LAW ON ENERGY

LAW ON ENERGY official translation REPUBLIC OF LITHUANIA LAW ON ENERGY 28 March 1995 No.I-828 (As amended by 16 March 2000 No. VIII-1567) Vilnius CHAPTER I. GENERAL PROVISIONS Article

1. Terms and Definitions As used in this Law: energy means a section of the economy which embraces prospecting for, extraction, transportation and storage of energy resources, generation, transformation, distribution, transmission, trade in and consumption of different types of energy; energy system means the entire complex of energy enterprises (companies) connected by technical, organisational or/and economic links and functions of the mode of operation; energy sector means the energy section connected with any type of energy resources or energy: fuel, electricity, heat; primary energy resources means natural resources which may be directly used for fuel (shale, coal, peat, biomas, combustible gas) or for the generation of energy (nuclear fuel, petroleum, hydroenergy, solar energy, wind energy or geothermal energy); renewable energy resources means solar energy, wind energy, hydroenergy, geothermal energy, biomas energy; secondary energy resources means waste energy obtained in the course of any technological process through transformation of primary or any other energy which is not utilised in this technological process; energy efficiency means generation and consumption of all types of energy and its consumption in the most advanced manner; energy enterprise means an economically and juridically legalised independent economic entity whose principal purpose(s) is/are energy activities; energy activities means activities related to prospecting for, extraction, transportation, distribution of energy resources, generation, transmission of energy, trade in energy or operation of power-generating equipment; operation of power generating equipment (electricity, heat, gas, petroleum) means technological management of equipment, its technical maintenance, repairs measurement, testing, work related to its putting into operation and adjustment; standards and norms of energy means static and dynamic technical characteristics of facilities, products, structures and equipment used in energy activities which have been approved in the established manner, as well as specifications regulating the quality of energy and energy raw materials. Article
2. Purpose of the Law on Energy The Law on Energy defines the general provisions of energy activities, the basic principles of energy development, functioning and management. Activities of individual sectors of energy, of state, municipal and private energy enterprises, energy producers, suppliers and consumers, their legal and economic relations when the object thereof is energy or energy resources, shall be regulated by other laws and subordinate legislation. Article
3. Goals of Energy Policy The principal goals of the State energy policy are as follows: 1) saving of energy; 2) efficient consumption of primary energy resources; 3) reduction of comparative energy consumption for the production of the national product; 4) targeted efforts towards and guaranteeing of reliable supply of energy resources by using various resources, including indigenous resources, by diversification of fuel import sources taking into account the necessity of demonopolisation and decentralisation; 5) promotion of efficient use of indigenous, renewable and secondary energy resources by the producers and consumers; 6) reliable, good-quality and cost-effective production and supply of electricity, heat and fuel from energy sectors; 7) reduction of adverse effects of energy on the environment; 8) formation of legal and economic conditions favourable for investment; 9) promotion of competition and private capital participation in order to increase economic efficiency. CHAPTER II. USE OF ENERGY RESOURCES Article
4. Basic Provisions of the Use of Energy Resources The procedure for the use of energy resources and energy consumption shall be approved by the Government of the Republic of Lithuania or the institution authorised by it Relations between the recipients of energy resources and energy producers, consumers and suppliers shall be based on contracts. Extraction of energy resources and energy production and consumption shall be subjected to State supervision. Article
5. Procedure for Approving Subordinate Legislation Regulating Energy Activities Subordinate legislation regulating energy activities shall be approved by the Government of the Republic of Lithuania or the institution authorised by it. In addition to this Law, enterprises, institutions, organisations and residents (energy producers, suppliers and consumers) must also comply with other standard acts (installation, operation, labour safety, personnel training and performance evaluation regulations, etc.) which regulate technical, operational and other energy -related issues. These regulatory enactments shall be approved by the Ministry of Economy or other state institutions of Lithuania according to their respective competence. Article
6. Energy Saving Fund Energy Saving Fund is set up for the purpose of efficient implementation of measures for the supply of energy resources, energy production and consumption. The capital of the Fund shall be used for financing energy saving and efficient consumption programmes, for the introduction, operation and development of measures for the use of indigenous, renewable and secondary energy resources. The initial contribution to the Fund shall be made up in accordance with the procedure established by the Government. The regulations of the Fund shall be approved by the Government or the institution authorised by it. Article
7. Energy and Environmental Protection Energy activities shall be regulated by laws on environmental protection, subordinate legislation, other regulations, taking into account the requirements set forth in international agreements (conventions) on environmental issues. It shall be prohibited to initiate energy activities if the activities are not in compliance with the Law on the Environmental Protection, standards and norms of environmental protection. Article
8. Rights and Duties of Energy Consumers Energy consumers shall use energy in compliance with the regulations approved by the Government of the Republic of Lithuania or the institution authorised by it. The rights of energy consumers shall be protected by the Law on Consumer Protection and other legal acts of the Republic of Lithuania. CHAPTER III. ENERGY STRATEGY AND INVESTMENT Article.
9. Shaping of the National Energy Strategy The aim of the National Energy Strategy is to define the purposes of energy development, the most important principles of its management, taking into account the development of economy under market conditions. The National Energy Strategy shall cover the following sectors: 1) electric energy sector; 2) thermal energy sector; 3) gas sector; 4) petroleum and its products sector; 5) other fuels sector. The National Energy Strategy shall be worked out for a no less than 20-year period and shall be revised at least every 5 years. Development of the National Energy Strategy may be financed with the State funds. The Ministry of Economy shall be responsible for the development of the Strategy and its implementation control. The National Energy Strategy shall be approved by the Seimas on the proposal of the Government of the Republic of Lithuania. Long-term energy development projects shall be worked out based on the National Energy Strategy. Long-term energy development projects must be prepared taking into account the possibility of implementing the demonopolisation principle and using decentralised energy sources and small-scale energy. The procedure of project development and approval shall be established by the Ministry of Economy. Article
10. Investment Energy facilities of national significance shall be built in accordance with the National Energy Strategy. They may be financed from various sources. The amount of State capital must guarantee that controlling interest should be held by the State. The laws of the Republic of Lithuania may prescribe other rules of investing into energy facilities, than those specified herein. Financing of municipal and other energy facilities of local significance, as well as development of energy activities shall be the concern of city (district) municipalities, energy suppliers or/and consumers, private investors. Article
11. Fuel Reserves In order to increase reliability of energy supply, fuel reserves shall be accumulated at energy enterprises. The reserves must be no less than the amount of fuel required to satisfy 2-month energy demand. The procedure for the building up, storage, use and accounting of State fuel reserves shall be determined by the Government of the Republic of Lithuania or the institution authorised by it. The Ministry of Economy shall be responsible for the building up and use of State fuel reserves. The Government of the Republic of Lithuania shall allocate funds for the building up and storage of State fuel reserves. Energy producers must have reserve or emergency fuel, taking into account the significance of the facility. Article
12. Use of Renewable and Secondary Energy Resources By shaping taxation policy, granting soft credits, extending grants, the State (municipality) shall promote efficient use of renewable and secondary energy resources. The Ministry of Economy shall be responsible for the use of renewable and secondary energy resources. At the request of consumers who use renewable energy resources, surplus energy generated by their autonomous equipment must be received into the energy networks and settlement of accounts with such consumers shall be effected on a negotiated price and tariff basis. The procedure and terms and conditions of their connection to the energy networks shall be established by the Ministry of Economy. The use of potential energy of internal waters, when this entails damming of the river or changing the river bed, shall be permitted only subject to an authorisation. The authorisation shall be granted in accordance with the procedure established by the Law on Water. Geothermal energy may be used only in the manner prescribed by the Underground Law. CHAPTER IV. PRINCIPLES OF ENERGY MANAGEMENT Article
13. Ownership All primary energy resources found in the Republic of Lithuania on land, in the underground of the continental shelf and of the economic zone in the Baltic Sea are exclusive property of the State. They shall be used according to the procedure established by the Underground Law. Energy enterprises (companies) may be of any ownership form permitted under law, except for energy enterprises of national significance the list whereof shall be approved by the Seimas of the Republic of Lithuania on the proposal of the Government. The conditions of presence in the territory of the Republic of Lithuania of energy enterprises and facilities shall be regulated by the Government of the Republic of Lithuania or the institution authorised by it, in compliance with the Constitution of the Republic of Lithuania, this Law and other laws effective in the Republic of Lithuania, also interstate agreements. Setting up, sale or transfer of energy enterprises as well as granting of authorisations for the use of energy resources to legal or natural persons of foreign states shall be prohibited if this may be detrimental to the interests of the Republic of Lithuania or increases its dependence on the energy monopoly of foreign states. Article
14. Allotment of Land for Use and Land Lease For the construction and extension of energy generation and transmission facilities, construction of electric power lines and pipelines, land shall be allotted for use or leased in accordance with the procedure established by laws and subordinate legislation. Restricted area shall be established for the purpose of ensuring security and normal operation of energy facilities, electric power lines and pipelines as well as other installations. The land of restricted area may be taken for public needs from private land owners and other land users in accordance with the procedure set out in the Law on Land. The economic use of land of the restricted area, which has not been taken from the land owners or other land users, shall be restricted. Regulations for the protection of energy facilities, electric power lines and pipelines shall be approved by the Government of the Republic of Lithuania or the institution authorised by it. Specific conditions of land use restriction and compensation for possible damage incurred by reason thereof shall be recorded in a written notarised agreement concluded between the land owner or other user of land and the energy system (enterprise). Agreements between land owners and energy systems (enterprises) regarding the use of land shall become effective upon the registration thereof in the Data Register of the State Land Cadastre. Land use restrictions prescribed by these agreements must be in compliance with the regulations for the protection of energy facilities, electric power lines and pipelines. Article
15. Prices, Pricing and Control over Energy Activities Fuel and energy prices shall be fixed upon evaluating necessary expenses related to fuel extraction, energy generation, purchase, and transportation as well as development of energy. Prices and tariffs must correspond to the quality of energy, promote efficient energy generation, reliable supply, economical consumption and reduction of supply losses as well as the use of secondary energy resources. Electric energy, district heating and natural gas prices may be differentiated according to consumer categories, fuel and energy quality, reliability of supply, time of consumption (day, week, season) and the amount of energy consumed, and for electric energy - also taking into account the location of voltage meters. The issues of pricing in the energy sector shall be examined by the standing State Prices and Energy Control Commission (hereinafter - the Commission). The Commission shall be appointed on the nomination of the Government for a term of 5 years by the President of the Republic who shall also remove its members from office and approve the Commission regulations. The Commission shall examine the most important issues of energy economy, including investment, shall establish the principles of pricing in the energy sector, electric energy, district heating, hot water and natural gas price calculation methods, shall check the calculation of electric energy, district heating, hot water and natural gas prices submitted, in accordance with the methods approved by the Commission, by the suppliers (legal and natural persons generating, transmitting and distributing to the consumers electric energy, district heating, hot water and natural gas). The prices of electric energy, district heating, hot water and natural gas shall be fixed by the suppliers of electric energy, district heating, hot water and natural gas upon co-ordination with the Commission. If electric energy, district heating, hot water and natural gas suppliers fail to co-ordinate the prices with the Commission, the latter must adopt a decision on the levels of prices of the energy used and specify the period of its validity. The Commission shall supervise the application of electric energy, district heating, hot water and natural gas prices and the implementation of the saving programmes, and shall also have the right to check the fuel and energy quality, its conformity to standards, to exercise control over trade in energy resources and energy products. The Commission shall submit its findings and proposals to the Seimas, the Government and, in the event of disclosure of instances of abuse, to the prosecutor’s office. The Commission shall report to the Seimas at least once a year. On the decision of the Government or a municipal council, compensations may be paid out from the State or municipal budgets to certain consumer groups for the purchased fuel, electric and thermal energy and natural gas. CHAPTER V. PRINCIPLES OF ENERGY MANAGEMENT Article
16. Energy Management Energy activities shall be regulated by the Ministry of Economy and other institutions of the Republic of Lithuania. The Ministry of Economy shall represent State interests in the sphere of energy, implement State energy policy goals and act in compliance with the regulations approved by the Government. The Energy Agency shall work out draft programmes of the National Energy Strategy and of economical and efficient use of energy resources, organise their implementation, devise legal, economic and organisational measures for the implementation of national policy of efficient energy use as well as draft laws and subordinate legislation regarding the issues. The Energy Agency is a State enterprise. Its founder is the Ministry of Economy. Article
17. Energy Licences and Authorisations Only enterprises, which have been granted licences according to the procedure established by the Government of the Republic of Lithuania may engage in the importation, exportation, wholesale and retail of unprepacked petroleum products according to the list specified by the Government. Licences to engage in the importation, exportation, wholesale and retail of unprepacked petroleum products shall be issued for an unspecified term and shall be reregistered every year with the issuing body. Licences for the importation, exportation and wholesale of unprepacked petroleum products shall be issued by the Ministry of Economy. Retail in unprepacked petroleum products shall only be allowed with licences issued by the appropriate local government. Only enterprises which have been granted authorisation in the manner established by the Ministry of Economy may engage in the operation of power generating equipment (electricity, heat, natural gas and liquefied petroleum gas). Authorisations shall be granted by the State Energy Inspectorate under the Ministry of Economy. Article
18. Energy Sectors and Peculiarities of their Activities The Republic of Lithuania has the following energy sectors: electric energy, thermal energy, gas, and petroleum and its products sectors. Electric power plants operating within the general energy system shall work under unified conditions of operation and must comply with operational control. The above-mentioned requirements shall be mandatory to repairs and construction-assembly enterprises as well as other enterprises the main function of which is to maintain and ensure normal operation of the electric power system. The energy system may be connected to foreign state electric power systems for operation in parallel mode on contractual basis and shall be under joint operational control of energy systems in accordance with the functions regulated by agreements between states. When the pipelines are connected to foreign state networks, the sectors of gas, petroleum and its products shall operate under joint co-ordinated control in accordance with the functions regulated under agreements between states. Article
19. Training of the Energy Sector Personnel and their Performance Evaluation Executives and specialists of energy enterprises engaged in energy sector production operations must have special training. Energy enterprises shall prepare and train the personnel at the educational institutions supported by these enterprises. The personnel of energy enterprises specified in Par. 1 hereof must from to time be subjected to performance evaluation. The personnel engaged in the operation of power-generating equipment must have adequate qualifications and be subjected to performance evaluation. The procedure for training and performance evaluation of energy specialists shall be established by the Ministry of Economy. CHAPTER VI. STATE SUPERVISION OF ENERGY AND RESPONSIBILITY FOR VIOLATIONS OF THIS LAW Article
20. State Supervision of Energy State supervision of energy shall be carried out by the State Energy Inspectorate under the Ministry of Economy. State supervision of power-generating equipment of natural and legal persons (according to the list approved by the Ministry of Economy) shall be exercised on the whole territory of the country irrespective of the official subordination, forms of ownership and capacity of power-generating equipment. The Inspectorate shall not exercise state supervision over nuclear power equipment. The main purpose of the Inspecorate is to exercise state supervision and control over power-generating equipment of natural and legal persons of the Republic of Lithuania in order to ensure reliable, efficient and secure supply and consumption of energy resources. Article
21. Responsibility for Violations of the Law on Energy Legal and natural persons who violate the requirements of this Law shall be held responsible under the laws of the Republic of Lithuania. CHAPTER VII. INTERNATIONAL ACTIVITIES Article
22. International Activities International activities in the sphere of energy shall be developed in the interests of the Republic of Lithuania. International activities of energy systems (enterprises), institutions and organisations shall be co-ordinated by the Ministry of Economy. The Ministry of Economy shall submit proposals to the Government of the Republic of Lithuania in accordance with the established procedure regarding participation in the work of international energy organisations. I promulgate this Law passed by the Seimas of the Republic of Lithuania. President of the Republic Algirdas Brazauskas