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LAW OF THE REPUBLIC OF KAZAKHSTAN

of December 27, 2018 No. 204-VI ZRK

About natural monopolies

(as amended on 01-04-2021)

Chapter 1. General provisions

Article 1. Purposes of this Law

The purposes of this Law are:

1) achievement of balance of consumer interests and subjects of natural monopolies;

2) determination of the legal basis of state regulation of activities in spheres of natural monopolies;

3) ensuring availability of regulated services to consumers;

4) ensuring protection of consumer interests and subjects of natural monopolies;

5) ensuring publicity and transparency of procedures of state regulation of activities in spheres of natural monopolies;

6) stimulation of improvement of quality of regulated services and satisfaction of demand for them.

Article 2. Legislation of the Republic of Kazakhstan on natural monopolies

1. The legislation of the Republic of Kazakhstan on natural monopolies is based on the Constitution of the Republic of Kazakhstan and consists of this Law and other regulatory legal acts of the Republic of Kazakhstan.

2. If the international treaty ratified by the Republic of Kazakhstan establishes other rules, than those which contain in this Law then are applied rules of the international treaty.

Article 3. Operation of this Law

1. This Law extends to the relations arising in the market of the services of the Republic of Kazakhstan provided by subjects of natural monopolies.

2. The relations which are not covered by this Law are regulated by the legislation of the Republic of Kazakhstan in the field of entrepreneurship and other legislation of the Republic of Kazakhstan.

3. To the subject of natural monopoly providing the regulated services referred by this Law to spheres of natural monopolies, state regulation of activities and the state control are applied only to provision of regulated services.

4. Operation of this Law does not extend to the individual entrepreneurs and legal entities performing the activities referred to spheres of natural monopolies in one of the following cases when:

1) activities are connected with construction and operation of the objects intended only for own needs;

2) the activities provided by the subitem 2) of Item 1 of article 5 of this Law with observance in total of the following conditions are performed:

income from such activities shall not exceed 1 percent of the income from all activities in one calendar year;

preserving level of the rate operating for January 1, 2012.

Article 4. The basic concepts used in this Law

In this Law the following basic concepts are used:

1) The Government for Citizens State corporation (further - the State corporation) - the legal entity created according to the decision of the Government of the Republic of Kazakhstan for rendering the state services, services in issue of specifications on connection to networks of subjects of natural monopolies and services of subjects of the quasi-public sector according to the legislation of the Republic of Kazakhstan, the organization of work on reception of applications on rendering the state services, services in issue of specifications on the connection to networks of subjects of natural monopolies, services of subjects of the quasi-public sector and issue of their results to uslugopoluchatel by the principle of "one window", and also ensuring rendering the state services electronically performing state registration of the rights to real estate in the place of its stay;

2) inappropriate use of means of the depreciation charges - the direction of the means provided in the approved rate and (or) the approved tariff estimate due to the depreciation charges on the purposes which are not connected with capital investments in the fixed assets used in provision of regulated service and return of principal debt on the attracted credit resources;

3) controlled costs - the costs of the subject of natural monopoly connected with provision of regulated service which size depends on activities of the subject of natural monopoly;

4) uncontrollable costs - the costs of the subject of natural monopoly connected with provision of regulated service which size does not depend on activities of the subject of natural monopoly;

5) the metering device - the technical device intended for commercial accounting of individual and (or) all-house consumption of regulated services, allowed for use according to the procedure, determined by the legislation of the Republic of Kazakhstan;

6) public hearings - the procedure of discussion of the project of rate, regulations of consumption of utilities in spheres of natural monopolies for the consumers who do not have metering devices and carrying out reports before consumers and other interested persons;

7) investing program - the actions plan on attachment and return of the funds allocated for expansion, upgrade, reconstruction, updating, maintenance of the existing assets and creation of new assets of the subject of natural monopoly for the purpose of receipt of the technical and economic and (or) ecological effects expressed in achievement of target indicators of investing program or preserving indicators of activities of the subject of natural monopoly at the existing level;

8) indexation method - forming of rate by annual indexation of the approved rate by the subject of natural monopoly of low power;

9) public monitoring - the mechanism of observation by public organizations and other interested persons of course of execution of the approved investing program, observance of indicators of quality and reliability of regulated services and achievement of performance indicators of activities of subjects of natural monopolies;

10) the subject of natural monopoly of low power - the subject of natural monopoly providing regulated services:

on production, transfer, distribution and (or) supply with heat energy from heating boiler rooms with general installed capacity to twenty Gcal/hour inclusive;

water supply and (or) water disposal in amount to five hundred thousand cubic meters a year;

on water supply for irrigation in amount to thirty million cubic meters a year;

sidings in amount to fifty thousand the car/km, car/hour in year in the absence of competitive siding;

on transfer of electrical energy in amount to twenty five million kW hour a year;

the airports in case of the number of served passengers at the airport less than three hundred thousand people a year.

The subject of natural monopoly on the provided regulated service, the income from which does not exceed 5 percent of the income from all regulated services of the subject of natural monopoly in one calendar year, also concerns the subject of natural monopoly of low power. At the same time on the remained regulated services the subject of natural monopoly does not concern the subject of natural monopoly of low power;

11) price limits on regulated services of the high-level railway networks - the maximum and minimum levels of rates in the form of indexes to rates for regulated services of the high-level railway networks;

12) the request - the appeal of the subject of natural monopoly to authorized body about approval of rate;

13) regulated services - the goods, works, the services provided by subjects of natural monopolies in spheres of natural monopolies and which are subject to state regulation by authorized body;

14) forecast index of rate - the indicator determining the admissible level of rate by calculation of its forecast;

15) indicators of quality and reliability of regulated services - the set of criteria for evaluation of regulated services including technology and other objective process parameters of provision of regulated services to consumers, subjects including independent external assessment;

16) strategic goods:

the coal, gas, fuel oil and diesel fuel used in fuel quality for production of heat energy by subjects of natural monopolies;

electrical energy - for subjects of natural monopolies in spheres of transfer of electrical energy, water supply and (or) water disposal;

heat energy - for subjects of natural monopolies in the field of supply with heat energy and for normative losses in the field of transfer and distribution of heat energy;

gas - for own needs and losses for subjects of natural monopolies in spheres of storage, transportation of commodity gas on connecting, trunk gas pipelines and (or) gas-distribution systems, operation of group reservoir installations, and also transportations of sour gas through connecting gas pipelines;

water - for subjects of natural monopolies in spheres of water supply, production of heat energy;

17) producers of strategic goods - physical persons and legal entities:

the making strategic goods;

being owners of raw materials for production (conversion) of strategic goods;

directly on behalf of the foreign producer the implementing strategic goods in the territory of the Republic of Kazakhstan;

18) natural monopoly - market situation of goods, works, services in case of which creation of competitive conditions for satisfaction of demand for certain type of goods, works, services is impossible or economically inexpedient owing to technology features of production and provision of this type of goods, works, services;

19) utilities in spheres of natural monopolies - the regulated services of water supply and (or) water disposal, supply with heat energy for the purposes of heating and (or) hot water supply provided by subjects of natural monopolies in buildings;

20) performance indicators of activities of subjects of natural monopolies - the ratio of results of activities of the subject of natural monopoly and its economic, management, production costs considered when forming rate;

21) the subject of natural monopoly - the individual entrepreneur or the legal entity providing to consumers regulated services;

22) rate - monetary value of cost of regulated service;

23) method of tariff regulation of the sphere of natural monopoly - the method applied when forming rate;

24) costly method of tariff regulation - method of forming of rate depending on item by item certain, economically reasonable costs and profit of the subject of natural monopoly;

25) the stimulating method of tariff regulation - method of forming of rate depending on observance of indicators of quality and reliability of regulated services and achievement of performance indicators of activities of subjects of natural monopolies;

26) the tariff estimate - the list of the income, expenses and amounts of the provided regulated service in the form approved by authorized body;

27) differentiation of rate - establishment of different levels of rate depending on consumption conditions, including customer group;

28) rectilinear accrual method of depreciation - the depreciation method by which the annual depreciation amount is determined by division of cost which will be amortized on useful life of fixed asset object and intangible assets;

29) the consumer - the physical person or legal entity using or intending to use regulated services;

30) the temporary compensating rate - the rate approved by authorized body for certain term for the purpose of return of means to consumers;

31) temporary decreasing coefficient - the size approved by authorized body and applied to rate for the purpose of protection of consumer interests and the subject of natural monopoly;

32) authorized body - the state body performing management in the respective spheres of natural monopolies;

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