COMPETITION COUNCIL PASSED THE RESOLUTION CONCERNING THE DECISION OF THE PANEVĖŽYS MUNICIPALITY COUNCIL

The Competition Council examined the findings and conclusions of the investigation conducted in respect of the decision of 25 September 2003 of the Panevėžys Municipality Council “On the approval of the special plan of the municipal heat sector”. The Competition Council resolved that the decision contradicts the requirements of Article 4 of the Law on Competition. The Panevėžys Municipality Council was obligated within the established timeframe to amend the decision ensuring its compliance with the requirements of Article 4 of the Law on Competition.

The investigation concluded that the decision of 25 September 2003 of the Panevėžys Municipality Council “On the approval of the special plan of the municipal heat sector” was passed in violation of the provisions of the Law on Competition since it granted certain preferential terms for AB Panevėžio energija in the heat energy source market and therefore discriminated the gas company AB Lietuvos dujos. The decision of the Panevėžys Municipality Council created different competitive conditions for undertakings competing in the market for heat energy sources, since one undertaking was allocated almost entire town territory with developed pipeline infrastructure wherein the undertaking could develop its activity and provide consumers with its product, - the centrally generated heat; the decision considerably restricted the possibilities of the other undertaking to market its product - gas. The differences in competition resulting from the decision of the Panevėžys Municipality Council have not been conditioned by any Lithuanian statutory norms. The investigation allowed a conclusion that laws and regulations governing the Lithuanian energy sector and territorial planning do not contain any provisions prioritising a certain heat energy source, neither they provide for a possibility to restrict competition in individual energy sectors, or any other provisions rendering the avoidance of the different competition conditions impossible.

In accordance with the approved special plan of the Panevėžys heat sector the entire municipal territory with the developed infrastructure of heat, gas and power pipelines was divided into 20 zones, - 16 zones in the existing and 4 in the prospective districts under development. Under the provisions of the above decision all zones, including those in the newly developed regions were designated an area to be served by the sole district heating supplier AB Panevėžio energija, without providing for a possibility of alternative energy sources in none of the zones.