ANNUAL REPORT 2010 - Konkurentsiamet

the explanatory report of the draft 597 SE, annexed to the text of the draft and taking into
account the later amendments 2 .
Compared to the initial text of the draft, MHKS has totally changed in the final version. The
part of ÜVVKS was amended, joining the ideas of the initial text of the draft submitted by
parties with the provisions related to the economic regulation of the draft prepared in the
Ministry of the Environment and taking into account the proposals of the Competition
Authority. The draft was also specified in parts of the Penal Code and KKütS.
In case of the latter a completely new amendment was added to the draft, regulating the
access of a third party to the district heating network, while formerly these issues were not at
all regulated in the District Heating Act. Thus the general regulation of an operator
possessing the dominant position in the market specified in the Competition Act also
extended to network operators. Pursuant to this, a network operator (e.g. AS Tallinna Küte)
had to also enable other heat operators to access the network, i.e. to enable the sale of the
heat produced by them to the network, avoiding discrimination of different heat operators
on any basis. Unequal treatment of other heat operators by a network operator can be
caused by various considerations. For example, preference of one producer may take place
due to the used fuel, its security of provision, production technology, etc. In several cases,
special treatment can be considered justified. However, discrimination can be caused by the
interests of the network operator related to mutual competition of the producers for access
to the district heating network. This is especially probable in a situation where the network
operator or an operator belongs to the same group of companies also operating as a heat
producer. In such case he can actually sell heat to the network under the conditions set by
himself and reject any other offers, which could be more favourable for the end consumer,
but will not ensure similar profitability for the heat operator. A monopoly heat operator is
interested in excluding the access of competing producers to the district heating network or
the provision of unfavourable conditions for the competitors, not enabling them to actually
compete for the access to the district heating network. The method used in practice has been
a conclusion of long-term bilateral supply contracts, restricting or excluding access of a third
party to the district heating network. During the proceeding of the draft in the Riigikogu a
proposal was made to enter clearly into the act not only the obligatory approval of long-term
supply contracts by the Competition Authority, but also the basis for the refusal of the
2 http://riigikogu.ee/?page=en_etapid&op=ems&eid=790420&u=20100818135806
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