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Legislation changes in EE law and some other minor issues

The legislative changes in energy efficiency law and some other minor issues in public ownership laws came into force from 1. February 2019.

•  Act no. 4/2019 Coll., amending and supplementing act no. 321/2014 Coll. about energy efficiency and on amendments and supplements to certain laws and amending and supplementing to certain laws

These changes explicitly allow public sector entities to enter into the EPCs. EPCs in the public sector are now defined as follows: EPC for the public sector are contracts, where the liabilities of the contract do not affect public debt. The EE law describes the basic rights and obligations of the public entity under the EPC contract.

The legislative changes modify the energy efficiency contract in the public sector in line with Eurostat methodology. Public authorities wishing to avoid the impact on the debt limits should use the Template contract published under this Act.

It is worth stressing that in the case of buildings' modernization, i.e. insulation, windows replacement, the public entity is the legal owner of the constructed energy improvements. There is the unlimited right of disposal held by the owner or administrator of the building, the public entity, as a contracting party, must ensure compliance with its contractual obligations.

This is also linked to situations in which the early termination of the contract is unavoidable. Early termination of a contract is always linked to a claim for compensation for ESCO, but the amount depends on the reasons for termination. Therefore, the legislative changes define the general principles that must be followed in case of early termination. 

It is expected that EPCs will be highly used by municipalities. In order to make the EPC market more transparent, the municipality council has to approve Intention that there is an interest to modernize buildings or facilities owned by municipality using the EPC model. 

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