Serbia: Policy and planning measures for greater satisfaction of district heating customers in Niš

Benefits

  • Decreased number of disconnections by 87%, from 137 (2014/15), to only 6 (2019/20).
  • Decreased average heat consumption in multi-apartment buildings with CBB by 25% in 6 years, from 92.50 kWh/m2 /an (2013/14) to 69. 43 kWh/m2 /an (2019/20).
  • Decrease in the number of call centre calls by 30%, from 10420 (2014/15) to 7360 (2019/20)

Challenge

In 2013, the city of Niš became one of the first cities in Serbia that changed the district heating billing method. Consumption-based billing (CBB) replaced the flat rate billing based on heating area in all buildings. In the initial phase of implementation, the new approach of billing was not accepted by consumers as they experienced higher heating bills. In the period 2015 to 2017, consumers of district heating in Niš organised several protests. Some complaints were related to the incorrect implementation of the Rulebook on heat cost allocation applied by some of the external companies engaged for reading the meters and allocating the costs. Moreover, consumers that have not agreed to install individual heat meters were penalised, and this increased their bill by a certain coefficient. Consequently, consumers were dissatisfied with the limited possibility of disconnection of individual apartments from the district heating network. The district heating company and the local authorities had to address the problems, and find a way to reconcile the dissatisfaction of consumers with a proper and energy efficient method of billing. 

Summary

  • In 2011, Niš became the first Serbian city to sign the Covenant of Mayors. It developed the Sustainable Energy Action Plan – SEAP and fulfilled all obligations arising from it. One of the obligations imposed on the city of Niš through the SEAP was monitoring and control of the energy consumption in buildings.
  • Regulations (decisions on heat supply, tariff system, heat cost allocation rules and on connection) adopted at a local level were changed frequently (more than 30 times in several years), to address consumer complaints.
  • District heating prices are monitored and, if necessary, adjusted each month for reason of fuel price change, despite the complexity of the process and the administrative burden.
  • There is no difference in the prices charged to residential and commercial consumers.
  • Maximum allowed bill for households in multi-apartment buildings is 120% of average heat consumption, which is actually applied in buildings with low energy efficiency
  • The district heating company is holding regular meetings with consumer representatives.  A representative of citizens is a member of the Supervisory board and the Advisory body for pricing. Changes of legislation are subject to public debates.
  • In 2015, under the pressure of consumers, disconnection was allowed without the requirement of acquiring consents of other co-owners of the building. Later on, this rule was changed because of the impact of the high number of disconnections on the heating network, and the need to align this with the Law on Housing and Maintenance of Buildings
  • Consumers can use online tools for checking bills, submitting different requests, notifying change of apartment ownership, obtaining a model contract for heat supply, etc.

Lessons learned

Despite the many obstacles incurred at the beginning, the consumption-based billing in Niš eventually led to benefits and optimization of operations, and most importantly the greater satisfaction of consumers.

Some practical suggestions for avoiding problems in implementing consumption-based billing:

  • Enhanced communication with consumers and solving problems jointly.
  • Supporting financial schemes for improving energy efficiency of buildings.
  • Obtaining technical support for drafting needed legislation.

Next steps

  • Adopting a new Sustainable Energy and Climate Action Plan SECAP 2021-2030  under the Covenant of Mayors umbrella
  • Implementing a plan for improving energy efficiency in buildings, by thermal insulation and installation of individual heat meters.