Overview of DHC Legislative Framework

Overview of DHC Legislative Framework

Country

Sweden

#

Name and reference of measure

Type of measure

Responsible organ

Existing or planned?

1

Fjärrvärmelag (2008:263) District heating law

Rules in order to strengthen the consumer’s position in the market through an increased transparency into the district heating companies

Energimarknadsinspektionen/ Energy Markets Inspectorate

In action since July 1, 2008

Legislative Framework

As any other industry or market, the district heating market has to comply with the competition act. Being an unregulated natural monopoly the most important part of the competition act for this market is the prohibition against abuse of a dominant position. Such abuse may in particular consist of: directly or indirectly imposing unfair purchase or selling prices or other unfair trading conditions; limiting production, markets or technical development to the prejudice of consumers; applying dissimilar conditions to equivalent transactions with other trading parties, thereby placing them at a competitive disadvantage; or making the conclusion of contracts subject to acceptance by the other parties of supplementary obligations, which by their nature or according to commercial usage, have no connection with the subject of such contracts. It is up to the Competition Authority to prove that a company may have abused its dominant position.

A new law on district heating came into action on July 1, 2008. This new law (SFS 2008:263) aims at strengthen the consumer’s position in the market through an increased transparency into the district heating companies. This will take place partly with higher demands and clarifications on the conditions in all formal agreements between buyers and sellers, rules around obligations to negotiate, protections against stoppage, transparent and clear price information and the use of open accounts of all facts regarding district heating companies operations and finance.

According to the Ministry of Enterprise, Energy and Communications, the law aims at maintaining the unregulated heat market at the same time as the consumer’s position is strengthened. A district heating board is also established that has as its major task to mediate in negotiations according to the new district heating law.

There is no national targets for DH in Sweden, and has never been.

Purpose of the Legislation

The reason for this law was complaint from several customers and customer organisations on price increases and “monopoly” like behaviour in some DH companies.

The law on district heating came into action on July 1, 2008.

The contents rules in order to strengthen the consumer’s position in the market through an increased transparency into the district heating companies.

Further step discussed is price regulation and TPA. For TPA a governmental committee is set up. Result is expected in December 2010.