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Federal Law On Heating Supplies

July 27, 2010

Dmitry Medvedev signed Federal Law On Heating Supplies.

The Federal Law regulates the production, transmission and consumption of heat energy, heating capacity, heat-transfer agent using heating supply systems, and the functioning and development of such systems. It also defines the regulation and oversight powers of the state and municipal authorities in this sector, and the rights and obligations of consumers, heating providers, and heating supply network operators.

The law regulates the following activities:

– sale of heating resources and heat-transfer agent;

– provision of heating resources and energy transmission services;

– provision of reserve heat production capacity.

The law defines specific terms such as thermal energy, heat supply quality, heat energy source, heat-consuming installation, heating system, heating capacity, load on the heating system, heat supply consumer, and others.

The economically justified cost method of indexing tariffs will be used as the method for regulating tariffs, along with the method of guaranteed return on invested capital and the equivalent comparison method.

The law contemplates that if it is possible to make, within an individual heat supply system, an economically justified transition from a market condition characterised by absence of competition to a competitive market condition, heating supply tariff regulation within the system in question could be abolished.

The law sets the basic principles for tariff regulation and self-regulation in the heating supply sector. It sets provisions on relations between heat suppliers, heating supply network operations, and heating supply consumers. Furthermore, it also sets out the particular provisions regulating contractual legal relations between these actors.

The law also regulates issues such as the particular provisions applying to heating supplies for apartment buildings, heat energy stock-taking procedures and preparations for the heating season, and procedures for access to work on ensuring proper maintenance and functioning of heating supply systems.

July 27, 2010