HAVET & VANHUFFEL – Association d’avocats
The dispute opposes a Bulgarian district heating company and an individual regarding payment of invoices for thermal energy supplied in a condominium building connected to a district heating system.
Relevant EU Law
Article 9(1) and (3) of Directive 2012/27/EU provides:
“1. Member States shall ensure that, in so far as it is technically possible, financially reasonable and proportionate in view of the potential energy savings, final customers for electricity, natural gas, district heating, district cooling and domestic hot water are provided with individual meters at competitive prices that accurately reflect the actual energy consumption of the final customer and provide information on the time of use.
Such individual meters at competitive prices shall always be provided:
(a) when an existing meter is replaced, unless it is not technically possible or cost-effective in view of the potential long-term savings estimated;
(b) when a new connection is made in a new building or when a building undergoes major renovations as defined in Directive 2010/31/EU of the European Parliament and of the Council of 19 May 2010 on the energy performance of buildings.
[…]
3. Where a building is supplied with heating, cooling or domestic hot water from a district heating or central source serving multiple buildings, a heat or hot-water meter shall be installed at the heat exchanger or point of delivery.In multi-apartment buildings and mixed-use buildings supplied from such systems, individual consumption meters shall also be installed by 31 December 2016 to measure the consumption of heat, cooling or hot water for each unit, whenever this is technically possible and cost-effective.
Where individual meters are not cost-effective or technically feasible, individual heat cost allocators shall be used to measure heat consumption at each radiator, unless the Member State demonstrates that their installation is not cost-effective. In such cases, other cost-effective methods for measuring heat consumption may be considered.
Where multi-apartment buildings are supplied by district heating or cooling, or where such buildings are mainly supplied by collective heating or cooling systems, Member States may introduce transparent rules on the allocation of the costs of thermal or hot-water consumption in such buildings, in order to ensure transparent and accurate individual consumption accounting.
Where necessary, such rules shall include guidance on the allocation of costs relating to:
(a) domestic hot water;
(b) heat radiated by the building installation and for the heating of common areas (where stairwells and corridors are equipped with radiators);
(c) apartment heating.”
In the present case, the heating company claimed payment of 519 Bulgarian leva (BGN) (approximately €265) for the consumer’s thermal energy consumption between 1 May 2018 and 31 October 2020, which remained unpaid.
Since the apartment owner had not paid these amounts, the heating distributor brought an action before the Rayonen sad Plovdiv (District Court of Plovdiv, Bulgaria) seeking an order for payment.
The consumer disputed liability for the amounts claimed, arguing in particular that the mathematical formula referred to in point 6.1.1 of the methodology used to calculate the distribution of thermal energy consumption among the various co-owners contravened EU law.
The referring court expressed doubts as to whether this methodology was compatible with Article 9(3) of Directive 2012/27. It noted that the elements of the mathematical formula in point 6.1.1 were unclear, and that — based on the parameters used — it was highly likely that the amounts charged to consumers not using thermal energy in their apartments were excessive. The formula appeared to rely on theoretical data from the heating system design, without considering the actual conditions in which the installations operated or whether those conditions matched the theoretical assumptions.
Preliminary Questions Referred
The District Court of Plovdiv therefore stayed the proceedings and referred the following preliminary questions to the Court of Justice:
-
Do Article 9(3) of Directive 2012/27 and Article 169 TFEU permit costs to be charged for the thermal energy emitted by a building’s installation, even where the stairwells and corridors of the building are not equipped with radiators?
-
Do the same provisions allow a district heating company to claim, under national law, payment for thermal energy used by the building’s installation, where the quantity of energy is determined on the basis of a formula established by the administration which:
-
introduces a coefficient based on the proportion of the installed power of the building’s system relative to total heating capacity, without explaining how that coefficient is determined;
-
uses an installed power value that does not correspond to the actual capacity installed;
-
does not account for the temperature of the heat transfer medium in the system;
-
presumes continuous operation of the system at maximum capacity;
-
fails to consider the specific characteristics of different heating systems (such as the Tichelmann system), treating them all equally;
-
assumes that the temperature in the building is 19°C.
-
Assessment by the Court
The Court first noted that Directive 2012/27 aims, pursuant to Article 1, to promote improved energy efficiency. As stated in recital 8, the entire energy chain — from production to final consumption — is involved in achieving this objective.
Under Article 9(1) of the Directive, Member States must ensure that, where technically possible, financially reasonable, and proportionate, final customers receive individual meters accurately indicating their actual energy consumption and the timing of such use.
In situations such as the one at issue — multi-apartment buildings connected to a district heating network — Article 9(3) requires that individual consumption meters be installed by 31 December 2016, where technically feasible and cost-effective. Where this is not possible, heat cost allocators or other cost-effective methods may be used.
The Directive, particularly in light of recital 20, gives Member States a broad margin of discretion in choosing suitable measures to reduce energy consumption and in determining how to implement them. States may thus establish transparent rules for allocating thermal energy or hot-water costs within multi-apartment buildings, or provide a general framework allowing flexibility at the condominium level.
In certain condominiums connected to a district heating system — such as the one in the main proceedings — it is practically impossible to individualize heating bills fully, especially concerning the internal installation, meaning the system of conduits, distribution and supply installations, and common areas. It may be difficult or impossible to determine precisely how much heat is emitted by this installation into each apartment, since it includes both heat released within the apartment and thermal exchanges between heated and unheated premises. Apartments in such buildings are thermally interdependent, as heat circulates between warmer and cooler units.
Findings of the Court
The Court observed that although the mathematical formula in point 6.1.1 of the methodology is based on some objective data, the file before it suggests — subject to verification by the referring court — that the formula does not take into account several parameters reflecting the actual operation of the heating system. Such a formula should consider, for instance, the specific characteristics of the building, such as insulation, the materials used in the heating system, and potential heat losses.
Therefore, the Court concluded that the formula in question does not ensure transparent and accurate individual consumption accounting, within the meaning of Article 9(3) of Directive 2012/27.
Operative Part of the Judgment
In light of the foregoing, the Court held that:
Article 9(3) of Directive 2012/27/EU must be interpreted as not precluding national legislation under which the owner of an apartment in a condominium is required to pay the costs charged for thermal energy emitted by the conduits and installations for the distribution and supply of thermal energy within the building, including where stairwells and corridors are not equipped with radiators, in proportion to the heated volume of the apartment, provided that the rules and parameters used to calculate the charges for individual consumption of thermal energy for space heating and domestic hot water ensure transparent and accurate accounting of individual consumption.
It is for the national court to verify these elements.
ToF access of the judgment, follow the link: https://curia.europa.eu/juris/document/document.jsf?text=&docid=305430&pageIndex=0&doclang=fr&mode=req&dir=&occ=first&part=1&cid=5298221.