One of the main tasks of natural gas market reform is to demonopolize service provision as much as possible in order to give customers access to a greater number of service providers, increase competition, and improve the quality of services.
Legislation requires that regional gas companies separate its selling and distribution functions (known as “unbundling”). Regional gas companies carry out the function of distribution (delivery) of gas. To pay for these services, two separate companies make two payments – for gas distribution and for supply.
Gas distribution is carried out by a natural monopolist – a regional gas company. The tariff for the delivery of a cubic meter of gas is the same for all consumers of a particular regional gas company.
Gas supply is a competitive business. The price of gas as a commodity can vary even among neighbors if they have different suppliers or tariff plans.
But there is another service of the gas sector – maintenance of gas networks inside apartment buildings.
Where did the third gas bill come from?
Until 2015, the service of gas networks in apartment buildings was part of gas supply services. However, in 2015, with the adoption of the new law “On the particularities of the ownership of apartment buildings”, apartment owners became co-owners of their homes as well as of all internal systems and networks of the building, along with responsibility for them.
Network owners (residents and HOAs) have been given the freedom to choose a company that can service the networks of their home. A regional gas company or an independent company that has the appropriate permits can be such a service company. But freedom involves responsibility. If the contract is not concluded, the regional gas company has no right to distribute gas to such consumers and must disconnect them.
In any case, to service the networks in the house, regional gas companies must enter into an agreement with the HOAs, manager or other authorized person.
Why can the whole building be disconnected from the gas supply?
The absence of a service contract can be the reason for disconnecting the entire building from gas supply. The rules for safety of gas supply systems prohibit the distribution of gas if the maintenance of in-house gas networks is not ensured.
Any company with the appropriate license can service residential buildings
Legislation allows competition in the service of networks – any company that has the appropriate license can do it.
Every regional gas company has a license because they have been servicing these networks for years. However, if the regional gas company is reluctant to conclude a contract, its behavior can be appealed to the National Energy and Utilities Regulatory Commission (NEURC).
Maintenance of internal utility systems ensures safety
Technologically, the maintenance of indoor utilities is a matter of safety for all residents of the building.
But the regulatory irregularity for the last five years has led to tensions and malpractice. The regulator has not approved the standard contract for the maintenance of domestic utilities, the methodology for calculating the boundary cost of services and the boundary price levels until now.
Contracts which require agreement with regional gas companies on individual terms are not always beneficial to consumers. Therefore, consumers should carefully evaluate contractors and enter into an agreement with a responsible, professional, licensed company. The price of services should not be the only important parameter to consider when choosing a service company.