DISTRICT HEATING ACT

Translation from Estonian into English

Chapter 1
GENERAL PROVISIONS
§ 1. Scope of application of Act
1) This Act regulates activities related to production, distribution and sale of heat within district heating network (hereinafter network), and connection to the network.
2) The activities named in subsection 1 of this section shall be co-ordinated and shall conform to the principles of objectivity, equal treatment and transparency to ensure sound, prudent, effective heat supply with a reasoned price complying with environmental requirements and the customers’ needs.
3) The provisions of the Administrative Procedure Act (RT I 2001, 58, 354; 2002, 53,336; 61, 375) apply to the administrative procedure prescribed in this Act, taking into consideration the specifications arising from this Act.
§ 2. Definitions
For the purposes of this Act, the following definitions are used:
1) District heating is production of heat and its distribution through network with the aim of supplying customers by means of district heating system;
2) District heating system is a technical system of production, distribution and consumption of heat, formed of technical means for production, distribution and consumption of heat and the buildings related to them;
3) Network is an operational assembly of ducts, facilities, auxiliary equipment and permanent buildings related to them, or a part of it, necessary for distribution of heat. For the purposes of this Act, consumer installations are not part of the network;
4) Consumer installation is an operational assembly for supply of the customers with heat, which is linked or being linked together with interconnected heat ducts and the network of auxiliary equipment, and is built on a registered immovable, in a building or in a functionally related complex of buildings, which forms a single business entity, and on the land used for servicing them.
5) Supply point is the connection point of the network and the consumer installation;
6) The boundary of network services is the boundary up to which the network operator administers the district heating system on the basis of contract;
7) Network region is a territory in which the network in the ownership or possession of a network operator is located or is being developed;
8) Territory of activity is an area specified by the activity licence within which a heat operator operates;
9) Consumer is a person who buys the heat distributed through the network;
10) Network operator is an undertaking who uses the network for distribution of heat;
11) Connection is connecting of a consumer installation to the network.

§ 3. Specific research programme for energy conservation

The Government of the Republic shall confirm a specific research programme and the operational programme for the specific research programme in order to raise effectiveness in the use of energy, preserve the quality of environment and rationally use the natural resources.

Chapter 2

ORGANISATION OF DISTRICT HEATING

§ 4 Heat operator
Heat operator is an undertaking operating within at least one area of activity among heat production, distribution or sale, and is responsible for solving the commercial, technical or maintenance problems related to these activities.

§ 5 District heating region

(1) District heating region is a territory specified by the comprehensive plan, where district heating is used for supply of heat for consumer installations in order to ensure sound, prudent, effective heat supply with a reasoned price complying with environmental requirements and the customers’ needs.
(2) A local government council has the right to designate a district heating region within the area of its administrative territory. The decision on designation of the district heating region shall be guided by the principles provided in subsection 1 of this section.
(3) Persons not using district heating at the time of designation of the district heating region are not obliged to get connected to the network.
(4) Within a district heating region, ways different from district heating under the conditions and pursuant to the procedure prescribed by a local government council may be used for disconnection of the connected consumer installations from the network and for suppliance of a building with heat at the stage of being built or re-constructed.
(5) The possibilities for organisation of heat supply must be analysed before designation of district heating region at a territory planned for new structures of high density, guided by the principles provided in subsection 1 of this section. When a district heating region is designated at a territory planned for new structures of high density, connection to the network is compulsory for all persons located in the district heating region, unless otherwise prescribed by the local government council.
(6) The resolution of a local government council on designation of district heating region provides:
1) the boundaries of a district heating region;
2) the conditions and the procedure for connection with and for separation from the network, taking into consideration the provisions of subsections 4 and 5 of this section.;
3) the general quality requirements for district heating;
4) the procedure for approval of the price limit for heat, guided by § 8 and § 9 of this act;
5) development obligation for the heat operator;
6) the term for validity of the conditions, requirements and procedure.
(7) The conditions, requirements and procedure prescribed on the basis of subsection 6 of this section, except the procedure for approval of the price limit for heat, shall be approved before their prescription with the heat operators acting in the district heating region.

§ 6 Heat production, distribution and sale

(1) For the purposes of this act, heat production is an activity, as a result of which the heat energy used in consumer installations is received.
(2) For the purposes of this act, heat distribution is transportation of heat through network to consumer installations.
(3) For the purposes of this act, heat sale is delivery of heat to consumers for or without charge.

§ 7 Obligations of heat operators

(1) Heat operator shall ensure suppliance of heat for consumers and other heat operators in accordance with this act, the conditions of activity licence and the concluded contract.
(2) In the accounting, a heat operator shall keep separate account on heat production, distribution and sale and on the areas of activity not related to the previously named activities.

§ 8 Heat sale and price formation

(1) A consumer buys heat from the network operator, to whose network the consumer installation in his or her possession is connected.
(2) Within his network region, a network operator is obliged to sell heat according to the technical capability of the network, to all the consumers having network connection.
(3) The price limit for heat shall be established in a manner which ensures:
1) coverage of expenses for the necessary operating costs, including costs for heat production, distribution and sale;

2. investments for performance of activity and fulfilment of development obligations;
3. compliance with environmental protection requirements;
4. compliance with quality and safety requirements;
5. justified profitability.
   (4) A heat operator shall make the price limit of heat public within his network region not later than three months prior to entry into force thereof.

§ 9 Approval of heat price

(1) The price limit for sale of heat shall be approved with the Energy Market Inspectorate separately for each network region by:
1) heat operators, who sell heat in the region more than 50 000 MWh in a year;
2) heat operators who are members of a group of undertakings in the condition that the total amount of heat sold to persons in Estonia, who do not belong to the group, is more than 50 000 MWh in a year;
3) heat operators who produce heat in the process of co-production of electricity and heat.
(2) If an undertaking who belongs to a group is sharing participation in another heat operator, a part of this heat operator’s total sale is subsumed into the group’s total heat sale, proportionally to the participation of the undertaking belonging to the group of this heat operator.
(3) For an heat operator not mentioned in subsection 1 of this section, a local government council may, pursuant to the requirements of this chapter, make arrangements to approve the price limit of the heat sold within its administrative region. The price limit shall be approved by a rural municipality or city government.
A local government has the same rights and obligations for approval of the price limit as the inspectorate.
(4) An heat operator, who is obliged to approve the price limit for heat, has the right to sell heat at a price not exceeding the approved price limit.
(5) The Inspectorate shall make the decision on approval of the named price limits within 30 days from the submission of a duly prepared price request. When proceeding an extremely difficult or labour intensive request on approval, the inspectorate may prolongate this term up to 60 days, informing the author of the request on prolongation of the term before expiration of the original term.
(6) At the request of the inspectorate, the heat seller shall explain and justify the basis of formation of price limits.
(7) The term for proceeding of the request for approval of price limit specified in subsection 4 of this section will suspend, if the information necessary for approval of the price request required by the inspectorate has not been PUBLISHED.
(8) A heat operator specified in subsection 1 of this section, applying for approval of the price limit, shall permit inspection of its accounting and provide necessary explanations regarding its business activities.
(9) The inspectorate has the right to ask for additional data from heat operators or state agencies or local government agencies, if these are necessary for making decision on approval of the price limit, or for checking the data PUBLISHED.
(10) A heat operator may apply for approval of the price formula from the inspectorate or the rural municipality or the city government for up to three years.
The price formula is used for approval of the price limit for heat at the request of a heat operator, in case such circumstances appear which affect
the price of heat. The inspectorate or a rural municipality or a city council make the decision on the request for approval of the price limit on the basis of price formula within ten working days from the day of receipt of an
appropriate request.
(11) The inspectorate has no right to disclose the information received in connection with approval of the price limit to the third persons unless in cases prescribed by law, or in case transmission of the information is necessary for fulfilment of obligations prescribed by this law.

Chapter 3

NETWORK OPERATION

§ 10 Connection to network

(1) Within the technical possibilities, a network operator is obliged to connect the consumer installations of all customers (hereinafter connected party) residing in the network operator’s network region, who have PUBLISHED the applications for connection, to the network, unless the reliability of supply of the earlier connected parties is not endangered.
(2) A network operator must explain the reason for refusal of granting the application for connection in written form within 30 days from getting the application.
(3) A network operator issues the conditions for connection to the network (hereinafter conditions for connection) on the basis of application of a connected party.
(4) The conditions for connection shall:
1) be transparent and uniquely understandable;
2) adhere to the principle of equal treatment of similar connected parties;
3) consider the technical and economic conditions of a special connection;
4) consider the interests of development and stability of the network;
5) consider the technical possibilities of the network.
(5) The conditions for connection shall specify:
1) the supply point;
2) the location of the measurement system;
3) the service boundary of the network;
4) the obligations of the connected party and the network operator;
5) the estimation statement of the connection fee;
6) the period of validity of the conditions for connection;
7) other special conditions.
(6) For the purposes of this act, changing of a consumer installation or any parts of it, or changing of its owner or possessor is not considered connection to the network and the owner or possessor must not pay the connection fee, if at the same time the following conditions are fulfilled:
1) the location of the supply point does not change;
2) changing of the technical conditions is not applied for;
3) the technical possibilities for connection of the connecting party’s consumer installation have remained the same.

§ 11 Conclusion of contract for connection to network

(1) For connection to network, a subscription contract (hereinafter contract ) is concluded in a written form by a network operator and the owner or possessor of the consumer installation being connected to the network.
(2) Among the rest, the following is determined by the contract:
1) the supply point;
2) the location of the measurement system
3) the service boundary of the network;
4) the amount of the connection fee;
5) the technical conditions for connection;
6) the term for performance of the contract.
(3) The Inspectorate has the right to supervise the justification of the activities of a heat operator specified in subsection 9 (1) of this Act, and the local government has the right to supervise the validity of the activities of other heat operators regarding their refusal to satisfy the application for connection, determination of the connection fee and establishment of the contractual conditions.
(4) The contract specified in subsection 1 of this section is the basis for conclusion of heat purchase and sale contract.

§ 12 Calculation of connection fee

(1) Network operators have the right to collect, from connected parties, justified connection charges.
(2) Connection charge is calculated in a manner which ensures the necessary:
1) coverage of the investments;

2. compliance with environmental protection requirements;
3. compliance with quality and safety requirements;
4. justified profitability
   for a special connection.
   (3) A network operator calculates the amount of the connection charge.
   (4) In case the network operator initiates changing the contractual technical conditions of connection, the network operator shall pay the costs.
   (5) A network operate has the right to collect a justified charge for changing the technical conditions of heat consumption taking place on the initiative of a consumer.
   § 13 Network region of a network operator
   (1) A network operator shall specify his network region and ensure the accessibility to the network location plan and description for all the persons interested.
   (2) A network operator may have several licensed network regions, which all together form the network region of the network operator.
   (3) Network regions of different network operators may cover with each other.

§ 14 Obligations of a network operator
(1) A network operator is obliged to ensure supply of the consumers having network connection in accordance with this Act, the conditions of the activity licence or the regulations of the local government council and the concluded contract.
(2) A network operator shall assume responsibility for operation and the order of network in his ownership or possession.
(3) A network operator is obliged to develop the network in a manner, which ensures connection of the consumer installations locating in the network region of a network operator, to the network.
(4) Unless agreed otherwise, a network operator is obliged to organise measuring of the amount of heat consumed through the network and keep account according to that.
(5) A network operator is obliged to give necessary information to all the other network operators of the region to ensure distribution and sale of heat in a manner concordant with secure and effective use of the network.
(6) A network operator may terminate the activity only after having transferred the obligations provided for by this section to another undertaking.
(7) A network operator shall inform the inspectorate in written form about the termination date and plan at least 12 months before termination of the activity, and submit a sufficient survey of the measures to ensure fulfilment of the requirements set in this section.
§ 15 Measurement and installation of measuring systems
(1) A network operator shall ensure fixing of all the amounts of heat entering into and moving out from the network, collection of the measuring data and their processing.
(2) Unless otherwise provided by the contract, a network operator shall, at his own expense, install a heat measuring system according to the project and the necessary technical aids of the network in his possession.
(3) In case the consumer’s heat measuring system does not comply with the valid technical requirements, a network operator shall substitute it at his own expense, unless otherwise provided by the contract.
(4) In case a consumer wishes to change the power level of the consumer installation, a network operator shall replace or install the heat measuring system and the equipment limiting the usage capacity and the consumer covers the re-installation expenses.

§ 16 Unauthorised consumption
(1) Unauthorised consumption of heat is:

1. consumption concealing or reducing the actually consumed amount by damaging the measuring equipment, disfigurement of the reading, damaging the measuring system or the parts of it or damaging the closing indicator.
   2) Non-measured consumption from the network connection without the permission of the network operator;
   3) Consumption without a valid written purchase and sale contract.
   (2) A network operator has the right to charge a fee for unauthorised consumption of heat in up to the triple amount of the cost of the arbitrarily consumed amount of heat.
   (3) Minister of Economic Affairs and Communications shall establish the procedure for fixing of the amount of unauthorised consumption of heat and the cost of it.
   § 17 Disconnection and restoration of heat supply
   (1) A network operator has the right to disconnect a network connection to a customer or to another heat operator without giving prior notice, if there is danger to the life or health of persons or to property or the environment.
   (2) A network operator has the right to disconnect a network connection without delay from the moment of ascertaining unauthorised heat consumption.
   (3) A network operator has the right to disconnect the heat supply by giving written notice thereof at least seven days in advance if:
   1) the consumer has violated the rights given to him by the conditions for connection or has not fulfilled the obligations taken with these conditions;
   2) the network operator is prevented from accessing the measurement systems located within the territory in the ownership or possession of a consumer or another heat operator for the purpose of inspection or replacement of them or for performance of other network operations.
   3) the consumer or heat operator is in debt for the use of heat.
   (4) Before disconnecting the heat supply in the cases specified in subsection 3 of this section, a network operator is obliged to give a reasonable term to a consumer or another heat operator for removal of the shortage and warn him in written form, that in case of not removing the shortage, the network connection will be disconnected. The notice shall include:
   1) the reason for disconnection of heat supply;
   2) the term for removal of the shortage. (5)Network connection and heat supply disconnected for the reasons specified in subsection 3 of this section shall be restored after removal of the reason for disconnection and after a consumer or another heat operator has paid the reasoned disconnection and reconnection costs unless the contract has not been terminated.
   Chapter 4
   OPERATION ON THE BASIS OF ACTIVITY LICENCE
   § 18 Grant of the right for operation
   (1) Activity licence is the right given to an undertaking by the decision of the Energy Market Inspectorate, to operate in the area of activity specified in subsection 2 of this section. A business operator may hold several activity licences.
   (2) An activity licence is required for:
   1) production of heat, in case the foreseeable amount of heat exceeds
   50 000 MWh per one business operator or in case a business operator produces heat in the process of co-production of electricity and heat;
   2) distribution of heat, in case the foreseeable amount is bigger than
   50 000 MWh in a year per one business operator;
   3) sale of heat, if an heat operator complies with the conditions provided in subsection 9 (1) of this Act.

(3) A person selling heat only to his members, commercial lessees or tenants, do not need to apply for an activity licence provided in subsection 2 of this section, if this sale is not the principal activity of this person and if this sale takes place within one registered immovable or within a building as movable property and on the land necessary for its service.
(4) An activity licence cannot be transferred to another business operator.
(5) State fee is paid for an activity licence and for changing it, except when changing the data specified in clauses 20 (1) 1),2) and 6) of this Act.

§ 19 Requirements for form of operation and capital

(1) A public limited company or a private limited company entered in the commercial registry or in the process of being established, which has got the technical capability and personnel with the necessary skills for operation in the area of activity specified in the application, and whose activity complies with the environmental protection and occupational safety requirements and with requirements prescribed by other legislation, may apply for an activity licence for operation in the areas of activity specified in subsection 18 (2) of this Act.
(2) The minimum amount of share capital of an heat operator who sells more than
50 000 MWh heat in a year, must be at least 500 000 kroons.

§ 20 Application for activity licence

(1) For getting the activity licence, an undertaking (hereinafter applicant) applying for the activity licence shall submit an application to the inspectorate with the following data:
1) name of the business operator;
2) address of location of the undertaking and the telecommunication number;
3) the commercial registry code, except in case of a company being in the process of establishment;
4) the territory being applied for;
5) name of the activity provided by subsection 18 (2) of this Act, what the activity licence is applied for, and description of the planned activity;
6) date of submission of application for the activity licence, name of the signatory person of the application, the official title and the telecommunication number.

(2) Additionally to the application mentioned in subsection 1 of this section, an applicant shall submit:
1) a site plan and description of the network within the territory;
2) data confirming fulfilment of the conditions and requirements set for the applicant and for the activity being applied for, provided by this Act and other legislation enacted on its basis.
3) At the request of the inspectorate, an applicant shall prove fulfilment of the conditions and requirements set to the applicant and the activity being applied for, provided by this Act and other legislation enacted on its basis.

§ 21 Decision on issue of activity licence

(1) The inspectorate shall decide upon issue of an activity licence or refusal to issue on the basis of the application PUBLISHED by the applicant and on the basis of the data additionally PUBLISHED at the inspectorate’s request and added to the application, thereby guided by the principles provided in this Act and other legislation enacted on its basis, and the principles of objectivity, transparency and equal treatment.
(2) The inspectorate takes the motivated decision on issue or refusal of the activity licence within 60 days after submission of an application and all additional documents in compliance with the requirements of this Act and after submission of the data additionally required from the applicant by the inspectorate on the basis of this Act.
(3) The applicant shall be notified of the decision of issuance of the activity licence within three working days as of the date on which the decision is made.
(4) The inspectorate shall within three working days after the relevant decision, register the data provided in subsection 23 (1) of this Act into the state register of undertakings operating in areas of activity subject to special requirements (hereinafter register). The data shall be published on the register’s Internet website.

§ 22. Refusal to issue activity licence

(1) The inspectorate shall refuse to issue an activity licence if:
1) the applicant fails to submit data in compliance with the requirements of this Act or submits misleading or inaccurate information or falsified documents;
2) the applicant is not in compliance with the requirements for the undertaking established in this Act or legislation enacted on its basis, or the applicant fails to have the required economical and organisational preconditions and terms for the activity for which the activity licence is applied;
3) the activity stated in the application is not in compliance with the requirements established in this Act or legislation enacted on the basis thereof;
4) there is reason to doubt that the undertaking is not capable to perform obligations provided by legislation or conditions established by the activity licence;
5) issue of activity licence would be contradictory to the objectives pursuant to this Act;
6) any other activity licence issued earlier for the applicant pursuant to this Act has been declared invalid during three years before submission of application to issue activity licence on another basis than in subsection 26 (2) of this Act;
7) the applicant has been punished for operating in the area of activity for which on the basis of this Act an activity licence is requisite, and terms provided in section 25 of the Punishment Register Act (RT I 1997, 87, 1467; 2002, 82, 477) have not exceeded;
8) the applicant has been convicted to compulsory dissolution for any offence and relevant judgement has entered into force;
9) state fee for activity license has not been paid by the applicant.
(2) An applicant shall be notified of a refusal to issue an activity license in written motivated notice within three working days as of the date on which the corresponding decision is made.
(3) Before deciding on refusal to issue activity licence, the inspectorate shall give a reasonable due date to the applicant to withdraw the impediments. The inspectorate informs the applicant about the impediments and due date during which the applicant has to withdraw the impediments that hinder the issue of activity licence.

§ 23. Data of activity licence and terms and conditions of activity licence

(1) A decision to issue an activity licence has to include the following data among others:
1) date of issue of the activity licence;
2) the business name, registry code, address and telecommunications number of the licensee;
3) areas of activity provided in subsection 18 (2) of this Act for which the activity licence is issued;
4) the licensed territory;
5) terms and conditions of activity licence.
(2) The terms of an activity licence established by the inspectorate with the decision to issue an activity licence are part of the licence, and the licensee is responsible to comply with the terms.
(3) The decision to issue the activity licence shall include:
1) the development obligation in accordance with § 14 of this Act;
2) other terms if necessary to ensure the reliability of supply or fulfil obligations or guarantee achieving objectives pursuant to this Act or legislation enacted on its basis, or to consider the specific character of a specific activity.
(4) The terms of the activity licence enter into force with entry into force of the activity licence or with the term specified by the inspectorate.
(5) The undertaking who, by any reason, fails to comply with the terms of the activity licence or obligations provided by this Act, has to inform the inspectorate about it without delay in written form stating the reason why and which terms, duties or obligations he fails to comply and, if possible, has to apply for change of the terms of the activity licence.

§ 24. Change of data and terms of an activity licence

(1) The undertaking is obliged to notify the inspectorate without delay of change of data provided in subsection 23 (1) of this Act.
(2) The inspectorate has the right to change or add terms of the activity licence on the basis of a justified application of an undertaking, at the same time observing the provisions of this Act and the principles of equal treatment and free competition.
(3) The inspectorate enters the changed information into register within three working days as of the date on which the change is received.

§ 25. Validity of an activity licence

(1) The activity licence is valid as of the following day on which the decision to issue an activity licence is made or as of the term specified in the decision. An activity licence issued to a business company which is being founded shall be valid as of the date on which the applicant is entered in the commercial register or as of the following day on which the decision to issue an activity licence is made, depending on which of the dates is later.
(2) Validity of an activity licence expires with:
1) the revocation of the activity licence;
2) the termination of an undertaking holding the activity licence.
(3) Validity of the activity licence does not expire in the cases of merge, division or transformation of an heat operator.
(4) In the cases of merger the same activity licence with the same terms given on the basis of the present act to the company being acquired is valid for the acquiring company. In the process of merger when a new business company is founded, an activity licence issued on the basis of this Act to the company being acquired shall be valid with the same terms and conditions as the activity licence of the business company being founded.
(5) In the cases of division, the same activity licence with the same terms and conditions given on the basis of the present act to the company being divided, is valid for the recipient company to such an extent, as the property being transferred to the recipient company is used in the activity stated in the activity licence. If necessary, the company being divided and the recipient company shall apply for changing the terms and conditions of the activity licence.
(6) In the cases of transformation the same activity licence with the same terms and conditions given on the basis of the present Act to the company being transformed is valid for the new company.
(7) In the cases pursuant to subsections 4 - 6 of this section, the inspectorate shall make a decision to change the data and terms of an activity licence on the basis of an application of the previous or new licensee.
(8) Provisions prescribed in subsections 4 - 6 of this section shall not influence the right of the inspectorate to revoke the activity licence.

§ 26. Revocation of activity licence

(1) The inspection has the right to revoke an activity licence if:
1) the holder of the licence has consciously PUBLISHED misleading or inaccurate information or falsified documents when applying for a licence;
2) the holder of the licence is not in compliance with the requirements for the heat operator established in this Act or legislation enacted on the basis thereof, or the holder of the licence fails to have the required economical and organisational preconditions and terms for the activity which the activity licence was given for;
3) the licensee's activity is not in compliance with the requirements established in this Act or legislation enacted on the basis thereof;
4) the holder of the licence fails to perform the obligations provided by this Act or legislation enacted on its basis or the conditions of the activity licence;
5) the holder of the licence illegally authorises the rights provided for by the activity licence to the third persons;
6) the holder of the licence has been convicted to compulsory dissolution for any offence and the relevant judgement has entered into force;
7) the holder of the licence has repeatedly violated tax laws;
8) any circumstances appear that according to this Act serves as a basis for refusal to issue activity licence;
9) the holder of the licence fails to commence activity in the area specified in the licence within 12 months since issue of the licence or terminates the activity during the validity of the activity licence.
(2) The inspection may revoke the activity licence on the basis of the licensee’s application unless otherwise provided by this Act.
(3) If the circumstances being the basis for revocation of the activity licence provided in subsection (1) of this section can be withdrawn, the inspectorate gives to the licensee a reasonable term for withdrawal.
(4) The inspectorate makes an entry of the decision on revocation of the activity licence into the register within three working days as of the date on which the corresponding decision was made and imparts the activity licence to the holder.

§ 27. Obligation to proceed activity

(1) If the validity of the activity licence expires or if the Energy Market Inspectorate revokes the activity licence, the inspectorate shall decide in case of necessity, which measures to take to proceed the activity according to the activity licence and to preserve the property necessary for proceeding the activity.
(2) In case the validity of the activity licence expires or the licence is revoked, the holder of the licence has to proceed performing the obligations resulting from the legislation and terms of the activity licence upon the inspectorate’s demand during the period specified by the inspectorate.

Chapter 5

SUPERVISION

§ 28. Supervisory authorities

(1) The Energy Market Inspectorate and the rural municipality or city governments exercise supervision over the compliance with the requirements provided by this Act and other legislation enacted on its basis within the limits of their competence.
(2) The supervisory authority shall use the information available only for performing tasks provided for by this Act.

§ 29. Rights of the supervisory authority

In order to perform tasks the supervisory authority has the right to:
1) obtain information from heat operators and the state and local governmental authorities which is necessary for performance of the functions provided for in this Act and legislation established on the basis thereof;
2) enter, for on-the-spot inspection, the territory, the premises and establishments of a heat operator in the presence of its representative, access necessary documentation, other information and circumstances, and make extracts, transcripts and copies for the purposes of supervision;
3) review the accounting and obtain the necessary information about economic activity of the heat operator;
4) inspect the implemented pricing principles of an heat operator in the circumstances provided for by this Act;
5) approve the price limits of heat in cases and pursuant to the procedure provided by this Act;
6) check the payment of state fee for the activity licence;
7) issue precepts and make decisions within its competence.

§ 30. Precept and decision

(1) A supervisory official shall issue a precept for termination of violations of the requirements of this Act or legislation established on the basis thereof, and the precept shall contain the following data:
1) the person being issued a precept;
2) information on a circumstance being basis for the issued precept, demand to terminate the offence and when necessary demand that the activities related to the offence be suspended in part or in full;
3) the term for performing the precept;
4) a reference concerning the possibility of, the location, procedure and the term for contesting the precept;
5) the date when the precept is issued, the given name, surname, official title and signature of an official who issued the precept;
(2) If there is an entry in the register about the undertaking being issued a precept, the information on precept shall be entered into the register without delay.
(3) In the cases of repeated failure to comply with the precept, the inspectorate has the right to make a decision which fixes the fact of repeated failure and which is the basis for revoking the activity.
(4) A decision specified in subsection 3 of this section shall set out:
1) the date and place of the decision made;
2) the content of the decision;
3) legal basis for the decision;
4) the given name, surname and official title of an official making the decision;
5) a notation concerning the possibility of, the term and procedure for contesting the decision.
(5) The decision mentioned in subsection 3 of this section shall be entered into the register without delay once the term for contestation of the decision has passed, if the decision is not contested, or if the decision is contested, as of the date on which the court judgement to uphold the contested decision enters into force.
(6) In the event of failure to comply with a precept specified in subsection 1 of this section, the supervisory official may, before making the decision specified in subsection 3 of this section, impose a coercive measure pursuant to the procedure provided for in the Substitutive Enforcement and Penalty Payment Act (RT I 2001, 50, 283; 94, 580). The upper limit of penalty payment is 20 000 kroons.

§ 31. Expropriation

(1) Additionally to the provisions applied provided in subsection 3 (1) of the Immovables Expropriation Act (RT I 1995, 30, 380; 59, 1006; 2002, 47, 297; 61, 375) the inspectorate or a rural municipality government or a city government may apply for:
1) expropriation of the property used for activity enacted in the activity licence if the person acting on the basis of the activity licence fails to comply with the obligations provided in subsection 27 (2) of this Act;
2) expropriation of the property used for activity enacted in the activity licence if validity of the activity licence has been expired or the activity licence has been revoked and the activity based on that is not guaranteed according to this Act and may compromise the reliability of supply;
3) expropriation of restricted real rights which facilitate the network and its usage if the owner of the network fails to perform the obligations provided in section 14 of this Act or if the owner or operator of the network does not have an activity licence in accordance with this Act.
(2) The inspectorate or a rural municipality government or a city government may, on the basis provided for in subsection (1) of this section, apply for expropriation only in the cases the intention to apply for expropriation has been imparted to the owner of the assets under expropriation, and the owner of the assets has not removed the circumstances under expropriation during a reasonable term specified by the inspectorate.
(3) The inspectorate or a rural municipality government or a city government has no obligation prescribed by subsection 2 of this section if performing this obligation may compromise the reliability of supply.
(4) Expropriation is executed according to the Immovables Expropriation Act.

§ 32. Settlement of disputes

(1) In the case of disputes provided for in section 5 and subsection 9 (3) of this Act, the inspectorate is obliged to present a motivated opinion on the basis of the relevant application of a heat operator or a competent local authority.
(2) The opinion specified in subsection 1 of this section shall be PUBLISHED in written form within 30 days. If the case is especially complicated, the inspectorate may extend the term for presenting the opinion up to 90 days notifying the applicant in writing.
(3) The term specified in subsection 2 of this section shall suspend for the period when the inspectorate has not been PUBLISHED the required information necessary for providing a motivated opinion.
(4) In resolving the application specified in subsection 1 of this section the inspectorate may make a proposal to a rural municipality or city government to alter the decision provided for in subsections 5 (6) and 9 (3) of this Act.

Chapter 6

LIABILITY

§ 33. Failure to give notice of changes to information

Failure to give notice of changes to information to the Energy Market Inspectorate by a legal person, is punishable by a fine of up to 30 000 kroons.

§ 34. Failure to comply with terms of activity licence

Failure to comply with terms of activity licence by a legal person, is punishable by a fine of up to 50 000 kroons.

§ 35. Sale of heat without approved price limit or with exceeded price limit

Sale of heat by a legal person without approved price limit or with exceeded approved price limit when approval of price limit is requested by this Act, is punishable by a fine of up to 50 000 kroons.

§ 36. Violation of obligation to connection to a network and collection of unjustified connection charges

Violation of obligation to connection to a network and collection of unjustified connection charges for consumer installation within the network operator’s licenced territory and in compliance with the requirements established by this Act and other legislation, is punishable by a fine of up to 50 000 kroons.

§ 37. Proceedings

(1) The provisions of the General Part of the Penal Code (RT I 2001, 61, 364; 2002, 82, 480; 86, 504; 105, 612; 2003, 4, 22) and the Code of Misdemeanour Procedure (RT I 2002, 50, 313; 110, 654) apply to the misdemeanours provided for in §§ 33-36 of this Act.
(2) The Energy Market Inspectorate shall conduct extra-judicial proceedings in the matters of the misdemeanours provided for in §§ 33-36 of this Act
(3) The rural municipality or city government shall conduct extra-judicial proceedings in the matters of the misdemeanours provided for in § 35 and § 36 of this Act within the limits of their competence.

§ 38. Payment of fine

(1) A fine pursuant to §§ 33-36 of this Act accrues to the state budget, except in the cases specified in subsection 2 of this section.
(2) If the rural municipality government or city government conducting extra-judicial proceedings imposed the fine, the fine for misdemeanours provided for in § 35 and § 36 of this Act is transferred to the budget of the local government that has imposed the fine.

Chapter 7

IMPLEMENTING PROVISIONS

§ 39. Due date of contract between undertaking and state pursuant to the Energy Act

Contract between undertaking and state pursuant to the Energy Act (RT I 1997, 52, 833; 2001, 52, 303; 88, 531; 93, 565; 2002, 25, 145; 41, 251; 49, 311; 63, 387; 82, 482) is valid until due date specified in the market licence.

§ 40. Validity of market licence

(1) Market licence issued on the basis of the Energy Act is valid until due date specified in the market licence.
(2) The Energy Market Inspectorate enters valid market licences issued before entry into force of this Act into the state register of undertakings operating in areas of activities subject to special requirements within one year as of the date on which this Act enters into force.

§ 41. Act of bringing undertaking's activity into accordance with requirements pursuant to this Act

(1) A heat operator operating under the Energy Act before entry into force of this Act shall bring its activity into accordance with the requirements of this Act within one year as of the date on which this Act shall enter into force.
(2) Heat price of an heat operator that was valid before entry into force of this Act, and approved pursuant to the Energy Act, is considered as price limit for sale of heat by the heat operator as of the date on which this Act shall enter into force.

§ 42. Amendment of the State Fees Act

The State Fees Act (RT I 1997, 80, 1344; 2001, 53, 310; 55, 331; 56, 332; 64, 367; 65, 377; 85, 512; 88, 531; 91, 543; 93, 565; 2002, 1, 1; 18, 97; 23, 131; 24, 135; 27, 151 and 153; 30, 178; 35, 214; 44, 281; 47, 297; 51, 316; 57, 358; 58, 361; 61, 375; 62, 377; 90, 519; 102, 599; 105, 610; 2003, 4, 20; 13, 68) is amended as follows:
1) clause 265 is added to subsection 2 (3) worded as follows:
"265) acts performed on the basis of the District Heating Act;";
2) subsection 14 is added to section 7 worded as follows:
"(14) In clauses 1882 (1) 1)-3) upon issue of an activity licence, the licensee pays the state fee for a validity year 10 days prior to the beginning of the next validity year ";
3) § 1882 is added to this Act worded as follows:
"§ 1882. Issue of activity licence and change of terms of activity licence
(1) State fee for a validity year of activity licence for performing the activity specified in subsection 18 (2) of the District Heating Act is paid as follows:
1) heat production more than 50 000 MWh in a year - 4000 kroons per undertaking;
2) heat distribution more than 50 000 MWh in a year - 4000 kroons per undertaking;
3) sale of heat more than 50 000 MWh in a year - 4000 kroons per undertaking or per undertaking belonging to the group if their total sale of heat exceeds 50 000 MWh in a year.
(2) If the licensee initiates the procedure to change the terms of the activity licence issued for activity specified in subsection 18 (2) of the District Heating Act, the licensee pays state fee of 50% of the state fee rate provided in subsection 1 of this section."

§ 43. Entry into force of Act

This Act enters into force on 1 July 2003.
Vice-President of the Riigikogu Tunne Kelam
Tallinn, February 2003