Top-8 Myths on Metering Law: What Ukrainians Must Pay for
The Verkhovna Rada this summer made a significant breakthrough in legislative encouragement of the energy efficiency improvements in the residential housing stock: three relevant laws were adopted. Generally speaking, they are called to promote the comprehensive and responsible energy modernization and full and fair metering of the consumed communal services.
Responsible for the latter is the Law of Ukraine “On Commercial Metering of Heat Energy and Water Supply” which was circulating in the parliament for several years in different versions. The experts, international organizations and public insisted on the need of its adoption. RPR recognized it as a really reformative law, but it also had numerous opponents because it stops the practice of fishing in troubled waters which is so typical for Ukraine.
What myths have developed around the Law before and even after its adoption, and is there any ground for them? "Obozrevatel", together with the USAID Municipal Energy Reform Project in Ukraine, have looked at the problem and dispelled eight myths.
Widespread myths about the Law “On Commercial Metering of Heat Energy and Water Supply”
MYTH 1: You can throw away the apartment-level heat and water meters
MYTH 2: The Law contains the formula which obliges to pay not only for yourself but also for the neighbors
MYTH 3: The bill will increase because of the items on repair, servicing and calibration of the meters
MYTH 4: Communal services providers can violate this Law with impunity, as they like
MYTH 5: The Law prohibits heat meter installation in common areas
MYTH 6: Communal services providers may ignore the Law if meter installation is not approved in their tariffs
MYTH 7: The Law obliges to review the agreements on providing communal services in the multi-apartment buildings
MYTH 8: The building residents themselves must initiate installation of the building-level meter
MYTH 1: You can throw away the apartment-level heat and water meters
In fact, this is not true because the apartment-level heat and water meters are no less important for commercial metering than the building-level meters. The fact is that according to the Law, the commercial metering unit – i.e., the building-level meter – serves to meter total amount of heat energy or water consumed in the building. But then this amount must be distributed among the residents of the building so that they can fairly pay for what they consumed. This is exactly what the apartment-level meters do, therefore, they are still needed.
Let us look at water metering: it was proved that the building-level meter accuracy is higher than that of the apartment-level meter. Therefore, the principle of charging the payment for water consumed by the building is as follows: the amount metered by means of the commercial metering unit will be distributed among all residents of the building proportionally to readings of the apartment-level (distribution) meters. At the same time, the Law provides details of the distribution, taking into account both water consumption for the building needs, and unauthorized interference in the system, etc.
Such a system solves the problem of difference in the readings of the building-level and apartment-level meters in their totality, caused by different classes of their accuracy. However, there is a nuance – since the key principle of the Law is that "all the resources that entered the building must be paid for", the leakage through the holed pipes will be paid by the building residents themselves. Possible solution is to repair the utility networks with the help of various co-financing programs.
MYTH 2: The Law contains the formula which obliges to pay not only for yourself but also for the neighbors
This is an absolute nonsense called to accumulate negative opinions on the Law. In fact, everyone will continue paying for what he/she has consumed (we have described above why exactly and how the apartment-level meters are used for this). But here too one should notice an important point. If your neighbors are fooling with the meters – ultimately, everyone will have to pay proportionally for this (however, the new metering rules and access to the metering information allow you to “figure out” a fraudster quickly). The same applies to the holed pipes or broken windows on stairways: losses of water and heat in the building are responsibility of the co-owners themselves, and only they can eliminate them, thus reducing the amounts in the bills.
MYTH 3: The bill will increase because of the items on repair, servicing and calibration of the meters
And indeed, a new item will appear in the bills, but it will not increase the total amount for the service as the ill-wishers promise it. It's simple – most utility companies have already included the cost of meter installation and taking readings in the tariffs. It's just not customary to talk about it. Moreover, the residents of multi-apartment buildings who have installed the building-level meters at their own expense will no longer pay for their installation in other buildings, as it was until now when the utilities included this service in the investment component of the tariff and evenly charged to all their clients.
That is, the Law simply revealed this secret by disclosing as separate item in the bill those expenses that were previously "hidden" in the tariff.
MYTH 4: Communal services providers can violate this Law with impunity, as they like
This does not correspond to reality because the Law clearly defines in Articles 13-16 a number of financial sanctions for the communal services providers for its violation. At the same time, some provisions of the Law envisage administrative liability for non-compliance, in particular, for the consumers.
MYTH 5: The Law prohibits heat meter installation in common areas
This is not the case – the Law does not directly prohibit, but also does not oblige to install the meters in common areas. However, the experts advise taking advantage of such metering where it exists: the more information about the resources consumption by the building – the more control over losses of water and heat.
MYTH 6: Communal services providers may ignore the Law if meter installation is not approved in their tariffs
In fact, the Law provides for a new logics for installation of the building-level meters, instead of "hiding" this item in the investment component of the tariff for communal service. The Law envisages that if the co-owners do not want to install the building-level water and heat meters independently, the networks operator install it itself, and the cost of it is charged to the co-owners of a particular building in the form of a fee spread over 5 years.
In general, there are 4 basic options for installation of the building-level meters – all of them are presented in the infographics below.
Options for Installation of Building-Level Heat and Water Meters
Option1:
• the meter is installed by the operator of external utility networks
• cost of the meter and its installation is paid by the consumers
ocompensation takes place through payment of the meter installation fee to the service provider
oamount of the meter installation fee is determined separately for each building
opayment of fees is spread over a five year period, or another period upon consent of the parties
Option 2:
• the meter is selected and purchased by the consumers at their own expense
Option 3:
• the local self-government bodies may allocate funds from the local budget for equipping buildings with the meters, as well as to ensure safeguarding of the meters
oin such cases, no fees are paid to the service provider for meter installation
IN ALL CASES:
• the metering units and common property of the building co-owners
• the meters are accepted by the operator of external utility networks for maintenance within 14 calendar days from the date of installation, or the date of receipt of co-owners’ application by the operator
• liability for safety and integrity of the building-level meters rests with the co-owners of the building in which they are installed
MYTH 7: The Law obliges to review the agreements on providing communal services in the multi-apartment buildings
There are those who actively disseminate the interpretation of the Law that it allegedly involves calculations based on the building-level meters, and from now on only "collective", "the house as a whole" contracts must be concluded, instead of contracts with each individual owner of the apartment or non-residential premises. And even more: some companies have already rushed to address the homeowners associations with the requirement to conclude a "collective" contract for providing communal services.
In fact, the Law does not even mention conclusion, amendment or termination of the contracts because it is not its sphere of regulation – for this purpose there is the relevant Law "On Housing and Communal Services". The Law on Commercial Metering also does not contain any requirements or permits to change or terminate the previously concluded contracts on provision of such services. Therefore, previously concluded contracts are valid in full and there is no obligation to change them.
MYTH 8: The building residents themselves must initiate installation of the building-level meter
This is another speculation, since the Law imposes the obligation on the external networks operator to initiate installation of the building-level meter. As we have already said above, no one is asking for the consent of the co-owners; in principle, it is presumed. However, those operators who have already addressed the homeowners associations with the letters on installation of building-level meters are somewhat ahead of the events. The Law requires that the operator inform the co-owners of the building (and not the homeowners associations) about an intention to install the meter, according to the procedure specified by the Cabinet of Ministers. And this procedure has not been approved yet.
Well, people who are accustomed to the previous system of the housing and communal services really have a lot of grounds to criticize the Law "On Commercial Metering of Heat Energy and Water Supply". And although most of them are fictitious, as we have shown above, there are also quite objective ones. First, it will be the consumers who pay for heat and water losses in the building itself, due to the obsolete equipment. Secondly, the buildings ultimately should be equipped with the heat and water meters – both building-level and apartment-level meters. However – if you think about it – these are quite logical and useful norms on the way to energy efficiency improvement in the residential buildings and to energy independence of Ukraine. The statistics clearly show: only awareness of the amount of own expenses stimulates consumers to save, in particular – through modernization of the utility networks of the building. And this is what Ukraine is urgently in need of.
You can find out more about how the Law already functions in the third issue of Season 3 of YOUR HOME program.
The article is prepared within the framework of the joint project of “Obozrevatel” and the USAID Municipal Energy Reform Project in Ukraine "Comfortable Lifehacks for Housing and Communal Services".
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USAID Municipal Energy Reform Project in Ukraine |
