuant to a contract which was entered into before the entry into force of this section, compliance with the requirements set out in subsection 1 of this section is ensured, the Competition Authority is entitled to issue an enforcement order to the network operator directing the operator to hold a tender in accordance with the principles set out in this section.

 (8) Contracts for the production of heat between a producer of heat and a network operator, entered into before 1 November 2010 shall be regarded as valid until their term expires, but not longer than for 12 years as of the moment that a generating installation started production, provided that the heat is produced pursuant to the principles set out in subsection 1 of this section and section 1(2) of this Act. Upon expiration of the term referred to above, the network operator may hold a tender in respect of any vacant capacities pursuant to the procedure specified in this section.

 (9) The network operator shall submit a list of contracts which it has made with the producer of heat before 1 November 2010 and which continue to be valid, to the Competition Authority by 31 December 2010 at the latest.

 (10) The provisions of this section shall not release the heating undertaking from the obligation to obtain the approval of the Competition Authority for any maximum price of heat pursuant to the procedure set out in section 9 of this Act.
[RT I 2010, 56, 363 - entry into force 01.11.2010]

§ 15.  Metering and installation of metering systems

 (1) A network operator shall ensure that all quantities of heat which enter or leave its network are metered and that meter readings are collected and processed.

 (2) U nless otherwise stipulated in the contract, in a network which is in the possession of a network operator, the network operator shall install, at its own expense, metering systems as designed together with the necessary auxiliary equipment.

 (3) I f the existing metering system of a customer does not comply with the established technical requirements, the network operator shall replace the metering system at its own expense, unless otherwise stipulated in the contract.

 (4) If the customer wishes to change the capacity of the consumer installation, the network operator shall replace or reset the heat metering system and any equipment which limits usage capacity. The customer shall cover the expenses of resetting.

§ 16.  Illegal use
[RT I 2007, 17, 80 - entry into force 09.03.2007]

 (1) The following constitutes illegal use of heat:
[RT I 2007, 17, 80 - entry into force 09.03.2007]
 1) concealing or reducing of the actual amount consumed by way of damaging the meters, tampering with readings, or damaging the metering systems, parts thereof or stop valves;
 2) unmetered consumption from a connection without the permission of the network operator; 3) consumption without a valid written contract.

 (2) The network operator is entitled to demand compensation for illegally used heat in the amount which equals three times the cost of the quantity of heat consumed.
[RT I 2007, 17, 80 - entry into force 09.03.2007]

 (3) The procedure for determining the amount of heat used illegally and the cost thereof shall be established by the Minister of Economic Affairs and Communications.
[RT I 2007, 17, 80 - entry into force 09.03.2007]

§ 17.  Interruption and resumption of heat supply

 (1) In the case of danger to the life, health or property of persons or to the environment, a network operator is entitled to interrupt a network connection to the customer or another network operator without giving advance notice thereof.

 (2) A network operator is entitled to interrupt a network connection forthwith when it is established that illegal use of heat is taking place.
[RT I 2007, 17, 80 - entry into force 09.03.2007]

 (3) After giving at least seven days’ notice, a network operator is entitled to interrupt the supply of heat in the following cases:
 1) the customer has transgressed the rights granted to him or her in the conditions of connection or has failed to perform his or her obligations under those conditions;
 2) the network operator encounters an obstacle in accessing, for the purpose of inspecting or replacing any metering systems located on, or performing any other work on, the premises owned or occupied by the customer or another heating undertaking;
 3) the customer’s or heating undertaking’s payments for heat are in arrears.

 (4) Before the supply of heat is interrupted in the cases provided in subsection 3 of this section, the network operator shall give the customer or another heating undertaking reasonable time to cure the defects and shall caution the customer or another heating undertaking in writing of the possibility of interruption if the defects are not cured. The notice shall set out:
 1) the reason for interruption of the supply of heat;
 2) the time-limit for curing the defects.

 (41) If a customer has failed to pay the amount due according to the contract entered into with the network operator, the supply of heat required for heating a dwelling may be interrupted during the period from 1 October to 30 April only when 90 days have passed since receipt of the notice specified in subsection 4 of this section and the customer has failed, during this period, to cure the defect which constitutes the basis for interruption of the supply of heat.
[RT I 2010, 35, 192 - entry into force 08.07.2010]

 (5) A network connection and heat supply interrupted for the reasons provided in subsection 3 of this section shall be restored, provided the contract has not been terminated, after the reason for the interruption has been eliminated and the customer or another heating undertaking has paid the justified costs of interruption and reconnection.

Chapter 4 OPERATION ON THE BASIS OF ACTIVITY LICENCE  

§ 18.  Granting the right to operate

 (1) An activity licence granted by the Competition Authority to an undertaking constitutes authorisation to operate in an area of activity specified in subsection 2 of this section. An undertaking may hold several activity licences.
[RT I 2007, 66, 408 - entry into force 01.01.2008]

 (2) An activity licence is required in the following areas of activity:
 1) the production of heat if the estimated annual production volume exceeds 50,000 MWh per undertaking or if the undertaking produces heat in the process of combined generation of heat and power;
 2) the distribution of heat if the estimated annual distribution volume exceeds 50,000 MWh per undertaking;
 3) the sale of heat if the estimated annual volume of sales exceeds 50,000 MWh per undertaking;
[RT I 2010, 56, 363 - entry into force 01.11.2010]
 4) the sale of heat if the heating undertaking is part of a group and the combined annual heat sales of the group in Estonia to persons who are not part of the group exceeds 50,000 MWh;
[RT I 2010, 56, 363 - entry into force 01.11.2010]
 5) the sale of heat if the heating undertaking produces heat in the process of combined generation of heat and power.
[RT I 2010, 56, 363 - entry into force 01.11.2010]

 (3) A person who sells heat solely to its members, commercial lessees or tenants does not need to apply for an activity licence specified in subsection 2 of this section provided that the sale of heat is not the principal activity of the person and that heat is sold only within one immovable, or within a construction work which is a movable and within the land necessary for servicing that construction work.

 (4) An activity licence cannot be transferred to another undertaking.

 (5) A state fee for the licence and for any amendment of the licence at the initiative of the holder of the licence, except for an amendment of information referred to in points 1, 2 and 6 of section 20(1) of this Act, shall be paid pursuant to the procedure and according to the rate provided in the State Fees Act.
[RT I 2006, 58, 439 - entry into force 01.01.2007]

§ 19.  Requirements in respect of company type and share capital

 (1) A private limited company or public limited company which has been entered in the Commercial Register or which is in the process of being incorporated may apply for an activity licence to operate in an area of activity specified in section 18(2) of this Act, provided that the company possesses the technical capability and employs personnel with the requisite skills for pursuing the activity stated in the application and provided that its operations comply with environmental protection and occupational safety requirements and other requirements prescribed by legislation.

 (2) The share capital of a heating undertaking which sells over 50,000 MWh of heat per year must amount at least to 31,950 euros.
[RT I 2010, 22, 108 - entry into force 01.01.2011]

§ 20.  Application for activity licence

 (1) In order to obtain an activity licence, the undertaking which seeks an activity licence (hereinafter ‘applicant’) shall submit to the Competition Authority an application which contains the following information:
[RT I 2007, 66, 408 - entry into force 01.01.2008]
 1) the name of the undertaking;
 2) the address of the seat of business and the number of a means of telecommunication of the undertaking;
 3) the registration number in the Commercial Register, except for the case in which the company is in the process of being incorporated;
 4) the licensed territory applied for;
 5) t he activity provided in section 18(2) of this Act in respect of which the application for activity licence has been submitted, and a description of the planned activity;
 6) the date of submission of the application for activity licence, and the name, position title and number of the means of telecommunication of the person who signed the application.

 (2) The applicant shall annex the following to the application specified in subsection 1 of this section:
 1) layout plans and description of the networks located within the licensed territory;
 2) information showing compliance of the applicant and of the activity applied for with the conditions and requirements provided in this Act and in legislation enacted on its basis.

 (3) If the Competition Authority so requires, the applicant must provide evidence concerning compliance of the applicant and the activity applied for with the conditions and requirements provided in this Act and the legislation established on its basis.
[RT I 2007, 66, 408 - entry into force 01.01.2008]

§ 21.  Decision on issue of activity licence

 (1) The Competition Authority shall decide to issue or refuse to issue an activity licence on the basis of the application submitted by the applicant and of any additional information annexed to the application at the request of the Competition Authority, and shall base its decision on the provisions of this Act and the legislation enacted on its basis in accordance with the principles of objectivity, transparency and equal treatment.
[RT I 2007, 66, 408 - entry into force 01.01.2008]

 (2) The Competition Authority shall make a reasoned decision in respect of issuing or refusing to issue an activity licence within sixty days as of receipt of the corresponding application drawn up in compliance with the requirements of this Act, and of all documents that must be annexed thereto as well as of any additional information which the Competition Authority may require the applicant to submit pursuant to this Act.
[RT I 2007, 66, 408 - entry into force 01.01.2008]

 (3) An applicant for an activity licence shall be notified of the decision on issue of the activity licence within three working days from the making of the decision.

 (4) The Competition Authority shall enter the particulars specified in section 23(1) of this Act in the Register of Economic Activities (hereinafter, ‘the register’) within three working days as of the date on which the relevant decision is made. The publication of this information is subject to the provisions of the Register of Economic Activities Act.
[RT I 2007, 66, 408 - entry into force 01.01.2008]

§ 22.  Refusal to issue activity licence

 (1) The Competition Authority may refuse to issue the activity licence if:
[RT I 2007, 66, 408 - entry into force 01.01.2008]
 1) the applicant fails to submit the information required pursuant to this Act, or submits misleading or inaccurate information or false documents;
 2) the applicant does not meet the requirements established for undertakings in this Act or in the legislation enacted on its basis, or lacks the required economic and organisational prerequisites and conditions to engage in the activity in respect of which the applicant seeks an activity licence;
 3) the activity specified in the application is not in accordance with the requirements of this Act or the legislation enacted on its basis;
 4) there is a reasonable cause to doubt whether the applicant will be able to perform the obligations provided in legislation or to meet the conditions established in the activity licence;
 5) the issue of an activity licence would be in conflict with the objectives established in this Act;
 6) another activity licence previously issued to the applicant pursuant to this Act has been revoked for a reason other than that provided in section 26(2) of this Act within a period of three years prior to submission of the application for a new activity licence;
 7) the applicant has been convicted of operating without an activity licence in a field of activity for which an activity licence is required pursuant to this Act and the terms specified in section 25 of the Punishment Register Act have not expired;
 8) compulsory dissolution has been imposed on the applicant for an offence and a court judgment to this effect has become final;
 9) the state fee payable by the applicant for the issue of the activity licence has not been paid.

 (2) A reasoned written notice concerning refusal to issue the activity licence shall be sent to the applicant within three working days as of the date on which the corresponding decision is made.

 (3) Before deciding to refuse to issue an activity licence, the Competition Authority shall grant the applicant reasonable time to eliminate any circumstances which prevent issue of the licence. The Competition Authority shall inform the applicant of the grant of further time, and shall identify the circumstances that prevent issue of the licence and shall set a date by which they must be eliminated.
[RT I 2007, 66, 408 - entry into force 01.01.2008]

§ 23.  Information set out in activity licence and conditions of activity licence

 (1) The decision to issue an activity licence shall contain at least the following particulars:
 1) the date of issue of the activity licence;
 2) the business name, registration number in the Commercial Register, the address of the seat of business and the number of the means of telecommunication of the recipient of the activity licence;
 3) the area of activity provided in section 18(2) of this Act for which the activity licence is issued;
 4) the licensed territory,
 5) the conditions of the activity licence.

 (2) The conditions of an activity licence established by the Competition Authority in its decision to issue the activity licence which the undertaking holding the activity licence is obligated to observe constitute an integral part of the activity licence.
[RT I 2007, 66, 408 - entry into force 01.01.2008]

 (3) The decision to issue an activity licence shall set out the following;
 1) the development obligation in accordance with section 14 of this Act;
 2) other conditions, if this is necessary in order to ensure security of supply or the performance of obligations or in order to achieve any objectives arising from this Act or the legislation enacted on its basis or in order to take into consideration the particular character of a specific activity.

 (4) The conditions of an activity licence shall enter into force together with the activity licence or on a date established by the Competition Authority.
[RT I 2007, 66, 408 - entry into force 01.01.2008]

 (5) An undertaking which is unable, for any reason, to comply with the conditions of the activity licence or to perform the obligations provided in this Act must immediately give written notice thereof to the Competition Authority, identifying the conditions which it is unable to comply with or the duties or obligations which it is unable to perform and the reasons that underlie its inability to do so, and, if possible, shall request that the conditions of the activity licence be amended.
[RT I 2007, 66, 408 - entry into force 01.01.2008]

§ 24.  Amending information entered in the activity licence and the licence conditions

 (1) An undertaking is required to inform the Competition Authority immediately of any changes to the information specified in section 23(1) of this Act.
[RT I 2007, 66, 408 - entry into force 01.01.2008]

 (2) The Competition Authority may amend the licence conditions or add new conditions after it has issued the activity licence on the basis of a reasoned written request by the corresponding heating undertaking, observing the provisions of this Act and the principles of equal treatment and free competition.
[RT I 2007, 66, 408 - entry into force 01.01.2008]

 (3) The Competition Authority shall enter updated information in the register within three working days from receipt of such information.
[RT I 2007, 66, 408 - entry into force 01.01.2008]

§ 25.  Validity of activity licence

 (1) An activity licence enters into force on the day following the day on which the decision to issue the activity licence is made or on the date provided in the decision. An activity licence issued to a company which is in the process of being incorporated enters into force on the date on which the applicant is entered in the Commercial Register or on the day following the day on which the decision to issue the activity licence is made, whichever is the later.

 (2) An activity licence expires in the case of:
 1) revocation of the activity licence;
 2) dissolution of the holder of the licence.

 (3) An activity licence does not expire upon the merger, division or reorganisation of the heating undertaking.

 (4) In the event of a merger, the activity licence issued pursuant to this Act to the company being acquired remains valid and continues to have the same conditions with regard to the new company, and is deemed to be the activity licence of the acquiring company. In the event of a merger as a result of which a new company is incorporated, the activity licence issued pursuant to this Act to the merging company remains valid and continues to have the same conditions with regard to the new company, and is deemed to be the activity licence of the company in the process of being incorporated.

 (5) In the event of division, the activity licence issued pursuant to this Act to the company which is being divided remains valid and continues to have the same conditions with regard to the new company, and is deemed to be the activity licence of the recipient company insofar as the assets transferred to the recipient company are used for the activity conducted on the basis of the activity licence. If necessary, the company being divided and the recipient company must request amendment of the conditions of the activity licence.

 (6) In the event of reorganisation, the activity licence issued pursuant to this Act to the company being reorganised remains valid and continues to have the same conditions with regard to the new company, and is deemed to be the activity licence of the new company.

 (7) In the cases specified in subsections 4–6 of this section, the Competition Authority shall at the request of the former or the new holder of the activity licence make a decision by which the information entered in the corresponding activity licence is updated and the licence conditions are amended.
[RT I 2007, 66, 408 - entry into force 01.01.2008]

 (8) The provisions of subsections 4–6 of this section do not affect the right of the Competition Authority to revoke activity licences on the grounds provided in this Act.
[RT I 2007, 66, 408 - entry into force 01.01.2008]

§ 26.  Revocation of activity licence

 (1) The Competition Authority may revoke an activity licence if:
[RT I 2007, 66, 408 – entry into force 01.01.2008]:
 1) it becomes evident that, upon applying for the activity licence, the applicant knowingly submitted misleading or inaccurate information or false documents;
 2) it becomes evident that the holder of the activity licence does not meet the requirements established for heating undertakings by this Act or the legislation enacted on its basis, or lacks the required economic and organisational prerequisites and conditions for the activity for which the activity licence has been granted;
 3) the activity of the holder of the activity licence does not comply with the requirements provided in this Act or the legislation enacted on its basis;
 4) the holder of the activity licence fails to perform the obligations provided in this Act or the legislation enacted on its basis, or fails to fulfil the conditions of the activity licence;
 5) the holder of the activity licence unlawfully transfers rights arising from the activity licence to a third party;
 6) compulsory dissolution has been imposed on the holder of the licence as a result of its having committed an offence and a court judgment to this effect has become final;
 7) the holder of the activity licence has repeatedly violated tax laws;
 8) it becomes evident that circumstances exist which, pursuant to this Act, constitute grounds for refusal to grant an activity licence;
 9) the holder of the activity licence has not commenced the activity specified in the activity licence within twelve months as of the issue of the activity licence, or has terminated such an activity during the term of validity of the activity licence.

 (2) The Competition Authority may revoke an activity licence at the request of the holder of the activity licence, unless otherwise provided in this Act.
[RT I 2007, 66, 408 - entry into force 01.01.2008]

 (3) If the circumstances underlying the revocation of an activity licence as provided in subsection 1 of this section can be eliminated, the Competition Authority shall grant the holder of the licence reasonable time to eliminate the circumstances underlying the revocation.
[RT I 2007, 66, 408 - entry into force 01.01.2008]

 (4) The Competition Authority shall communicate the decision to revoke an activity licence to the holder of the activity licence and remove the corresponding information concerning the undertaking from the register within three working days after the date on which the decision to revoke the activity licence was made.
[RT I 2007, 66, 408 - entry into force 01.01.2008]

§ 27.  Obligation to continue activity

 (1) If an activity licence expires or the Competition Authority revokes an activity licence, the Competition Authority shall, where necessary, decide on the measures which must be applied in order to ensure continuation of the activity carried out on the basis of the activity licence and the preservation of the assets needed to continue such activity.
[RT I 2007, 66, 408 - entry into force 01.01.2008]

 (2) Upon expiry of an activity licence or in the event of revocation of an activity licence, the holder of the activity licence shall, if the Competition Authority so requires, continue to perform the obligations arising from legislation and the licence conditions for a period of time determined by the Competition Authority.
[RT I 2007, 66, 408 - entry into force 01.01.2008]

Chapter 5 SUPERVISON  

§ 28.  Supervisory authority

 (1) Within the purview of its competence, the Competition Authority shall exercise supervision of compliance with the requirements provided in this Act and in legislation enacted on its basis.
[RT I 2010, 56, 363 - entry into force 01.11.2010]

 (2) The supervisory authority shall use the information at its disposal solely for the performance of duties arising from this Act.

§ 29.  Rights of supervisory authority

  In order to perform its functions, the supervisory authority is entitled to:
 1) obtain any information which is necessary for performing the duties provided in this Act and the legislation enacted on its basis from the heating undertaking and from an agency of the government or of a local authority;
 2) enter, for the purpose of on-site inspection, any premises, rooms and civil engineering works of the heating undertaking in the presence of a representative of the undertaking and, in the course of the inspection, to examine any documents, other information and circumstances which are needed for the performance of supervision and to make extracts, transcripts and copies thereof;
 3) verify the accounts of the heating undertaking and obtain requisite information concerning its economic activities;
 4) verify, in the cases provided in this Act, the pricing practices applied by the heating undertaking;
 5) approve, in the cases and pursuant to the procedure provided in this Act, maximum prices for heat;
 6) verify whether state fees have been paid for activity licences;
 7) issue enforcement orders and make decisions within the limits of its competence.

§ 30.  Enforcement orders and decisions

 (1) In order to put an end to a violation of the requirements set out in this Act or legislation enacted on its basis, a supervisory official shall issue an enforcement order which contains the following information:
 1) the person to whom the enforcement order is addressed;
 2) information concerning the circumstance which constitutes the subject matter of the enforcement order, a demand to discontinue the infringement and, if necessary, a demand to suspend in full or in part the activity related to the infringement;
 3) the term for complying with the enforcement order;
 4) a reference to the possibilities, procedure, place and time-limit for contesting the enforcement order;
 5) the date of issue of the enforcement order and the given name and surname, position, official title and signature of the person who issued the enforcement order.

 (2) If the register contains an entry in respect of the undertaking which received the enforcement order, information concerning the enforcement order shall be entered in the register promptly.

 (3) In the event of repeated failure to comply with an enforcement order, the Competition Authority is entitled to issue a decision which documents the repeated failure to comply with the enforcement order and which constitutes the basis for revocation of the activity licence of the undertaking.
[RT I 2007, 66, 408 - entry into force 01.01.2008]

 (4) The decision specified in subsection 3 of this section shall set out:
 1) the date and place of making the decision;
 2) the content of the decision;
 3) the basis for the decision;
 4) the given name, surname and position title of the official who made the decision;
 5) a note concerning the possibility, time-limit and procedure for contesting the decision.

 (5) If a decision specified in subsection 3 of this section is not contested, information concerning the decision shall be entered in the register without delay upon the expiry of the term for contesting the decision, and if the decision is contested, information concerning the decision shall be entered in the register on the day that the court judgment upholding the contested decision becomes final.

 (6) In the event of failure to comply with an enforcement order referred to in subsection 1 of this section, a supervisory official may impose a coercive measure pursuant to the procedure provided in the Substitutive Enforcement and Penalty Payments Act before passing the decision referred to in subsection 3. The maximum rate of the penalty payment is 1300 euros.
[RT I 2010, 22, 108 - entry into force 01.01.2011]

§ 31.  Expropriation

 (1) In addition to applying the principles provided in section 3(1) of the Immovables Expropriation Act, the Competition Authority is entitled to call for:
[RT I 2010, 56, 363 - entry into force 01.11.2010]
 1) expropriation of the assets of the holder of an activity licence which the holder uses for the activity specified in the activity licence, if the holder of the licence fails to perform the obligation provided in section 27(2) of this Act;
 2) expropriation of the assets of the holder of an activity licence which the holder uses for the activity specified in the activity licence, if the term of validity of the activity licence has expired or the activity licence has been revoked and if there is no guarantee that the activity based on those assets will continue in compliance with this Act, which may jeopardise the security of supply;
 3) expropriation of the network and any limited real right which makes it possible to use the network if the owner of the network does not perform the obligations provided in section 14 of this Act or if the network operator who is the owner or user of the network does not hold an activity licence which is in conformity with the requirements of this Act.

 (2) The Competition Authority may call for expropriation on the grounds provided in subsection 1 of this section only if it has given advance notice to the owner of the assets which are the subject matter of the intended expropriation of its intention to call for expropriation and if the owner of the assets has failed to eliminate the circumstance that constitutes the ground for the expropriation within a reasonable term set by the Competition Authority.
[RT I 2010, 56, 363 - entry into force 01.11.2010]

 (3) The Competition Authority is not subject to the obligation prescribed in subsection 2 of this section in cases where performing the obligation may jeopardise security of supply.
[RT I 2010, 56, 363 - entry into force 01.11.2010]

 (4) Expropriations shall be effected pursuant to the Immovables Expropriation Act.

§ 32.  Resolution of disputes

 (1) In the event of a dispute arising on the basis of section 5 of this Act, the Competition Authority shall be required to present its reasoned opinion in the matter if the heating undertaking or municipal or city administration so requests.
[RT I 2010, 56, 363 - entry into force 01.11.2010]

 (2) The opinion specified in subsection 1 of this section shall be presented in writing within thirty days. If the matter is particularly complex, the Competition Authority may extend the term for presenting the opinion to a maximum of ninety days and shall inform the applicant thereof in writing.
[RT I 2007, 66, 408 - entry into force 01.01.2008]

 (3) The term specified in subsection 2 of this section is suspended by operation of law until such time as the information which was required by the Competition Authority and which is necessary for presentation of a reasoned opinion has been submitted to the Competition Authority.
[RT I 2007, 66, 408 - entry into force 01.01.2008]

 (4) When it determines an application specified in subsection 1 of this section, the Competition Authority may make a proposal to the municipal or city administration to amend a decision specified in subsections 5(6) of this Act.
[RT I 2010, 56, 363 - entry into force 01.11.2010]

Chapter 6 LIABILITY 

§ 33.  Failure to give notice of changes in particulars

  Failure by a legal person to inform the Competition Authority of any changes in the particulars required in this Act is punishable by a fine of up to 2000 euros.
[RT I 2010, 22, 108 - entry into force 01.01.2011]

§ 34.  Failure to comply with conditions of activity licence

  Failure by a legal person to comply with the conditions of its activity licence is punishable by a fine of up to 3200 euros.
[RT I 2010, 22, 108 - entry into force 01.01.2011]

§ 35.  Sale of heat at unapproved maximum prices or at prices exceeding approved maximum prices

  The sale of heat by a legal person at unapproved maximum prices or at prices exceeding the approved maximum prices, where approval of maximum prices is required pursuant to this Act, is punishable by a fine of up to 32,000 euros.
[RT I 2010, 56, 363 - entry into force 01.11.2010]

§ 351.  Failure to apply for approval of a new maximum price

  Failure by a legal person to apply for approval of a new maximum price as required in section 9(91) of this Act is punishable by a fine of up to 32,000 euros.
[RT I 2010, 56, 363 - entry into force 01.11.2010]

§ 36.  Violation of obligation to connect to network and the charging of unjustified connection fees

  Violation of the obligation to connect to a network a consumer installation which is within the licensed territory of a network operator and which conforms to the requirements established in this Act and other legislation, or the charging of unjustified connection fees is punishable by a fine of up to 3200 euros.
[RT I 2010, 22, 108 - entry into force 01.01.2011]

§ 37.  Proceedings

 (1) The provisions of the General Part of the Penal Code and the Code of Misdemeanour Procedure shall apply to the misdemeanours provided in ss. 33–36 of this Act.

 (2) Extra-judicial proceedings concerning the misdemeanours provided in ss. 33–36 of this Act shall be conducted by the Competition Authority.
[RT I 2007, 66, 408 - entry into force 01.01.2008]

 (3) [Repealed – RT I 2010, 56, 363 – entry into force 01.11.2010]

§ 38.  Payment of fines

 (1) Fines imposed pursuant to ss. 33–36 of this Act shall be paid into the national budget.
[RT I 2010, 56, 363 - entry into force 01.11.2010]

 (2) [Repealed – RT I 2010, 56, 363 – entry into force 01.11.2010]

Chapter 7 IMPLEMENTING PROVISIONS 

§ 39.  Term of agreement entered into with the government on the basis of the Energy Act

  An agreement entered into between an undertaking and the government pursuant to the Energy Act remains in force until the date specified in the market licence.

§ 40.  Validity of market licence

 (1) A market licence issued pursuant to the Energy Act is valid until the date specified in the market licence.

 (2) Within one year as of the entry into force of this Act, the Competition Authority shall enter valid market licences issued before the entry into force of this Act in the national register of undertakings operating in areas of activity subject to special requirements.
[RT I 2007, 66, 408 - entry into force 01.01.2008]

§ 41.  Bringing the activity of an undertaking into compliance with requirements provided in this Act

 (1) Heating undertakings which operated on the basis of the Energy Act prior to the entry into force of this Act shall bring their activity into compliance with the requirements provided in this Act within one year after the entry into force of this Act.

 (2) Upon the entry into force of this Act, the maximum price for heat for which a heating undertaking has obtained approval on the basis of the Energy Act shall be deemed to be the maximum price for which heat is to be sold by that heating undertaking.

§ 411.  Use of reserve fuel for production of heat

  A heating undertaking specified in section 7(3) of this Act shall, by 1 July 2008, provide for the possibility of using reserve fuel for the production of heat.
[RT I 2007, 17, 80 - entry into force 09.03.2007]

§ 42.  [Omitted from this version]

§ 43.  Entry into force of this Act

  This Act enters into force on 1 July 2003.