HWW Hewelt Wojnowski Lindner i Wspólnicy sp.k. advises district heating companies and heat suppliers on licences, tariffs, heat sale contracts and disputes. Matters are led by Aleksandra Lindner, partner and adwokat (Polish advocate).
What this matter requires of counsel
Supply model and scope of the licence
Counsel starts with a diagram of the flow of heat: who generates it, who owns the network, who sells and to whom. The management board should prepare the parameters of the sources, a list of contracted capacities and an extension plan.
Generation of heat in sources with a total installed thermal capacity of up to 5 MW does not require a licence (Article 32(1)(1)(e) of the Polish Energy Law (Prawo energetyczne)). Transmission or distribution of heat does not require a licence where the total capacity contracted by customers does not exceed 5 MW (Article 32(1)(3) of the Energy Law). Trading in heat benefits from an exemption where the capacity contracted by customers is up to 5 MW (Article 32(1)(4)(a) of the Energy Law).
Heat from industrial processes
Article 32(4) of the Energy Law describes the exemption with the words “generation of heat obtained in industrial technological processes”. The provision combines it with the phrase “as well as where the amount of capacity contracted by customers does not exceed 5 MW”. The interpretation of this exemption is disputed. The law firm assesses in a specific matter the separateness of the conditions and whether an installation, for example a server room, involves an industrial technological process. Counsel needs a description of the process from which the heat comes and of how it is used.
The application and the response to a request
Counsel reconciles the description of the activity with the technical and financial documentation before filing the application. The application indicates the scope of the activity, its planned start date and the available resources (Article 35(1)(2), (4) and (5) of the Energy Law). The President of the Energy Regulatory Office (URE) allows at least 21 days from delivery of the request to remedy deficiencies (Article 35(2a) of the Energy Law). An application not correctly supplemented within the time limit is left without examination (Article 35(2b) of the Energy Law).
The first tariff and settlements
Counsel separately examines the exemptions from tariff approval, including the conditions concerning a specific source and customers (Article 47(1c) and (1d) of the Energy Law). The finance team should prepare the calculation in parallel with the licence application.
An undertaking required to have its tariff approved files the application without delay after obtaining the licence, no later than within 30 days (Article 47(1b) of the Energy Law). A timely application makes interim settlements possible until the approved tariff is introduced. Under it, the undertaking settles overpayments for the entire period of advance payments (Article 47(1b) of the Energy Law). The undertaking introduces the tariff at the earliest after 14 days, at the latest on the 45th day from publication (Article 47(4) of the Energy Law).
Heat sale contracts
The sale contract specifies, among other things, the price or the tariff group and the conditions of their change (Article 5(2)(1) of the Energy Law). Counsel verifies, using the example of an invoice, whether the contract clearly determines the amount due after a change of price or tariff group.
The dispute and the appeal route
Counsel establishes the undertaking’s claim and the documents confirming the course of the negotiations and the reasons for the refusal. At a party’s request, the President of URE resolves disputes including those over refusals to conclude a connection agreement or an energy sale contract (Article 8(1) of the Energy Law). The heat supplier’s counsel assesses whether the claim falls within this catalogue.
An appeal against a decision of the President of URE lies to the Regional Court in Warsaw, Court of Competition and Consumer Protection. The time limit is 14 days from delivery (Article 30(2) of the Energy Law).
Obligations after the decision
An undertaking generating heat supplied to a district heating network provides the required information for the previous year to the energy undertaking to whose network it is connected. The deadline is 31 January (Article 7b(6) of the Energy Law). An undertaking with a licence for the transmission or distribution of heat submits annually a report on actions serving to achieve an energy-efficient district heating system. It does so by 31 March (Article 7b(5)(1) of the Energy Law). The report to the President of URE covers the previous calendar year (Article 7b(5)(1) of the Energy Law). The undertaking then publishes on its website, among other things, the shares of renewable energy, waste heat and cogeneration in the heat supplied (Article 7b(5)(2) of the Energy Law). Counsel assigns data collection, checking and dispatch to specific persons.
How to assess counsel for this matter
- Does counsel distinguish installed and contracted capacity and indicate the evidence needed to assess the exemptions?
- Does counsel link the licence schedule with the first tariff and settlements?
- Does counsel verify the consistency of contracts, the tariff and invoices using the same example of a supply?
- Does counsel determine the route of the dispute, the appeal time limit and the persons responsible for the obligations after the decision?
Offer and contact
The scope of the work is described by the offers Licence for the generation, transmission and trading of heat and Waste heat: supply to a district heating network (in Polish). You can describe the matter in the form or call +48 22 100 42 24.
What we have written on this topic
- District heating activities without a licence, in which situations is this possible? (legal status as at 14 October 2024)
- Tariff preferences for waste heat in the Polish Energy Law