On natural monopolies

Law of the Republic of Kazakhstan dated December 27, 2018 No. 204-VІ.

      Unofficial translation

Chapter 1. GENERAL PROVISIONS

Article 1. Objectives of this Law

      The objectives of this Law shall be:

      1) achievement of a balance of interests of consumers and subjects of natural monopolies;

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

      3) ensuring the availability of regulated services for consumers;

      4) ensuring the protection of the interests of consumers and subjects of natural monopolies;

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

      6) stimulation of improving the quality of the regulated services and meeting the 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 shall be based on the Constitution of the Republic of Kazakhstan and consist of this Law and other regulatory legal acts of the Republic of Kazakhstan.

      2. If an international treaty ratified by the Republic of Kazakhstan establishes other rules than those contained in this Law, the rules of the international treaty shall apply.

      Article 3. Effect of this Law

      1. This Law shall apply to the relations arising in the market of services of the Republic of Kazakhstan rendered by the subjects of natural monopolies.

      2. Relationships not covered by this Law shall be governed by the legislation of the Republic of Kazakhstan in the field of entrepreneurship and other laws of the Republic of Kazakhstan.

      3. The state regulation of activity and state control shall apply to the subject of natural monopoly, rendering the regulated services, referred by this Law to the spheres of natural monopolies, only in relation to the provision of regulated services.

      4. This Law shall not apply to individual entrepreneurs and legal entities carrying out activities related to the spheres of natural monopolies in one of the following cases when:

      1) the activity is associated with the construction and operation of facilities intended solely for their own needs;

      2) the activities stipulated in subparagraph 2) of paragraph 1 of Article 5 of this Law are carried out, in compliance with the following conditions:

      revenues from such activity should not exceed 1 percent of revenues from all activities per one calendar year;

      preservation of the tariff level that was in effect on January 1, 2012.

Article 4. Basic concepts used in this Law

      The following basic concepts shall be used in this Law:

      1) The State Corporation "Government for Citizens" (hereinafter - the State Corporation) - a legal entity, established by the decision of the Government of the Republic of Kazakhstan to render public services, services for issuing technical conditions for connecting the subjects of natural monopolies to the networks and services of subjects of quasi-public sector in accordance with the legislation of the Republic of Kazakhstan, organization of work for receiving applications for provision of public services, services for issuing technical conditions for connecting the subjects of natural monopolies to networks, services of subjects of quasi-public sector and issuance of their results to the service recipient on the principle of "one window", as well as ensuring the provision of public services in electronic form, carrying out state registration of rights to real estate at its location;

      2) inappropriate use of depreciation funds - the allocation of funds, provided for in the approved tariff and (or) the approved tariff estimate, at the expense of depreciation funds for purposes not related to investments in fixed assets, used in the provision of the regulated service and return of the principal debt on the attracted credit resources;

      3) controlled expenses – the expenses of a subject of natural monopoly, related to the provision of a regulated service, the amount of which depends on the activities of the subject of natural monopoly;

      4) uncontrollable expenses - the expenses of a subject of natural monopoly, associated with the provision of a regulated service, the amount of which does not depend on the activities of the subject of natural monopoly;

      5) metering device - a technical device, designed for the commercial accounting of individual and (or) general household consumption of regulated services, allowed for use in the manner, determined by the legislation of the Republic of Kazakhstan;

      6) public hearings - a procedure of discussing the draft tariff, the norms of consumption of public services in the spheres of natural monopolies for consumers who do not have metering devices, and making reports to the consumers and other interested parties;

      7) an investment program - an action plan for investing and returning funds, allocated for the expansion, modernization, reconstruction, renewal, maintenance of existing assets and creation of new assets of a subject of natural monopoly in order to obtain technical and economic and (or) environmental effects, expressed in achieving targeted indicators of the investment program or the preservation of the performance indicators of a subject of natural monopoly at the existing level;

      8) indexation method - the formation of a tariff by annual indexation of the approved tariff by a subject of natural monopoly of small capacity;

      9) public monitoring - a mechanism for monitoring by public organizations and other interested parties of the progress of an approved investment program, compliance with quality and reliability indicators for the regulated services and achievement of performance indicators of subjects of natural monopolies;

      10) a subject of a natural monopoly of small capacity - a subject of a natural monopoly, rendering the regulated services:

      for production, transmission, distribution and (or) supply of thermal energy from heating boilers with a total installed capacity of up to twenty Hcal / hour inclusive;

      water supply and (or) water disposal up to five hundred thousand cubic meters per year;

      irrigation water supply up to thirty million cubic meters per year;

      access roads of up to fifty thousand wagon / km, wagon / hour per year in the absence of a competitive access road;

      on the transfer of electrical energy of up to twenty-five million kWh per year;

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

      The subject of a natural monopoly of small capacity shall also include a subject of natural monopoly for 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 for one calendar year. At that, in the remaining regulated services, the subject of a natural monopoly shall not relate to the subject of a natural monopoly of small capacity;

      11) price limits for regulated services of mainline railway networks - maximum and minimum tariff levels in the form of indices to tariffs for regulated services of mainline railway networks;

      12) an application – an appeal of the subject of natural monopoly to the authorized body to approve the tariff;

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

      14) forecast tariff index - an indicator that determines the allowable tariff level by calculating its forecast;

      15) indicators of quality and reliability of regulated services - a set of criteria for evaluating regulated services, including technological and other objective parameters of the process of providing regulated services to consumers, which are also subject to independent external evaluation;

      16) strategic goods:

      coal, gas, fuel oil and diesel fuel used as fuel for production of thermal energy by subjects of natural monopolies;

      electric energy - for subjects of natural monopolies in the areas of electricity transmission, water supply and (or) water disposal;

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

      gas - for own needs and losses for subjects of natural monopolies in the areas of storage, transportation of marketable gas through connecting, main gas pipelines and (or) gas distribution systems, operation of group tank installations, as well as transporting raw gas through connecting gas pipelines;

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

      17) manufacturers of strategic goods - individuals and legal entities:

      producing strategic goods;

      who own the raw materials for the production (processing) of strategic goods;

      directly on behalf of a foreign manufacturer selling strategic goods in the territory of the Republic of Kazakhstan;

      18) a natural monopoly - the state of the market for goods, works, services in which the creation of competitive conditions to meet the demand for a certain type of goods, works, services is impossible or economically inexpedient due to the technological features of production and the provision of this type of goods, works, services;

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

      20) indicators of effectiveness of activities of subjects of natural monopolies - the ratio of the results of activities of the subject of natural monopoly and its economic, managerial, production costs, taken into account when forming the tariff;

      21) a subject of natural monopoly - an individual entrepreneur or a legal entity that renders regulated services to consumers;

      22) a tariff - the monetary value of the regulated service;

      23) a method of tariff regulation of the sphere of natural monopoly - a method used in formation of the tariff;

      24) the cost method of tariff regulation - the method of forming the tariff, depending on the itemized, economically justified costs and profits of the subject of natural monopoly;

      25) the incentive method of tariff regulation - the method of forming the tariff, depending on compliance with the indicators of quality and reliability of the regulated services and the achievement of performance indicators of the activities of the subjects of natural monopolies;

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

      27) tariff differentiation - the establishment of different tariff levels, depending on the conditions of consumption, including a group of consumers;

      28) straight-line depreciation method - the depreciation method, according to which the annual depreciation amount is determined by dividing the cost, which is depreciated into the useful life of object of the fixed asset and intangible assets;

      29) a consumer - an individual or legal entity using or intending to use the regulated services;

      30) temporary compensatory tariff - a tariff, approved by the authorized body for a specified period in order to return funds to consumers;

      31) temporary reduction factor - the value, approved by the authorized body and applied to the tariff in order to protect the interests of consumers and the subject of the natural monopoly;

      32) an authorized body - a state body exercising leadership in the relevant spheres of natural monopolies;

      33) e-government web portal - an information system that represents a “single window” of access to all consolidated government information, including the regulatory legal framework, and public services, the services of issuing technical conditions for connecting a subject of natural monopoly to networks and services of subjects of quasi-public sector, rendered in electronic form.

Article 5. Spheres of natural monopolies

      1. The spheres of natural monopolies in the Republic of Kazakhstan shall include the regulated services:

      1) on transportation of oil and (or) oil products through main pipelines, except for their transportation for transit through the territory of the Republic of Kazakhstan and export outside the Republic of Kazakhstan;

      2) on storage, transportation of commercial gas through connecting, main gas pipelines and (or) gas distribution systems, operation of group tank installations, as well as transportation of raw gas through connecting gas pipelines, except for storage and transportation of commercial gas for transit through the territory of the Republic of Kazakhstan and export outside the Republic of Kazakhstan;

      3) on the transfer of electrical energy;

      4) for the production, transmission, distribution and (or) supply of thermal energy, except for thermal energy, generated using the heat of the soil, groundwater, rivers, reservoirs, waste water of industrial enterprises and power plants, sewage treatment facilities;

      5) on technical dispatching of supply to the network and consumption of electric energy;

      6) on the organization of balance of the production and consumption of electric energy;

      7) main railway networks, except for the regulated services of main railway networks during transportation of goods in containers, the transportation of empty containers and the transit transportation of goods through the territory of the Republic of Kazakhstan;

      8) railway lines with railway transport facilities under public-private partnership contracts, including concession contracts, in the absence of a competitive railway line;

      9) access roads in the absence of a competitive access road;

      10) air navigation, except for the air navigation services for international and transit flights;

      11) ports in the absence of competition in the port services market;

      12) airports, except for the air transportation services, making transit flights through the airspace of the Republic of Kazakhstan with the technical landings at airports of the Republic of Kazakhstan for non-commercial purposes and in international directions;

      13) for property lease (rental) or the use of cable sewage, except for the activities of small businesses;

      14) water supply and (or) water disposal.

      2. Subjects of natural monopolies shall be subject to inclusion in the State Register of subjects of natural monopolies with indication of regulated services.

      3. The expansion of the spheres of natural monopolies shall be carried out in accordance with the international treaties, ratified by the Republic of Kazakhstan.

Chapter 2. GOVERNMENTAL REGULATION OF ACTIVITY IN THE SPHERES OF NATURAL MONOPOLIES

Article 6. State regulation of activities in the spheres of natural monopolies

      State regulation of activities in the spheres of natural monopolies shall be carried out by:

      1) formation of the State Register of subjects of natural monopolies;

      2) formation, establishment and approval of the tariff;

      3) determination of the methods of tariff regulation of the spheres of natural monopolies;

      4) issuance of consent to perform certain actions by a subject of natural monopoly, as well as acceptance of a notice from the subject of natural monopoly on performance of the activities not related to the regulated services, in accordance with the Law of the Republic of Kazakhstan “On permits and notifications”;

      5) formation of the list of regulated services.

Article 7. Competence of the Government of the Republic of Kazakhstan

      The Government of the Republic of Kazakhstan shall:

      1) develop the main directions of state policy in the spheres of natural monopolies and organize their implementation;

      2) perform other functions assigned to it by the Constitution of the Republic of Kazakhstan, this Law, other laws of the Republic of Kazakhstan and the acts of the President of the Republic of Kazakhstan.

Article 8. Competence of the authorized body

      The authorized body shall:

      1) carry out the state regulation of activities of subjects of natural monopolies in accordance with the Entrepreneurial Code of the Republic of Kazakhstan, this Law and the legislation of the Republic of Kazakhstan;

      2) implement the state policy in the spheres of natural monopolies;

      3) submit annually to the Government of the Republic of Kazakhstan the reports on the state of the spheres of natural monopolies, on the execution of the approved tariff estimates, on the implementation of the approved investment programs;

      4) form and maintain the State Register of subjects of natural monopolies;

      5) develop and approve the tariff setting rules;

      6) develop and approve the rules for the activities of the subjects of natural monopolies;

      7) develop and approve the standard contracts for provision of regulated services;

      8) accept an application for consideration or refuse to accept it;

      9) conduct public hearings with the publication in mass media of the announcement about the date and place of their holding;

      10) approve the tariff in the cases, provided for by this Law;

      11) determine the level of indexation of the tariff of the subject of the natural monopoly of small capacity;

      12) approve and make changes to the tariff estimate, approved by it;

      13) approve and make changes together with another state agency in the approved investment program of a subject of natural monopoly, included in the republican section of the State Register of the subjects of natural monopolies, except for the subjects of natural monopolies, rendering the regulated services provided for in subparagraphs 10), 12) and 13) of paragraph 1 of Article 5 of this Law;

      14) approve and make changes together with the local executive body in the approved investment program of a subject of natural monopoly, included in the local section of the State Register of the subjects of natural monopolies;

      15) approve the temporary compensation tariff;

      16) issue a consent to perform certain actions by a subject of natural monopoly, and also receive a notification from the subject of natural monopoly on the implementation of activities not related to regulated services, in accordance with the Law of the Republic of Kazakhstan "On permits and notifications";

      17) develop and approve indicators of quality and reliability of regulated services in coordination with the relevant state bodies;

      18) develop and approve the performance indicators of the activities of the subjects of natural monopolies;

      19) request and receive information necessary to exercise its powers from individuals and legal entities, including state bodies, local self-government bodies, as well as their officials;

      20) submit an order to the subject of natural monopoly on elimination of violation of the legislation of the Republic of Kazakhstan on natural monopolies;

      21) go to court in cases of violation of this Law;

      22) analyze the reports of subjects of natural monopolies on the execution of the approved tariff estimates, on the execution of the approved investment program, on compliance with the indicators of quality and reliability of the regulated services, as well as on the achievement of performance indicators of the activities of the subjects of natural monopolies;

      23) consider appeals of subjects of natural monopolies and consumers;

      24) agree on the tender documentation of a public-private partnership project, including a concession project, draft public-private partnership contract, including a concession contract, making amendments and (or) additions to them in terms of tariff formation;

      25) make a change to the approved tariff estimates without raising the tariff in the case of taking on the balance and (or) trust management of the property, used in the technological cycle in the provision of regulated services from the state or local executive bodies when it is received for free use, including electrical networks from other energy transmission organizations;

      26) approve a temporary reduction factor;

      27) determine the forecast tariff index for a five-year period in the spheres of natural monopolies;

      28) approve the amount of payments for utilities in the spheres of natural monopolies for consumers who do not have metering devices;

      29) approve the price limits for the regulated services of the main railway networks;

      30) adjust the annually approved price limits for the regulated services of the main railway networks in accordance with the rules for the tariff formation;

      31) determine the method of tariff regulation of the sphere of natural monopoly;

      32) approve the list of regulated services;

      33) approve the list of subjects of natural monopolies, whose tariffs are approved using the incentive method of tariff regulation;

      34) hold a reception of consumers at least once a month, together with the subjects of natural monopolies;

      35) recommend the local executive bodies the norms for consumption of public services in the spheres of natural monopolies for consumers who do not have metering devices;

      36) recommend the subject of a natural monopoly the amount of payment for the purchase and installation of metering devices in accordance with subparagraph 8) of paragraph 23 of Article 15 of this Law, except for the cases of acceptance and commissioning of construction objects;

      37) exercise other powers provided for by this Law, other Laws of the Republic of Kazakhstan, acts of the President of the Republic of Kazakhstan and the Government of the Republic of Kazakhstan.

Article 9. Competence of other state bodies

      State bodies in the field of energy, railway transport, production, transportation (carriage), storage and wholesale of gas, as well as retail sales and consumption of commercial and liquefied petroleum gas, use and protection of water resources, water supply, water disposal shall:

      1) participate, within their competence, in the implementation of state policy in the spheres of natural monopolies;

      2) approve and make changes together with the authorized body to the investment program of a subject of natural monopoly, included in the republican section of the State Register of subjects of natural monopolies, as well as a subject of natural monopoly, included in the local section of the State Register of subjects of natural monopolies on regulated services of access roads in the absence of a competitive access road;

      3) exercise other powers provided for by this Law, other Laws of the Republic of Kazakhstan, acts of the President of the Republic of Kazakhstan and the Government of the Republic of Kazakhstan.

Article 10. Competence of local executive bodies of regions, cities of republican significance, the capital

      Local executive bodies of regions, cities of republican significance, the capital shall:

      1) participate, within their competence, in the implementation of state policy in the spheres of natural monopolies;

      2) approve and make changes together with the authorized body to the investment program of a subject of natural monopoly, included in the local section of the State Register of subjects of natural monopolies, except for the subjects of natural monopolies, rendering the regulated services provided for in subparagraphs 9), 10), 12) and 13) of paragraph 1 of Article 5 of this Law;

      3) in agreement with the authorized body, approve the norms of consumption of public services in the spheres of natural monopolies for consumers who do not have metering devices, and a month before they are approved, they hold public hearings;

      4) in the interests of local government, carry out other powers imposed on local executive bodies by the legislation of the Republic of Kazakhstan.

Article 11. Formation of the State Register of subjects of natural monopolies

      1. The State Register of subjects of natural monopolies shall be a list of individual entrepreneurs and legal entities, rendering regulated services, formed by an authorized body.

      Provision of regulated services by persons not included in the State Register of subjects of natural monopolies shall not be allowed.

      2. An individual entrepreneur or a legal entity providing regulated services shall apply to the authorized body with an application on inclusion in the State Register of subjects of natural monopolies not later than fifteen calendar days from the date of the commencement of provision of the regulated service to the consumers.

      3. The formation and maintenance of the State Register of subjects of natural monopolies shall be carried out through including and excluding subjects of natural monopolies from it.

      4. The State Register of subjects of natural monopolies shall consist of republican and local sections.

      5. The republican section of the State Register of subjects of natural monopolies shall include the subjects of natural monopolies that render the regulated services in two or more regions, cities of republican significance and the capital.

      Local sections of the State Register of subjects of natural monopolies shall include the subjects of natural monopolies that render the regulated services in the territory of one region or city of republican significance, or the capital.

      Subjects of natural monopolies that render the regulated air navigation services, ports, airports, for renting (rent) or using cable channels, shall be included in the republican section of the State Register of subjects of natural monopolies.

      6. A subject of natural monopoly shall be included in the State Register of subjects of natural monopolies at the place of registration of an individual entrepreneur or legal entity, except for a foreign legal entity, which is subject to inclusion in the State Register of subjects of natural monopolies at the place of provision of the regulated service.

      7. In the event of termination of the provision of a regulated service, a subject of natural monopoly, not later than fifteen calendar days, shall submit an application to the authorized body on its exclusion from the State Register of subjects of natural monopolies.

Article 12. Methods of tariff regulation of spheres of natural monopolies

      1. When forming the tariff, the following methods of tariff regulation of spheres of natural monopolies shall be applied:

      1) cost;

      2) incentive;

      3) indexation;

      4) determination of the tariff on the basis of a public-private partnership contract, including a concession contract.

      2. The method of tariff regulation of the sphere of natural monopoly shall be applied if the following conditions are observed in aggregate:

      1) economic and technological readiness of the subject of natural monopoly to use the corresponding method of tariff regulation of the sphere of natural monopoly;

      2) prevention of imposing of duties on the subject of natural monopoly and consumers, which cannot be fulfilled by them.

Article 13. Issuance of consent to perform certain actions by subject of natural monopoly

      1. A subject of natural monopoly shall be obliged to obtain the consent of the authorized body:

      1) for making transactions with the property, used to provide the regulated service, if the balance sheet value of the property recorded in the balance sheet at the beginning of the current year exceeds 0.05 percent of the balance sheet value of its assets in accordance with the balance sheet at the beginning of the current year;

      2) for reorganization or liquidation.

      2. The issuance of consent for the subject of natural monopoly to perform certain actions, provided for by paragraph 1 of this article, shall be refused in cases where:

      1) it will lead to an increase in the tariff;

      2) it will lead to violation of contracts with consumers;

      3) it will lead to infringement of the rights and legitimate interests of consumers;

      4) it will lead to the violation of an inextricably linked technological system for providing a regulated service or a reduction in the quality of a regulated service;

      5) an incomplete package of documents, provided for by paragraphs 3 and 4 of this article has been submitted, or the documents provided contain false information (data).

      3. To obtain the consent of the authorized body to make transactions with the property, used to provide the regulated service, if the balance value of the property recorded in the balance sheet at the beginning of the current year exceeds 0.05 percent of the balance value of its assets in accordance with the balance sheet at the beginning of the current year, the subject of natural monopoly shall submit a petition with an attachment-confirmation from the balance sheet at the beginning of the current year, signed by the head of the subject of natural monopoly, indicating the name, type, kind, inventory number, the initial, residual value of the alienated property in the context of the alienated objects.

      4. A subject of natural monopoly, in order to obtain the consent of the authorized body for reorganization or liquidation, shall submit petition with the application of:

      1) copies of the deed of transfer - at merger, accession, transformation;

      2) copies of the separation balance sheet - at separation, appropriation;

      3) copies of the liquidation balance sheet - upon liquidation.

      5. To perform certain actions provided for by paragraph 1 of this article, a subject of natural monopoly shall be obliged to submit a petition to the authorized body on the consent to take such actions in the form, established in accordance with the rules for performance of activities by subjects of natural monopolies, and documents in accordance with paragraphs 3 and 4 of this article.

      A subject of natural monopoly of small capacity, prior to reorganization or liquidation, shall be obliged to send information to the authorized body about its intention to perform the indicated actions within ten calendar days.

      6. The documents attached to the petition shall be submitted by the subject of natural monopoly according to the inventory.

Article 14. Procedure for notifying the authorized body by the subject of natural monopoly about the activities not related to regulated services

      1. A subject of natural monopoly, not later than ten working days from the day the activity is performed that is not related to regulated services, shall notify the authorized body about it.

      2. Notification about performance of activity by a subject of natural monopoly that is a non-regulated service can be submitted (sent) either directly to the authorized body or through the state information system of permits and notifications.

Chapter 3. TARIFF FORMATION

Article 15. Procedure for tariff formation

      1. A tariff should ensure the reimbursement of costs for provision of a regulated service and the receipt of profits allocated for the development and effective functioning of a subject of natural monopoly and other purposes not prohibited by the legislation of the Republic of Kazakhstan.

      2. A tariff shall be established for a period of five years or more, except for the cases, provided for by this Law.

      3. In case of expiration of the tariff, the subject of natural monopoly shall render the regulated services at the tariff approved by the authorized body, excluding funds, allocated for implementation of the approved investment program (depreciation and profits), except for the funds directed to repay the principal debt on loans, attracted for implementation of the approved investment program.

      4. For approval of the tariff by the authorized body, the subject of natural monopoly shall submit an application.

      5. The application shall be submitted in an electronic form.

      6. The application shall be reviewed by the authorized body within ninety working days from the date of its submission.

      7. The application shall be attached with:

      1) the draft tariff (or price list, taking into account industry-specific features);

      2) the draft tariff estimates with the application of supporting materials in the form approved by the authorized body;

      3) an explanatory note about the need to approve the tariff;

      4) draft investment program or approved investment program;

      5) the estimated costs for repairs that do not lead to an increase in the value of fixed assets;

      6) financial statements for the two preceding calendar years;

      7) reports:

      about financial and economic activity, about investment activity;

      on the state of fixed assets, wage rates of employees in certain positions and professions and labor for the two preceding calendar years in accordance with the forms approved by the authorized body in the field of state statistics;

      8) itemized cost calculations;

      9) profit calculation;

      10) calculations of the number of personnel, the needs of raw materials, materials, fuel, energy and technical losses, made on the basis of standard norms and standards in force in the relevant industry (sphere);

      11) copies of decisions of the competitive (tender) commissions on the procurement of material and financial resources, equipment and goods, works, services for the previous calendar year;

      12) the calculation of depreciation on fixed assets, used before the implementation of the approved investment program (project) and put into operation during the implementation of the approved investment program (project) in the long-term period, broken down by years;

      13) supporting documents on the conditions of financing and repayment of borrowed resources;

      14) data on the design capacity of the subject of natural monopoly and its actual use;

      15) documents, confirming the planned volume of regulated services (a register of contracts indicating actual volumes of consumption of regulated services, documents confirming a decrease in the volume of consumption of regulated services, calculations of the volume of consumption of regulated services, based on the duty of quality general service and the capabilities of a subject of natural monopoly, the inadmissibility of a decrease of the volume in order to maintain or increase the level of tariffs, materials of marketing research of consumer demand);

      16) documents, confirming actual data on costs and volumes of regulated services for the four quarters preceding the submission of the application and for the previous calendar year.

      When approving the tariff using the incentive method of tariff regulation, the application shall be attached with the documents, provided for in subparagraphs 1), 3), 4), 6), 7), 9), 10), 13), 14) and 15) of part one of this paragraph, as well as the draft indicators of the quality and reliability of the regulated services and performance indicators of the activities of subjects of natural monopolies with supporting materials attached.

      8. A subject of natural monopoly shall have the right to submit an application to the authorized body to approve the tariff using the incentive method of tariff regulation after the expiration of the approved tariff, except for the cases of approval of tariffs using the incentive method of tariff regulation for the subjects of natural monopolies, the list of which is determined by the authorized body.

      9. The authorized body not later than seven working days from the date of receipt of the application shall check the completeness of the attached calculations and supporting materials for compliance with paragraph 7 of this article and shall inform the subject of natural monopoly in writing about the acceptance of the application for consideration or refusal to accept it, indicating the reasons for refusal in accordance with paragraph 11 of this article.

      10. The calculations and supporting materials attached in accordance with paragraph 7 of this article shall be submitted in compliance with the following procedures:

      1) they are stitched, numbered and signed by the head of a subject of natural monopoly or by its deputy, or the deputy head of a subject of natural monopoly. This requirement shall not apply to submission of an application in electronic form;

      2) they are prepared separately for each type of regulated services.

      11. The grounds for refusal to accept an application shall be:

      1) the failure of the subject of natural monopoly to submit the documents, provided for by paragraph 7 of this article;

      2) incompliance of the submitted documents with paragraph 10 of this article;

      3) classification of information, not provided for by paragraph 7 of Article 25 of this Law, as a commercial secret.

      12. If additional information is needed when considering an application, the authorized body shall have the right to request it from a subject of natural monopoly in writing with a time limit, but not less than five working days.

      13. Public hearings shall be held by the authorized body when approving the tariff not later than thirty calendar days before approval of the tariff, when approving the tariff in a simplified manner, as well as in the cases, provided for in subparagraphs 4), 6), 7), 8) and 9) of paragraph 1 of Article 22 of this Law - not later than ten calendar days prior to the approval of the tariff.

      14. A subject of natural monopoly shall, after publication of the announcement in the periodical print publication about the date and place of the public hearing, at the request of the participants of the public hearing, shall submit:

      a draft tariff and tariff estimates;

      information about the reasons for changing the tariff with economically reasonable calculations.

      15. Based on the results of consideration of the application, the authorized body shall have the right to adjust draft tariffs, tariff estimates and the investment program.

      16. If approved, the tariff can be differentiated depending on:

      1) the presence or absence of the consumer’s metering device;

      2) consumer groups;

      3) the type of goods transported, the type of rolling stock, the distance of transportation, the volume (weight) of the transported goods.

      17. The decision on approval of the tariff shall be sent to the subject of the natural monopoly not later than five calendar days from the date the decision on its approval is made.

      The rationale for changes and clarification of cost items, profits and actions of the approved investment program, submitted by the subject of natural monopoly with the application, shall be sent with the decision to approve the tariff.

      18. A tariff shall be enacted not earlier than the first day of the second month following the month of tariff approval, except for the cases, provided for by this Law.

      19. A subject of natural monopoly shall be obliged to inform the consumer about the approval of the tariff not later than thirty calendar days prior to its entry into force.

      20. If the subject of natural monopoly does not inform the consumer about the introduction of the tariff within the terms established by this Law, then the specified tariff shall not be introduced from the date specified in the decision of the authorized body. The introduction of the approved tariff shall be carried out from the first day of the third month following the month of the tariff approval.

      21. A subject of natural monopoly shall have the right to apply to the authorized body with an application to change the approved tariff estimate without raising the tariff before November 1 of the current calendar year.

      22. Tariff formation rules shall determine:

      1) the tariff calculation mechanism taking into account the methods of tariff regulation of the spheres of natural monopolies, provided for by this Law;

      2) the procedure for approval of the temporary compensating tariff;

      3) the tariff differentiation procedure;

      4) the procedure for approval of the tariff in a simplified order;

      5) the procedure for approval of the investment program and its changes;

      6) the procedure for determining the tariff on the basis of a concluded public-private partnership contract, including a concession contract;

      7) the procedure for approval of a temporary reduction factor;

      8) the procedure for recording a separate accounting of revenues, costs and assets involved for each type of regulated services and in general for activities not related to the regulated services;

      9) the procedure for recalculating the cost of the regulated service for the supply of thermal energy, taking into account the actual outdoor temperature;

      10) the procedure for determining the permissible level of profit of the subject of the natural monopoly;

      11) the procedure for changing the tariff approved by the authorized body before its expiration date;

      12) a list of costs, taken into account and not taken into account in the tariff, the procedure for limiting the amount of costs that are taken into account in the tariff;

      13) tariff indexation procedure;

      14) forms of draft tariffs, tariff estimates, investment programs, reports on execution of the approved tariff estimates, on the execution of the approved investment program;

      15) the mechanism for calculating price limits for the regulated services of mainline railway networks and their annual adjustments;

      16) the procedure for applying price limits for the regulated services of mainline railway networks;

      17) the procedure for calculating and applying the forecast tariff index.

      23. The rules for performance of activities by subjects of natural monopolies shall determine:

      1) the order of inclusion and exclusion from the State Register of subjects of natural monopolies;

      2) the procedure for holding public hearings;

      3) the procedure for issuing consent to performance of certain actions by a subject of natural monopoly, as well as acceptance of a notice from the subject of natural monopoly on performance of activities not related to the regulated services, in accordance with the Law of the Republic of Kazakhstan "On permits and notifications";

      4) the procedure for procurements made by subjects of natural monopolies;

      5) the procedure for ensuring equal conditions of access to the regulated services;

      6) the procedure for making reports on the execution of the approved tariff estimates, on the execution of the approved investment programs, on compliance with the quality and reliability indicators of the regulated services and the achievement of performance indicators of subjects of natural monopolies to consumers and other interested parties;

      7) the procedure for placing information about the presence of free and available capacities, containers, places, capacities of networks of a subject of natural monopoly, as well as utilities networks in the spheres of natural monopolies, except for the information relating to the state secrets and other secrets protected by law in accordance with the laws of the Republic of Kazakhstan;

      8) the procedure for coordination of fees for the purchase and installation of metering devices;

      9) the procedure for the approval of performance indicators of the activities of subjects of natural monopolies;

      10) the procedure for exercising state control in the spheres of natural monopolies;

      11) forms of:

      applications for consent to make transactions with property, used to provide a regulated service, if the balance value of the property recorded in the balance sheet at the beginning of the current year exceeds 0.05 percent of the balance value of its assets in accordance with the balance sheet at the beginning of the current year, and reorganization or liquidation of a subject of natural monopoly;

      reports of the subject of natural monopoly to consumers and other interested parties:

      on the execution of the approved tariff estimates;

      on the execution of the approved investment program;

      on compliance with indicators of quality and reliability of the regulated services;

      on the achievement of performance indicators of subjects of natural monopolies;

      12) the procedure for informing the consumers and (or) the authorized body about the tariff, its change;

      13) the procedure for approval of quality and reliability indicators of regulated services;

      14) the procedure for the public monitoring and (or) technical expertise of the execution of the approved investment program, compliance with quality and reliability indicators for the regulated services and achievement of performance indicators of subjects of natural monopolies.

      24. Tariff formation methods shall be:

      1) the approval of the tariff by the authorized body;

      2) setting the tariff by a subject of natural monopoly;

      3) determination of the tariff on the basis of a public-private partnership contract, including a concession contract.

Article 16. The cost method of tariff regulation

      1. A tariff using the cost method of tariff regulation shall be approved by the authorized body for a period of five or more years by determining the economically reasonable costs and profits.

      2. The cost method of tariff regulation shall provide:

      1) limiting the types and amounts of costs, included in the tariff, taking into account their economic feasibility;

      2) the use of technical and technological standards for the consumption of raw materials, materials, fuel, energy, if any, normative technical losses, normative number of personnel, determined on the basis of standard norms and standards in force in the relevant industry (sphere);

      3) approval of tariff estimates broken down by year;

      4) the use of straight-line method of depreciation;

      5) procurement conducted by a subject of natural monopoly in accordance with article 23 of this Law and the rules for the conduct of activities by subjects of natural monopolies;

      6) determining the allowable profit level taking into account the balance sheet or revalued amount of assets of the subject of natural monopoly, involved in the provision of the regulated service and the profit rate, calculated by the method, determined by the authorized body, and the amount of funds, required for implementation of the approved investment program;

      7) approval of the investment program;

      8) approval of the temporary compensating tariff for non-performance of cost items of the approved tariff estimates, inappropriate use of depreciation funds and actions of the approved investment program.

Article 17. Incentive method of tariff regulation

      1. The tariff with the use of the incentive method of tariff regulation shall be approved by the authorized body for a period of five or more years, taking into account the quality and reliability indicators of regulated services and the performance indicators of activities of subjects of natural monopolies.

      2. The incentive method of tariff regulation shall provide:

      1) the limiting the types and amounts of costs that are included in the tariff, taking into account their economic feasibility;

      2) the use of technical and technological standards for the consumption of raw materials, materials, fuel, energy, if any, normative technical losses, normative number of personnel, determined on the basis of standard norms and standards in force in the relevant industry (sphere).

      The effect of this sub-paragraph shall be applied when approving the tariff in the event of a transition from the cost method of tariff regulation to the incentive method of tariff regulation;

      3) the determination of the controlled and uncontrolled costs;

      4) approval of a temporary compensating tariff for non-performance of actions of the approved investment program and uncontrolled costs;

      5) the determination of profit taking into account the return of invested capital and the rate of return on the invested capital and the balance value of the assets of the subject of natural monopoly, involved in the provision of a regulated service, and the profit rate calculated by the method determined by the authorized body;

      6) determination of quality and reliability indicators of regulated services;

      7) determination of indicators of efficiency of activity of subjects of natural monopolies;

      8) the use of straight-line method of depreciation;

      9) approval of the investment program.

Article 18. Indexation method

      1. The tariff using the indexation method shall be established annually by a subject of natural monopoly of small capacity by indexing the approved tariff not higher than the level determined by the authorized body.

      2. The level of tariff indexation shall be determined annually not later than two months before the beginning of the calendar year, taking into account the parameters of the socio-economic development of the Republic of Kazakhstan.

Article 19. Determination of the tariff on the basis of a public-private partnership contract, including a concession contract

      1. When considering a draft public-private partnership contract, including a concession project, the tariff should not be lower than the cost of providing the regulated service, and also ensure the return of investment made by the public partner and private partner and the level of return on investment in accordance with the feasibility study of the draft public-private partnership contract, including the concession project.

      2. The tariff shall be determined on the basis of a public-private partnership contract, including a concession contract, and an approved investment program in accordance with the rules for tariff formation.

      3. The tariff shall be determined at the initiative of the subject of public-private partnership, including the concessionaire, or the authorized body.

      4. The term of the tariff shall be set for a period not exceeding the period of implementation of the approved investment program and the public-private partnership contract, including the concession contract by the subject of a public-private partnership, including the concessionaire.

Article 20. Simplified tariff approval

      1. The authorized body shall approve the tariff in a simplified manner for the regulated service of:

      1) a subject of a natural monopoly, established for the first time;

      2) a subject of a natural monopoly, providing a new regulated service (new regulated services);

      3) in the case of the acquisition (construction) of new facilities and (or) sites, if the current tariff is approved separately for facilities and (or) sites;

      4) a subject of a natural monopoly of small capacity.

      2. The term for consideration of the application shall be not more than thirty calendar days from the date of its submission.

      3. The term of the tariff, approved in a simplified manner for the subjects of natural monopolies referred to in subparagraphs 1), 2) and 3) of paragraph 1 of this article, shall not exceed twelve months.

      4. The tariff approved in a simplified manner shall be effective from the first day of the month following the month the tariff is approved.

      5. Upon expiration of the tariff, approved in a simplified manner for the subjects of natural monopolies referred to in paragraph 1 of this article, the tariff shall be approved for one calendar year using the cost method of tariff regulation.

      In the case of an overestimation of the tariff approved in a simplified manner for the subjects of natural monopolies referred to in subparagraphs 1), 2) and 3) of paragraph 1 of this article, the authorized body, simultaneously with the introduction of new tariffs, must make a decision on compensation to consumers of the unjustifiably income received by subjects of natural monopolies.

      6. Subjects of natural monopolies referred to in paragraph 1 of this article, not later than five calendar days before the introduction of the tariff shall inform consumers about this with the provision of information containing the reasons for the change in tariff, the approved tariff estimates.

      7. A subject of natural monopoly whose assets were transferred to its ownership as a result of a transaction concluded or the sale of the debtor’s estate - a subject of natural monopoly declared bankrupt, shall continue to provide consumers with the regulated services at the tariff, approved for the previous owner of these assets until the new tariff is approved, but no more than six months from the date of receipt of the assets.

      8. The authorized body shall hold public hearings when approving the tariff in a simplified manner not later than ten calendar days before its approval.

Article 21. Approval of the investment program and its change

      1. The investment program shall be developed taking into account the development priorities and socio-economic indicators of the Republic of Kazakhstan and provide for activities aimed at:

      1) expansion, modernization, reconstruction, updating of existing assets, the creation of new assets directly used in the technological cycle of providing the regulated services;

      2) energy conservation and energy efficiency;

      3) improving the quality of the regulated services provided.

      2. The investment program shall be considered:

      1) by the authorized body for compliance by the subject of natural monopoly with the indicators of quality and reliability of regulated services and the achievement of performance indicators of the activities of the subjects of natural monopolies;

      2) by another state body or local executive body, the competencies of which are provided for in Articles 9 and 10 of this Law, regarding the technological feasibility and satisfaction of consumer demand for the regulated services in order to improve the quality and reliability of the regulated services provided.

      3. When considering a draft investment program, the following actions shall be excluded:

      1) non-conforming with the requirements, stipulated by paragraph 1 of this article;

      2) unsecured by the source of funding;

      3) unconfirmed by the supporting documents.

      The exclusion of all actions of the investment program in accordance with part one of this paragraph shall be the basis for refusal to approve the investment program.

      4. A refusal to approve an investment program by an authorized body, other state body or a local executive body, the competencies of which are provided for in Articles 8, 9 and 10 of this Law, shall be the basis for refusal to approve the tariff.

      5. The investment program shall be approved for the period of duration of the tariff.

      6. The implementation of the approved investment program and the return of borrowed funds raised for its implementation shall be carried out:

      at the expense of profits and depreciation, included in the tariff;

      at the expense of other sources not prohibited by the legislation of the Republic of Kazakhstan.

      7. A subject of natural monopoly shall have the right to apply before November 1 of the current year simultaneously to the authorized body and (or) another state body or local executive body, whose competences are provided for in Articles 8, 9 and 10 of this Law, with an application on changing the approved investment program without raising the tariff.

      In the case of the implementation of state programs, a subject of natural monopoly shall have the right to apply to the authorized body and (or) other state body or local executive body with an application on the change of the approved investment program.

      8. In the event that a subject of natural monopoly fails to execute the actions of the approved investment program for reasons beyond the control of the subject of natural monopoly (non-fulfillment of obligations by the other party to the contract, recognition of the competition (tender) as failed due to force majeure), the deadlines for implementing the actions of the approved investment program may be postponed for the next calendar year until March 1 of the year following the year of their implementation.

      It shall not be allowed to re-postpone the time period for execution of the actions of the approved investment program.

Article 22. Procedure for changing the tariff approved by the authorized body before its expiration date

      1. The grounds for changing the tariff approved by the authorized body before its expiration date shall be:

      1) changes in the value of strategic goods and (or) tariffs (prices), subject to state regulation for the transportation of strategic goods;

      2) declaration of an emergency in accordance with the legislation of the Republic of Kazakhstan;

      3) changes in tax rates and other obligatory payments to the budget in accordance with the tax legislation of the Republic of Kazakhstan;

      4) a change in the approved investment program in connection with the implementation of the state programs of the Republic of Kazakhstan;

      5) an increase in the volume of regulated services provided;

      6) changes in the prime cost of electricity and water of its own production, used by the nuclear power complex in the provision of regulated services for the production, transmission, distribution and (or) supply of thermal energy and water supply, associated with changes in the price of gas and (or) its transportation;

      7) failure to comply with the quality and reliability indicators of the regulated services;

      8) non-compliance of the activities of a subject of natural monopoly, providing a regulated service for transmission of electrical energy, with the requirements of paragraph 6 of Article 13-1 of the Law of the Republic of Kazakhstan "On electric power industry" on the basis of information from the state authority for state energy supervision and control;

      9) failure to achieve the performance indicators of the activities of subjects of natural monopolies;

      10) transfer of the main gas pipeline along the route "Kyzylorda - Zhezkazgan - Karaganda - Temirtau - Astana" to the subject of natural monopoly in the property lease (rent) or trust management.

      2. In the event of a change in the tariff before its expiration, except for the grounds provided for by sub-paragraphs 4), 5), 7), 8), 9) and 10) paragraph 1 of this article, the corresponding cost item shall change.

      If the tariff changes before its expiration in accordance with sub-paragraph 9) of paragraph 1 of this article, the approved tariff estimate shall exclude the investment costs (profit, depreciation, capital expenditures leading to an increase in the value of fixed assets), defined by the rules for tariff formation.

      3. Tariff change shall be carried out at the initiative of the authorized body or a subject of natural monopoly no more than once a year.

      4. To change the tariff approved by the authorized body before the expiry of its validity period, the subject of natural monopoly shall submit an application to the authorized body with supporting materials.

      The time period for consideration by the authorized body of an application to change the tariff before its expiration in cases provided for:

      1) sub-paragraphs 1), 2), 3) and 5) of paragraph 1 of this article, shall be not more than ten working days from the date of its submission;

      2) sub- paragraphs 4) and 6) of paragraph 1 of this article, shall not exceed thirty working days from the date of its submission;

      3) sub-paragraph 10) of paragraph 1 of this article shall be not more than ninety working days from the date of its submission.

      In the case of a tariff change initiated by an authorized body, a subject of natural monopoly shall be obliged to submit economically justified calculations and materials within a month from the date of receipt of the relevant information.

      5. If additional information is required when considering an application, the authorized body shall have the right to request it in writing with a time limit, but not less than five working days.

      At that, the consideration of the application shall be suspended until the receipt of the necessary information with the notification of the subject of natural monopoly about it.

      6. The tariff, changed in accordance with paragraph 1 of this article, shall be effective from the date established by the authorized body.

      7. When approving the tariff in the cases provided for in sub-paragraphs 4), 6), 7), 8) and 9) of paragraph1 of this article, the authorized body shall hold public hearings not later than ten calendar days before its approval.

      8. The subject of natural monopoly in the cases provided for by paragraph 1 of this article, not later than five calendar days before the introduction of the tariff shall inform the consumers about this and provide information indicating the reasons for the change in tariff, the approved tariff estimates.

Article 23. Procurements made by a subject of natural monopoly

      1. This article and the rules for the activities performed by the subjects of natural monopolies shall apply to procurements of a subject of natural monopoly to whom a tariff has been approved using the cost method of tariff regulation, except for:

      1) the government procurement;

      2) the procurements of subjects of natural monopolies, fifty or more percent of voting shares (participation shares) of which are directly or indirectly owned by the national managing holding;

      3) the procurements of electric and (or) thermal energy from an energy producing organization that uses renewable energy sources, which are carried out in accordance with the legislation of the Republic of Kazakhstan in the field of support of the use of renewable energy sources;

      4) the procurements of balancing electricity, electricity at centralized bidding, spot market in accordance with the legislation of the Republic of Kazakhstan on electricity;

      5) the procurements of subjects of natural monopolies of small capacity;

      6) the procurements of subjects of natural monopolies, the costs of which are not taken into account when approving the tariff.

      2. Procurement of goods, works, services shall be carried out in one of the following ways:

      1) a tender;

      2) a request for price offers;

      3) from one source;

      4) through commodity exchanges;

      5) through electronic trading platforms.

      3. Procurement of goods, works, services shall be carried out by means of a tender and (or) through commodity exchanges, electronic trading platforms, except for the cases, provided for in this article.

      4. Procurement by the method of requesting price offers shall be held for homogeneous goods, works, services if the annual volumes of such homogeneous goods, works, services in terms of value do not exceed 4000-fold monthly calculated indicator, established by the law on the republican budget for the relevant financial year. At that, the decisive condition shall be the price.

      5. Procurement from one source shall be carried out in the following cases:

      1) if the procurement through a tender or request for price offers are deemed to have failed;

      2) the procurement of goods, works, services at the prices, tariffs, established by the legislation of the Republic of Kazakhstan;

      3) the procurement of goods, works, services from a person who has exclusive rights with respect to goods, works, services purchased, or from a person who is a subject of a state or natural monopoly;

      4) the procurement of goods, works, services due to the force majeure, including the localization and (or) elimination of the consequences of emergency situations, elimination of accidents;

      5) the procurement of goods, works, services, related to entertainment expenses;

      6) the procurement of periodicals on paper and (or) in electronic form;

      7) the procurement of property (assets) sold at tenders (auctions):

      by bailiffs in accordance with the legislation of the Republic of Kazakhstan on enforcement proceedings and the status of bailiffs;

      conducted in accordance with the legislation of the Republic of Kazakhstan on rehabilitation and bankruptcy;

      conducted in accordance with the land legislation of the Republic of Kazakhstan;

      in the privatization of state property;

      8) the procurement of homogeneous goods, works, services, if the annual volume of such homogeneous goods, works, services in terms of value does not exceed the 100-fold amount of the monthly calculated indicator, established by the law on the republican budget for the relevant financial year;

      9) the procurement of services, related to the sending of an employee on a business trip, including round trip ticket, accommodation, transportation services, meals;

      10) when a customer, who purchased goods, works, services, needs to purchase goods, works, services from the same supplier in order to unify, standardize or ensure compatibility.

      Note RCLI!
      This version of paragraph 6 is suspended until 01.01.2020 by the Law of the Republic of Kazakhstan dated 27.12.2018 No. 204-VІ (for the current version, see paragraph 2 of Article 36 of this Law).

      6. Procurements of a subject of natural monopoly shall be carried out in electronic form by posting information on its Internet resource, and in the absence of its Internet resource - by providing the authorized body with information on each stage of the procurement process for its publication on its Internet resource, except for the cases of procurement through commodity exchanges, electronic trading platforms that publish the trading results on their own Internet resources.

      7. In the part not regulated by this article, procurements shall be carried out in accordance with the rules for the activities of the subjects of natural monopolies.

      8. A subject of natural monopoly shall make procurement of strategic goods directly from manufacturers of strategic goods, except for the following cases:

      1) the presence of a shortage of electrical energy in the relevant product market, confirmed by the state body exercising leadership in the field of electric power industry;

      2) non-compliance of the subject of a natural monopoly with the conditions for participation in the wholesale market of electric energy, imposed on consumers;

      3) the procurement of electrical energy for the economic needs of the subject of natural monopoly in the field of transmission of electrical power, electrical energy in order to compensate for deviations of the actual interstate balance of electric energy flow from the planned one at the border with the power systems of neighboring states, imbalances of electricity, purchased for compensation of technological consumption of electrical energy in the networks of the subject of natural monopoly in the field of electric power transmission;

      4) procurement of gas from gas distribution organizations in accordance with the legislation of the Republic of Kazakhstan on gas and gas supply;

      5) procurement of electric energy in accordance with the legislation of the Republic of Kazakhstan in the field of support of the use of renewable energy sources;

      6) procurement of balancing electricity, electricity at centralized bidding, spot market in accordance with the legislation of the Republic of Kazakhstan on electricity;

      7) the procurement of electrical energy for the economic needs of a subject of natural monopoly in the field of electric power transmission in centralized bidding at prices not higher than the maximum tariff level, established in accordance with the legislation of the Republic of Kazakhstan on electric power industry.

      9. A individual in respect of whom a court decision has entered into force confirming the fact of non-fulfillment or improper performance of obligations to a subject of natural monopoly, within two years from the date of entry into force of a court decision, shall not be allowed to participate in procurement by the methods provided for in subparagraphs 1), 2) and 4) of paragraph 2 of this article.

Article 24. Consumer access to a regulated service

      1. Consumer access to a regulated service shall be provided:

      1) by posting information provided for in Article 25 of this Law on the Internet resource of a subject of natural monopoly, in its absence - by submitting it to an authorized body for posting on its Internet resource;

      2) by the issuance of technical conditions for connection to the networks of a subject of natural monopoly: transmission of electric, thermal energy, water supply and sewage, as well as to main gas pipelines and oil pipelines, to gas distribution systems and group reservoir installations in accordance with the development plan of engineering communications in accordance with the approved detailed planning project (building schemes) or to increase the volume of regulated services;

      3) by the fulfillment of the technical conditions by the customer for connection to the regulated service;

      4) by connecting to a regulated service or increasing the volume of a regulated service;

      5) by the conclusion of a contract for provision of a regulated service.

      2. Technical conditions for connection to the networks of a subject of natural monopoly: transmission of electric, thermal energy, water supply and water sewage, as well as main gas pipelines and oil pipelines, gas distribution systems and group reservoir installations or an increase in the volume of regulated services shall be issued by a subject of natural monopoly in the period established by this Law.

      3. The requirement of subparagraph 1) of paragraph 1 of this article shall not apply to the subjects of natural monopolies that provide the regulated services, specified by subparagraphs 10), 11), 12) and 13) of paragraph 1 of article 5 of this Law.

      4. Connection to the networks of power supply, heat supply, gas supply, water supply and drainage shall include the following stages:

      1) filing an application for the issuance of technical conditions for connection to the networks of a subject of natural monopoly or an increase in the volume of a regulated service;

      2) consideration of an application for the issuance of technical conditions, received through the State Corporation, by a subject of natural monopoly for the completeness of the attached documents, except for the facilities specified in paragraph 6 of this article;

      3) consideration by the subject of natural monopoly of the consumer's application for issuing technical conditions for connecting to the networks of the subject of natural monopoly or increasing the volume of the regulated service;

      4) the issuance by the subject of a natural monopoly of technical conditions;

      5) performance of work by the consumer in accordance with the technical conditions;

      6) informing the consumers about the completion of work and readiness to connect to the networks of the subject of the natural monopoly.

      5. Acceptance of an application for issuance of technical conditions for connecting to the networks of a subject of natural monopoly or increasing the volume of a regulated service and issuance of the result of its consideration, except for the facilities specified in paragraph 6 of this article, shall be carried out by the State Corporation, via the “electronic government” web portal or the office of the subject of natural monopoly.

      When accepting an application for issuing technical conditions for connecting to the networks of a subject of natural monopoly or increasing the volume of a regulated service and issuing the results of its consideration, except for the facilities specified in paragraph 6 of this article, the State Corporation shall charge a fee for provision of these services.

      6. An application for issuing technical conditions for connecting the construction objects to the networks of a subject of natural monopoly shall be formed by the architecture and city planning body during the preparation of the architectural planning task and send it electronically to the subject of natural monopoly.

      Issuance of the result of consideration of an application for the issuance of technical conditions for connection of construction objects to the networks of a subject of natural monopoly shall be carried out by the architecture and city planning bodies along with the architectural and planning task in accordance with the legislation of the Republic of Kazakhstan on architectural, urban planning and construction activities.

      7. The issuance of technical conditions for connection to the networks of a subject of natural monopoly at the request of the architecture and urban planning bodies shall be carried out by a subject of natural monopoly:

      1) for technically simple objects - within two working days;

      2) for technically complex objects - within five working days.

      Technical conditions for connection to the networks of a subject of natural monopoly or increase in the volume of regulated services shall be issued for the regulatory period of design and construction.

      8. The application form for issuing technical conditions for connection to the networks of a subject of natural monopoly or the increase of the volume of a regulated service and the list of documents attached to the application shall be established by the authorized body.

      Technical conditions should define an exhaustive list of requirements for the interconnected networks of the subject of natural monopoly, materials, equipment, devices, metering devices.

      9. Application for issuance of technical conditions for connection to the networks of a subject of natural monopoly or increase in the volume of a regulated service, except for the facilities specified in paragraph 6 of this article, received through the State Corporation, shall be returned by the subject of natural monopoly within two working days through a web portal "e-government" or the office of the subject of a natural monopoly in the case of provision of an incomplete package of documents.

      10. When granting access to a regulated service, a subject of natural monopoly shall be prohibited:

      1) to charge fees for providing information about free capacity;

      2) to require the submission of permits and other documents of state bodies, non-governmental organizations that are not related to the provision of a regulated service;

      3) to impose other requirements on the consumer, except for compliance with technical conditions for connecting to the networks of the subject of a natural monopoly or increasing the volume of the regulated service;

      4) to create unequal conditions of access to the regulated service;

      5) to limit the activity of the consumer in performing work in accordance with the technical conditions for connecting to the networks of a subject of natural monopoly or increasing the volume of a regulated service;

      6) to require approval of the construction project for compliance with the technical conditions for connecting to the networks of the subject of natural monopoly or increasing the volume of the regulated service.

      11. An application for issuing technical conditions for connection to the networks of a subject of natural monopoly or an increase in the volume of a regulated service, except for the facilities specified in paragraph 6 of this article, shall be considered within five working days, following which the subject of natural monopoly shall:

      1) issue the technical conditions;

      2) refuse to issue technical conditions.

      12. Refusal to issue technical conditions shall be allowed in the following cases:

      1) lack of free and available capacities, places, capacities of networks of a subject of natural monopoly, necessary to provide the required volume of regulated services;

      2) the absence of networks of a subject of natural monopoly or other property necessary for provision of a regulated service.

      13. In case of refusal to issue technical conditions, a subject of natural monopoly:

      1) shall attach the decision on refusal to issue technical conditions with the well-reasoned grounds;

      2) shall send to the authorized body a copy of the decision on refusal to issue technical conditions and the well-reasoned grounds with the calculation of the shortage of free and available capacity, places, capacities of networks of the subject of natural monopoly or lack of networks of the subject of the natural monopoly or other property necessary to provide the regulated service.

      14. In case of refusal to issue technical conditions for connecting a construction object, the subject of natural monopoly shall offer the alternative sources of connection to the networks of the subject of natural monopoly and indicate the terms of connection to the centralized communication networks in accordance with the engineering infrastructure development plan in accordance with the approved detailed planning project.

      15. The authorized body in connection with the receipt of a copy of the decision on refusal to issue technical conditions for connection to the networks of a subject of natural monopoly:

      1) not later than seven working days, shall send to the consumer a letter confirming the reasonability of the refusal to issue technical conditions for connection to the networks of a subject of natural monopoly or the need to file a complaint to an authorized body to initiate an audit of the activities of a subject of natural monopoly;

      2) when establishing the fact of absence of free and available capacities, places, capacities of the networks of the subject of natural monopoly or lack of networks of the subject of natural monopoly or other property of the subject of natural monopoly necessary to provide the required volume of regulated services, shall inform the subject of natural monopoly about the need to change the approved investment program in the presence of economic feasibility and creation of conditions for connecting to a regulated service.

      16. After completion of the work, the consumer shall inform the subject of natural monopoly about the completion of the work and readiness to receive the regulated service, who within two working days from the date of receipt of the information shall check the completed work according to the issued technical conditions and readiness to receive the regulated service.

      If the performed work conforms to the technical conditions, the connection to the regulated service shall be carried out within one working day.

      17. If the work performed does not comply with the technical conditions, the subject of natural monopoly within one working day shall inform the consumer about the unpreparedness of the construction object to receive the regulated service.

      After elimination of the revealed violations, the consumer shall re-inform about the completion of work and readiness to receive the regulated service.

      18. Connection to the regulated service shall include the following works:

      shutdown of the existing network by the subject of the natural monopoly;

      connection of the consumer to the existing network;

      switching on of the existing network by the subject of natural monopoly.

      19. A regulated service shall be provided by a subject of natural monopoly after the conclusion of a contract for provision of a regulated service.

Article 25. Publicity of the process of state regulation of activities of subjects of natural monopolies

      1. The publicity of the process of state regulation of activities of subjects of natural monopolies shall be ensured by:

      1) the placement of information relating to the state regulation of activities of subjects of natural monopolies in the media and on the Internet resource of the authorized body;

      2) holding public hearings;

      3) making reports by subjects of natural monopolies to the consumers and other interested parties;

      4) informing consumers and the authorized body about the introduction of the tariff;

      5) carrying out public monitoring and (or) technical expertise of the execution of the approved investment program, compliance with quality and reliability indicators for the regulated services and achievement of performance indicators for activities of subjects of natural monopolies.

      2. A subject of natural monopoly, within the terms established by paragraph 6 of this article, shall publish reports in the mass media distributed in the territory of the respective administrative-territorial unit to the consumers and other interested parties on the execution of the approved tariff estimate, on the execution of the approved investment program, on compliance with the quality and reliability indicators of the regulated services and achievement of performance indicators of subjects of natural monopolies with the justifications, including financial statements.

      3. The authorized body shall place on its Internet resource:

      1) the State Register of subjects of natural monopolies;

      2) legal acts of the authorized body;

      3) applications with the attached documents, submitted on electronic media, taking into account the requirements, established by paragraph 7 of this article;

      4) approved, established and defined tariffs;

      5) approved tariff estimates and investment programs;

      6) reports of subjects of natural monopolies on the execution of the approved tariff estimates, on the execution of the approved investment programs, on compliance with the quality and reliability indicators of the regulated services and the achievement of performance indicators of the subjects of natural monopolies;

      7) a register of the issued consents for performing certain actions by a subject of natural monopoly, as well as notifications received from a subject of natural monopoly on activities that are not related to the regulated services, in accordance with the Law of the Republic of Kazakhstan “On permits and notifications”;

      8) resolutions on bringing the subjects of natural monopolies to administrative responsibility;

      9) court decisions on the results of proceedings with the participation of the authorized body;

      10) quality and reliability indicators of the regulated services;

      11) indicators of the effectiveness of the activities of the subjects of natural monopolies;

      12) other information relating to the implementation of the state regulation of activities of subjects of natural monopolies.

      4. Public hearings on the discussion of the draft tariff shall be held with the invitation of deputies of the Parliament of the Republic of Kazakhstan, maslikhats, representatives of local governments, state bodies, subject of natural monopoly, the media, public associations, independent experts, consumers and other interested parties.

      5. The authorized body shall publish in periodicals the information about the date and place of public hearings to discuss the draft tariff, thirty calendar days before the day of their holding, and on its Internet resource - the results of public hearings to discuss the draft tariff, including discussions of transcripts, meeting minutes with decisions taken on the issues at hand, within ten calendar days after the day they were held.

      If public hearings are held when considering an application for setting tariffs for utilities in the spheres of natural monopolies, the regulated services for the production, transmission, distribution and (or) supply of thermal energy, the authorized body shall further publish information on the date and place of public hearings in periodic print publications distributed in the territory of the respective administrative-territorial unit.

      When setting the tariff by indexation method and determining the tariff on the basis of a concluded public-private partnership contract, including a concession contract, the subject of natural monopoly shall place on its Internet resource or in print media, distributed in the territory of the relevant administrative –territorial unit, the information about the date and the venue of public hearings, thirty calendar days before their holding.

      6. Not later than August 1 of the current calendar year and May 1 of the next calendar year, the subject of natural monopoly shall make reports on the results of the half year and year on the implementation of the approved tariff estimates, on the execution of the approved investment program, on compliance with the quality and reliability indicators of the regulated services and the achievement of performance indicators of the subjects of natural monopolies to the consumers and other interested parties.

      7. Any information, provided by a subject of natural monopoly for approval of the tariff and in the performance of duties provided for by this Law, shall not be recognized as commercial.

      8. Report to consumers and other interested parties shall be made in the form of a public hearing.

      9. The announcement of the upcoming report shall be published by a subject of natural monopoly, included in the local section of the State Register of subjects of natural monopolies, in periodicals, issued at least once a week and distributed in the territory of the respective administrative-territorial unit, and by a subject of natural monopoly, included in the republican section of the State Register of subjects of natural monopolies, - in a periodical publication, issued at least once a week and distributed on the entire territory of the Republic of Kazakhstan, not later than fifteen working days before the meeting and shall include the following information:

      1) the name and location of the subject of natural monopoly;

      2) the date and venue of the report;

      3) the type of regulated services provided.

      10. A month before the report, the subject of natural monopoly shall inform the authorized body.

      11. After the upcoming report is announced, five working days prior to the report, the subject of natural monopoly shall post on its Internet resource the information, specified in paragraph 13 of this article, and in case of its absence - shall provide the authorized body with information for its posting on its Internet resource.

      12. A subject of natural monopoly shall provide access to the venue for all those who wish to participate in the report.

      13. A report of a subject of natural monopoly must contain information with justifications in accordance with the rules for the implementation of activities by subjects of natural monopolies.

      14. In the report to the consumers and other interested parties, the subject of natural monopoly shall give a detailed explanation of the quality of the regulated service provided.

      15. The requirements stipulated by paragraph 2, parts two and three of paragraph 5, and paragraphs 6, 8, 9, 10, 11, 12, 13, and 14 of this article shall not apply to subjects of natural monopolies of small capacity and newly created subjects of natural monopolies.

Chapter 4. PARTICIPANTS OF SPHERES OF NATURAL MONOPOLIES

Article 26. Rights and obligations of the subject of natural monopoly

      1. A subject of natural monopoly shall have the right:

      1) to require consumers to comply with the technical requirements, established by the subject of natural monopoly in accordance with the legislation of the Republic of Kazakhstan;

      2) to reduce the tariff for all consumers during the tariff period;

      3) to independently manage the underutilized part of the costs, provided for in the approved investment program subject to the implementation of actions and in the approved tariff estimates, resulting from cost savings due to the use of more efficient methods and technologies, the implementation of an action plan of energy saving and energy efficiency, developed following the energy audit, the implementation of the measures to reduce regulatory technical losses or reduce the volumes of the rendered regulated services for the reasons beyond the control of the subject of natural monopoly, or the results of the competition (tender) procedures;

      4) to require from consumers to provide access the metering device for taking readings and their sealing;

      5) to apply to the authorized body with an application for making changes to the approved tariff estimate, as well as to the authorized and (or) other state body or local executive body - with an application for making changes to the approved investment program;

      6) to simultaneously with the application for the regulated services of the main railway networks to provide the draft price limits for the regulated services of the main railway networks in accordance with the rules for the tariff formation;

      7) to independently reduce and increase the tariff for the regulated services of mainline railway networks within the approved price limits for the regulated services of mainline railway networks in accordance with the rules for the tariff formation;

      8) to apply to the authorized body with an application for making changes to the approved price limits for the regulated services of mainline railway networks in accordance with the rules for the tariff formation;

      9) to provide regulated services and carry out activities not related to the regulated services in accordance with the requirements of the legislation of the Republic of Kazakhstan;

      10) to apply to the authorized body with an application on the introduction of amendments and additions, the adoption of new or cancellation of the existing legal acts of the authorized body;

      11) to appeal against the actions (inaction) of the authorized body, as well as its officials, instructions to eliminate violations of the legislation of the Republic of Kazakhstan on natural monopolies in court;

      12) have other rights established by the laws of the Republic of Kazakhstan.

      2. A subject of natural monopoly shall:

      1) apply to the authorized body with an application for inclusion in the State Register of subjects of natural monopolies, exclusion from it, on introduction of changes and (or) additions to it;

      2) apply to the authorized body with the application in accordance with this Law;

      3) provide a regulated service at the tariff, approved in accordance with this Law;

      4) provide consumers with access to the regulated service, except for the cases provided for by paragraph 12 of Article 24 of this Law;

      5) provide consumers with equal conditions for access to the regulated service;

      6) not establish additional requirements not related to the provided regulated service;

      7) ensure acceptance of payments from consumers for utilities provided to them in the spheres of natural monopolies through their own cash registers and (or) second-tier banks and organizations that carry out certain types of banking operations, Internet resources or terminals, and if necessary - through payment agents and (or) payment organizations;

      8) in accordance with the model contract, conclude individual contracts with consumers for each type of regulated services provided;

      9) develop and approve methods for maintaining separate accounting of revenues, costs and involved assets for each type of regulated services of subjects of natural monopolies in accordance with the procedure for maintaining separate accounting of revenues, costs and involved assets for each type of regulated services and in general for activities not related to the regulated services;

      10) keep separate records of revenues, costs, and involved assets for each type of regulated services and in general for activities not related to the regulated services;

      11) recalculate the cost of a regulated heat supply service taking into account the actual outdoor temperature directly to consumers or if it is impossible to determine the location of the consumer by reducing the tariff when paying for the regulated heat supply service;

      12) at the request of consumers, provide information about the tariff, the quality of the regulated service, and the conditions for the provision of the regulated service;

      13) report on the execution of the approved tariff estimates, on the execution of the approved investment program, on compliance with the quality and reliability indicators of the regulated services and the achievement of performance indicators of subjects of natural monopolies;

      14) inform consumers about the tariff, its change in the terms, established by this Law;

      15) execute the approved tariff estimates;

      16) execute actions of the approved investment program;

      17) annually, not later than May 1 of the year following the reporting period, submit reports to the authorized body on the execution of the approved tariff estimate, on the execution of the approved investment program, to another state body or local executive body - a report on the execution of the approved investment program;

      18) procure goods, works, services, the costs of which are taken into account when approving the tariff, in accordance with Article 23 of this Law;

      19) at the request of consumers, provide information contained in the approved tariff estimates and the investment program;

      20) when approving a tariff using the incentive method of tariff regulation, annually not later than May 1 of the reporting period, submit to the authorized body, another state body or local executive body reports on incomes, expenses actually achieved during the reporting year, compliance with quality and reliability indicators of regulated services , achievement of performance indicators of subjects of natural monopolies;

      21) quarterly place on its Internet resource or, in its absence, submit to the authorized body for placement on its Internet resource:

      the information about the reserve, the availability of free and available capacity, capacities, places, capacities of the networks of the subject of the natural monopoly;

      schemes for placing networks or other property used in the provision of regulated services, except for information relating to the state secrets and other secrets protected by law in accordance with the laws of the Republic of Kazakhstan and regulated services, provided for in sub-paragraphs 10), 11), 12) and 13) of paragraph 1 of Article 5 of this Law;

      information on the progress of execution of the approved investment program (location of objects, stage of execution with photo and video attached, deadlines for execution and cost of activities of investment programs), except for information relating to the state secrets and other secrets protected by law in accordance with the laws of the Republic of Kazakhstan;

      22) upon request of the authorized body, provide the necessary information on paper or in electronic form within the terms, established by the authorized body, which may not be less than five working days from the date of receipt of the relevant request by the subject of natural monopoly;

      23) inform the authorized body about the tariff, its change not later than thirty calendar days prior to its entry into force;

      24) within the deadlines, established by paragraph 6 of Article 25 of this Law, post reports on the implementation of the approved tariff estimates, the execution of the approved investment program, compliance with the quality and reliability indicators of the regulated services and the achievement of performance indicators of the subjects of natural monopolies to the consumers and other interested parties not later than five calendar days from the date of the report in the media, including on its Internet resource or Internet resource of the authorized body, in accordance with the rules of tariff formation;

      25) annually publish a report on the provision of utility services in the spheres of natural monopolies to the consumers and other interested parties not later than five calendar days from the date of the making the report in a periodical, on its Internet resource or the Internet resource of the authorized body in accordance with the rules for tariff formation;

      26) not to transfer the property, owned on the basis of the right of ownership or on any other legal basis, used in the technological cycle in the production and (or) provision of a regulated service, to trust management, property lease (rent), including leasing, except for the cases, provided for in paragraphs 1 and 2 of Article 13-1 of the Law of the Republic of Kazakhstan "On electric power industry", and the regulated service, provided for by sub-paragraph 13) of paragraph 1 of Article 5 of this Law;

      27) not assign the right of claim, related to the provided regulated service, except for the assignment of the right of claim to a special financial company for project financing and securitization transactions, provided that this does not lead to an increase in the tariff;

      28) alienate the property, used in the technological cycle in the production and (or) provision of the regulated service at the auction, except for the cases of transferring the property to the state, as well as the transfer of electrical networks by subjects of natural monopolies, providing the regulated service for the transmission of electric energy, specified in paragraph 1 of Article 13-1 of the Law of the Republic of Kazakhstan "On electric power industry".

      In case of alienation of the access road, the regulated services of which belong to the sphere of natural monopoly, the owner of this access road shall be obliged to provide the pre-emptive right to buy it to the existing consumer before third parties in the case of the equal conditions and redemption amount, presented in the tender bids.

      If there are two or more existing consumers, the pre-emptive right shall be granted to the consumer who has received a greater volume of the regulated services over the past twelve months (thous. wagon / km, wagon / hour) in the case of equal conditions and the redemption amount, presented in the tender bids;

      29) not include in the tariff the costs not related to the provision of the regulated service;

      30) acquire and install metering devices to the consumers in accordance with sub-paragraph 8) of paragraph 23 of Article 15 of this Law, except for the cases of acceptance and commissioning of construction objects;

      31) charge fees on consumers for the purchase and installation of a metering device in accordance with subparagraph 8) of paragraph 23 of Article 15 of this Law, except for the cases of acceptance and commissioning of construction objects;

      32) provide access to the objects of the approved investment program and provide information on execution of the approved investment program to the persons authorized to conduct public monitoring and (or) technical expertise of the execution of the approved investment program, compliance with quality and reliability indicators of regulated services, and achievement of performance indicators of subjects of natural monopolies.

      The duties provided for in sub-paragraphs 10), 13), 18), 21), 24), 25) and 29) of part one of this paragraph shall not apply to subjects of natural monopolies of small capacity and newly created subjects of natural monopolies.

Article 27. Consumer rights and obligations

      1. The consumer shall have the right:

      1) to purchase the regulated services at the tariffs in accordance with this Law;

      2) to participate in public hearings;

      3) to apply to the authorized body with an application on the introduction of amendments and (or) additions, the adoption of new and (or) on the cancellation of the existing legal acts of the authorized body.

      The consumer shall have other rights, established by the laws of the Republic of Kazakhstan.

      2. The consumer shall be obliged:

      1) to pay the regulated services in a timely manner and in full at the tariffs in accordance with this Law;

      2) to have metering devices;

      3) to provide access of the representative of the subject of natural monopoly to the metering device;

      4) timely and fully pay for the purchase and installation of a metering device in accordance with subparagraph 8) of paragraph 23 of Article 15 of this Law, except for the cases of acceptance and commissioning of construction objects;

      5) in accordance with the model contracts, approved by the authorized body, to conclude individual contracts with the subject of natural monopoly for each type of the regulated services provided;

      6) to fulfill the technical requirements, established by the subject of natural monopoly in accordance with the legislation of the Republic of Kazakhstan.

Article 28. Tariff Policy Council

      1. The Tariff Policy Council shall be a consultative and advisory body to the authorized body.

      2. The Tariff Policy Council may include deputies of the Parliament of the Republic of Kazakhstan, representatives of the authorized body and other state bodies, the National Chamber of Entrepreneurs of the Republic of Kazakhstan, public associations, associations of private enterprises, subjects of natural monopolies, experts and other interested parties.

      3. The Tariff Policy Council shall have the right to create commissions on problematic issues of tariff formation in the spheres of natural monopolies.

      4. The regulation on the Tariff Policy Council and its personal composition shall be approved by the authorized body.

      5. The Tariff Policy Council shall:

      1) develop proposals to the authorized body for draft regulatory legal acts in the spheres of natural monopolies;

      2) provide advisory, methodological and other support to the authorized body;

      3) promote the involvement of public, scientific and other organizations to participate in the implementation of the state policy in the spheres of natural monopolies;

      4) make proposals to the authorized body to determine the level of tariff indexation and the forecast index of the tariff;

      5) make proposals to the authorized body to determine the method of tariff regulation of the sphere of natural monopoly;

      6) make proposals to the authorized body to include in the list of subjects of natural monopolies, whose tariffs are approved using the incentive method of tariff regulation;

      7) discuss and develop recommendations for draft investment programs and changes made to the existing investment programs;

      8) hear reports on the execution of the approved tariff estimates, on the execution of the approved investment programs, on compliance with the quality and reliability indicators of the regulated services and the achievement of performance indicators of the subjects of natural monopolies;

      9) coordinate the terms of placement by the authorized body of the state social order for public associations.

Article 29. Public associations

      Public associations, in addition to the rights, established by the legislation of the Republic of Kazakhstan on public associations, shall also:

      1) participate in development of the main directions of the state policy in the spheres of natural monopolies;

      2) send proposals to the authorized body on draft regulatory legal acts in the spheres of natural monopolies;

      3) participate in consideration by the authorized body of the draft tariffs and draft investment program, reports on the implementation of the approved tariff estimates, the execution of the approved investment program, compliance with the quality and reliability indicators of regulated services and the achievement of performance indicators of subjects of natural monopolies;

      4) disseminate information about the rights and obligations of consumers and subjects of natural monopolies;

      5) represent the interests of consumers in relations with the authorized body, other state bodies, subjects of natural monopolies, courts and other persons;

      6) perform other functions not prohibited by the legislation of the Republic of Kazakhstan.

Chapter 5. THE STATE CONTROL

Article 30. The State control

      1. The State control in the spheres of natural monopolies shall be carried out in accordance with the Business Code of the Republic of Kazakhstan.

      When exercising state control in the spheres of natural monopolies, the authorized body shall take the following response measures:

      1) initiate an administrative violation case;

      2) issue an instruction to eliminate violations of the legislation of the Republic of Kazakhstan on natural monopolies;

      3) transfer materials to law enforcement and other authorities.

      2. When implementing the state control, the authorized body in the spheres of natural monopolies shall interact with law enforcement agencies within the competence, established by the legislation of the Republic of Kazakhstan.

Article 31. An instruction on elimination of violation of the legislation of the Republic of Kazakhstan on natural monopolies

      1. An instruction to eliminate a violation of the legislation of the Republic of Kazakhstan on natural monopolies shall be executed by a subject of natural monopoly within the period established by the instruction, which must be at least ten calendar days from the date of its receipt.

      2. In the event that a subject of natural monopoly fails to issue an instruction to eliminate a violation of the legislation of the Republic of Kazakhstan on natural monopolies, the authorized body shall file a lawsuit against forcing the subject of natural monopoly to perform the actions, specified in the instruction.

Chapter 6. RESPONSIBILITY IN THE SPHERES OF NATURAL MONOPOLIES

Article 32. Responsibility for violation of the legislation of the Republic of Kazakhstan on natural monopolies

      Violation of the legislation of the Republic of Kazakhstan on natural monopolies shall entail liability, established by the laws of the Republic of Kazakhstan.

Article 33. Temporary compensating tariff

      1. The temporary compensating tariff shall be approved based on the results of:

      1) verification of the activities of the subject of natural monopoly;

      2) an annual analysis of the reports on the execution of the approved tariff estimates, the execution of the approved investment program submitted by the subject of natural monopoly.

      2. The grounds for approval of the temporary compensating tariff shall be:

      1) the excess of the tariff, approved in accordance with this Law;

      2) inappropriate use of depreciation funds;

      3) non-fulfillment of the actions of the approved investment program, included in the tariff, except for the following cases:

      reduction of the volumes that resulted in shortfalls in the funds, provided for in the approved tariff estimate for the implementation of the approved investment program. At the same time, the amount of lost income, proportionate to the decrease in the volumes shall be excluded from the total amount of non-fulfillment of the actions of the approved investment program; the temporary compensating tariff shall be introduced by the authorized body for the remaining amount of unjustified income;

      money savings, resulting from the conducted competition (tender) procedures;

      cost savings due to the introduction of more efficient methods and technologies;

      4) non-fulfillment of the cost items of the approved tariff estimate by more than 5 percent of the amount provided for by the approved tariff estimate, except for the following cases:

      cost savings due to the use of more efficient methods and technologies, the implementation of an action plan for energy saving and energy efficiency, developed as a result of an energy audit, and measures to reduce regulatory technical losses;

      cost savings due to the reduced volumes of regulated services for reasons beyond the control of the subject of natural monopoly. In this case, the amount of lost income, proportionate to the decrease in volumes shall be excluded from the total amount of non-fulfillment of the approved tariff estimates; the temporary compensating tariff shall be introduced by the authorized body for the remaining amount of unjustified income;

      money savings, resulting from the competition (tender) procedures.

      3. The temporary compensating tariff shall not apply in the case of full compensation by the subject of natural monopoly of the unjustifiably received income to the consumers, including by a court decision.

      4. The temporary compensating tariff shall be approved taking into account the refinancing rate of the National Bank of the Republic of Kazakhstan on the day of the decision making.

Article 34. Reimbursement of damages by a subject of natural monopoly, caused by violation of this Law

      Actions (inaction) of a subject of natural monopoly that contradict the laws of the Republic of Kazakhstan on natural monopolies and cause losses to another individual or legal entity, including by overestimating the tariff, unjustified refusal to enter into and perform a contract for provision of a regulated service, shall entail compensation of damages by the subject of natural monopoly in accordance with the civil legislation of the Republic of Kazakhstan.

Article 35. Indemnification of damages caused to the subject of natural monopoly by unlawful decisions, actions (inaction) of the authorized body, as well as its officials

      In case if unlawful decisions, actions (inaction) of the authorized body, as well as its officials caused damage to the subject of natural monopoly, it shall be entitled to claim compensation for these losses in accordance with the civil legislation of the Republic of Kazakhstan.

Chapter 7. TRANSITIONAL AND FINAL PROVISIONS

Article 36. Procedure for enactment of this Law

      1. This Law shall enter into force upon the expiry of ten calendar days after the day of its first official publication.

      2. Suspend the effect of paragraph 6 of Article 23 of this Law until January 1, 2020, establishing that during the period of suspension this paragraph is valid as follows:

      "6. Procurement of a subject of natural monopoly shall be carried out on paper or in electronic form by posting information on its Internet resource, and in the absence of its Internet resource - by providing the authorized body with information on each stage of the procurement process for its placement on its Internet resource, except for the cases of procurement through commodity exchanges, electronic trading platforms that post the trading results on their own Internet resources.".

      3. To recognize the Law of the Republic of Kazakhstan dated July 9, 1998 "On natural monopolies" as invalid (Bulletin of the Parliament of the Republic of Kazakhstan, 1998, No. 16, Article 214; 1999, No. 19, Article 646; 2000, No. 3-4, Article 66; 2001, No. 23, Article 309; 2002, No. 23-24, Article 193; 2004, No. 14, Article 82; No. 23, Article 138 , 142; 2006, No. 2, Article 17, No. 3, Article 22, No. 4, Article 24, No. 8, Article 45, No. 13, Article 87, 2007, No. 3, Article 20; No. 19, Article 148; 2008, No. 15-16, Article 64; No. 24, Article 129; 2009, No. 11-12, Article 54; No. 13-14, Article 62; No. 18, Article 84; 2010, No. 5, Article 20, 23; 2011, No. 1, Article 2, No. 11, Article 102, No. 12, Article 111, No. 13, Article 112; No. 16, Article 129; 2012, No. 2, Article 9, 15, No. 3, Article 21, No. 4, Article 30, No. 11, Article 80, No. 12, Article 85; No. 15, Article 97; 2013, No. 4, Article 21; No. 10-11, Article 56; No. 15, Article 79, 82; No. 16, Article 83; 2014, No. 1, Article 4; No. 4-5, Article 24; No. 10, Article 52, No. 11, Article 64, No. 14, Article 87, No. 16, Article 90, No. 19-І, 19-II, Article 96, No. 23, Article 143, 2015, No. 9, Article 46, No. 19-І, Article 100, No. 20-IV, Article 113, No. 20-VII, Article 117, No. 21-II, Article 131; No. 22-II, Article 144; No. 22-V, Article 156; No. 22-VI, Article 159; 2016, No. 6, Article 45; № 8-І, Article 60; No. 24, Article 124; 2017, No. 4, Article 7; No. 9, Article 17, 22; № 14, Article 54; No. 20, Article 96; 2018, No. 10, Article 32; No. 19, Article 62).

      President of the
Republic of Kazakhstan
N. NAZARBAYEV


On natural monopolies

Law of the Republic of Kazakhstan dated December 27, 2018 No. 204-VІ.

      Unofficial translation

Chapter 1. GENERAL PROVISIONS

Article 1. Objectives of this Law

      The objectives of this Law shall be:

      1) achievement of a balance of interests of consumers and subjects of natural monopolies;

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

      3) ensuring the availability of regulated services for consumers;

      4) ensuring the protection of the interests of consumers and subjects of natural monopolies;

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

      6) stimulation of improving the quality of the regulated services and meeting the 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 shall be based on the Constitution of the Republic of Kazakhstan and consist of this Law and other regulatory legal acts of the Republic of Kazakhstan.

      2. If an international treaty ratified by the Republic of Kazakhstan establishes other rules than those contained in this Law, the rules of the international treaty shall apply.

      Article 3. Effect of this Law

      1. This Law shall apply to the relations arising in the market of services of the Republic of Kazakhstan rendered by the subjects of natural monopolies.

      2. Relationships not covered by this Law shall be governed by the legislation of the Republic of Kazakhstan in the field of entrepreneurship and other laws of the Republic of Kazakhstan.

      3. The state regulation of activity and state control shall apply to the subject of natural monopoly, rendering the regulated services, referred by this Law to the spheres of natural monopolies, only in relation to the provision of regulated services.

      4. This Law shall not apply to individual entrepreneurs and legal entities carrying out activities related to the spheres of natural monopolies in one of the following cases when:

      1) the activity is associated with the construction and operation of facilities intended solely for their own needs;

      2) the activities stipulated in subparagraph 2) of paragraph 1 of Article 5 of this Law are carried out, in compliance with the following conditions:

      revenues from such activity should not exceed 1 percent of revenues from all activities per one calendar year;

      preservation of the tariff level that was in effect on January 1, 2012.

Article 4. Basic concepts used in this Law

      The following basic concepts shall be used in this Law:

      1) The State Corporation "Government for Citizens" (hereinafter - the State Corporation) - a legal entity, established by the decision of the Government of the Republic of Kazakhstan to render public services, services for issuing technical conditions for connecting the subjects of natural monopolies to the networks and services of subjects of quasi-public sector in accordance with the legislation of the Republic of Kazakhstan, organization of work for receiving applications for provision of public services, services for issuing technical conditions for connecting the subjects of natural monopolies to networks, services of subjects of quasi-public sector and issuance of their results to the service recipient on the principle of "one window", as well as ensuring the provision of public services in electronic form, carrying out state registration of rights to real estate at its location;

      2) inappropriate use of depreciation funds - the allocation of funds, provided for in the approved tariff and (or) the approved tariff estimate, at the expense of depreciation funds for purposes not related to investments in fixed assets, used in the provision of the regulated service and return of the principal debt on the attracted credit resources;

      3) controlled expenses – the expenses of a subject of natural monopoly, related to the provision of a regulated service, the amount of which depends on the activities of the subject of natural monopoly;

      4) uncontrollable expenses - the expenses of a subject of natural monopoly, associated with the provision of a regulated service, the amount of which does not depend on the activities of the subject of natural monopoly;

      5) metering device - a technical device, designed for the commercial accounting of individual and (or) general household consumption of regulated services, allowed for use in the manner, determined by the legislation of the Republic of Kazakhstan;

      6) public hearings - a procedure of discussing the draft tariff, the norms of consumption of public services in the spheres of natural monopolies for consumers who do not have metering devices, and making reports to the consumers and other interested parties;

      7) an investment program - an action plan for investing and returning funds, allocated for the expansion, modernization, reconstruction, renewal, maintenance of existing assets and creation of new assets of a subject of natural monopoly in order to obtain technical and economic and (or) environmental effects, expressed in achieving targeted indicators of the investment program or the preservation of the performance indicators of a subject of natural monopoly at the existing level;

      8) indexation method - the formation of a tariff by annual indexation of the approved tariff by a subject of natural monopoly of small capacity;

      9) public monitoring - a mechanism for monitoring by public organizations and other interested parties of the progress of an approved investment program, compliance with quality and reliability indicators for the regulated services and achievement of performance indicators of subjects of natural monopolies;

      10) a subject of a natural monopoly of small capacity - a subject of a natural monopoly, rendering the regulated services:

      for production, transmission, distribution and (or) supply of thermal energy from heating boilers with a total installed capacity of up to twenty Hcal / hour inclusive;

      water supply and (or) water disposal up to five hundred thousand cubic meters per year;

      irrigation water supply up to thirty million cubic meters per year;

      access roads of up to fifty thousand wagon / km, wagon / hour per year in the absence of a competitive access road;

      on the transfer of electrical energy of up to twenty-five million kWh per year;

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

      The subject of a natural monopoly of small capacity shall also include a subject of natural monopoly for 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 for one calendar year. At that, in the remaining regulated services, the subject of a natural monopoly shall not relate to the subject of a natural monopoly of small capacity;

      11) price limits for regulated services of mainline railway networks - maximum and minimum tariff levels in the form of indices to tariffs for regulated services of mainline railway networks;

      12) an application – an appeal of the subject of natural monopoly to the authorized body to approve the tariff;

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

      14) forecast tariff index - an indicator that determines the allowable tariff level by calculating its forecast;

      15) indicators of quality and reliability of regulated services - a set of criteria for evaluating regulated services, including technological and other objective parameters of the process of providing regulated services to consumers, which are also subject to independent external evaluation;

      16) strategic goods:

      coal, gas, fuel oil and diesel fuel used as fuel for production of thermal energy by subjects of natural monopolies;

      electric energy - for subjects of natural monopolies in the areas of electricity transmission, water supply and (or) water disposal;

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

      gas - for own needs and losses for subjects of natural monopolies in the areas of storage, transportation of marketable gas through connecting, main gas pipelines and (or) gas distribution systems, operation of group tank installations, as well as transporting raw gas through connecting gas pipelines;

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

      17) manufacturers of strategic goods - individuals and legal entities:

      producing strategic goods;

      who own the raw materials for the production (processing) of strategic goods;

      directly on behalf of a foreign manufacturer selling strategic goods in the territory of the Republic of Kazakhstan;

      18) a natural monopoly - the state of the market for goods, works, services in which the creation of competitive conditions to meet the demand for a certain type of goods, works, services is impossible or economically inexpedient due to the technological features of production and the provision of this type of goods, works, services;

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

      20) indicators of effectiveness of activities of subjects of natural monopolies - the ratio of the results of activities of the subject of natural monopoly and its economic, managerial, production costs, taken into account when forming the tariff;

      21) a subject of natural monopoly - an individual entrepreneur or a legal entity that renders regulated services to consumers;

      22) a tariff - the monetary value of the regulated service;

      23) a method of tariff regulation of the sphere of natural monopoly - a method used in formation of the tariff;

      24) the cost method of tariff regulation - the method of forming the tariff, depending on the itemized, economically justified costs and profits of the subject of natural monopoly;

      25) the incentive method of tariff regulation - the method of forming the tariff, depending on compliance with the indicators of quality and reliability of the regulated services and the achievement of performance indicators of the activities of the subjects of natural monopolies;

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

      27) tariff differentiation - the establishment of different tariff levels, depending on the conditions of consumption, including a group of consumers;

      28) straight-line depreciation method - the depreciation method, according to which the annual depreciation amount is determined by dividing the cost, which is depreciated into the useful life of object of the fixed asset and intangible assets;

      29) a consumer - an individual or legal entity using or intending to use the regulated services;

      30) temporary compensatory tariff - a tariff, approved by the authorized body for a specified period in order to return funds to consumers;

      31) temporary reduction factor - the value, approved by the authorized body and applied to the tariff in order to protect the interests of consumers and the subject of the natural monopoly;

      32) an authorized body - a state body exercising leadership in the relevant spheres of natural monopolies;

      33) e-government web portal - an information system that represents a “single window” of access to all consolidated government information, including the regulatory legal framework, and public services, the services of issuing technical conditions for connecting a subject of natural monopoly to networks and services of subjects of quasi-public sector, rendered in electronic form.

Article 5. Spheres of natural monopolies

      1. The spheres of natural monopolies in the Republic of Kazakhstan shall include the regulated services:

      1) on transportation of oil and (or) oil products through main pipelines, except for their transportation for transit through the territory of the Republic of Kazakhstan and export outside the Republic of Kazakhstan;

      2) on storage, transportation of commercial gas through connecting, main gas pipelines and (or) gas distribution systems, operation of group tank installations, as well as transportation of raw gas through connecting gas pipelines, except for storage and transportation of commercial gas for transit through the territory of the Republic of Kazakhstan and export outside the Republic of Kazakhstan;

      3) on the transfer of electrical energy;

      4) for the production, transmission, distribution and (or) supply of thermal energy, except for thermal energy, generated using the heat of the soil, groundwater, rivers, reservoirs, waste water of industrial enterprises and power plants, sewage treatment facilities;

      5) on technical dispatching of supply to the network and consumption of electric energy;

      6) on the organization of balance of the production and consumption of electric energy;

      7) main railway networks, except for the regulated services of main railway networks during transportation of goods in containers, the transportation of empty containers and the transit transportation of goods through the territory of the Republic of Kazakhstan;

      8) railway lines with railway transport facilities under public-private partnership contracts, including concession contracts, in the absence of a competitive railway line;

      9) access roads in the absence of a competitive access road;

      10) air navigation, except for the air navigation services for international and transit flights;

      11) ports in the absence of competition in the port services market;

      12) airports, except for the air transportation services, making transit flights through the airspace of the Republic of Kazakhstan with the technical landings at airports of the Republic of Kazakhstan for non-commercial purposes and in international directions;

      13) for property lease (rental) or the use of cable sewage, except for the activities of small businesses;

      14) water supply and (or) water disposal.

      2. Subjects of natural monopolies shall be subject to inclusion in the State Register of subjects of natural monopolies with indication of regulated services.

      3. The expansion of the spheres of natural monopolies shall be carried out in accordance with the international treaties, ratified by the Republic of Kazakhstan.

Chapter 2. GOVERNMENTAL REGULATION OF ACTIVITY IN THE SPHERES OF NATURAL MONOPOLIES

Article 6. State regulation of activities in the spheres of natural monopolies

      State regulation of activities in the spheres of natural monopolies shall be carried out by:

      1) formation of the State Register of subjects of natural monopolies;

      2) formation, establishment and approval of the tariff;

      3) determination of the methods of tariff regulation of the spheres of natural monopolies;

      4) issuance of consent to perform certain actions by a subject of natural monopoly, as well as acceptance of a notice from the subject of natural monopoly on performance of the activities not related to the regulated services, in accordance with the Law of the Republic of Kazakhstan “On permits and notifications”;

      5) formation of the list of regulated services.

Article 7. Competence of the Government of the Republic of Kazakhstan

      The Government of the Republic of Kazakhstan shall:

      1) develop the main directions of state policy in the spheres of natural monopolies and organize their implementation;

      2) perform other functions assigned to it by the Constitution of the Republic of Kazakhstan, this Law, other laws of the Republic of Kazakhstan and the acts of the President of the Republic of Kazakhstan.

Article 8. Competence of the authorized body

      The authorized body shall:

      1) carry out the state regulation of activities of subjects of natural monopolies in accordance with the Entrepreneurial Code of the Republic of Kazakhstan, this Law and the legislation of the Republic of Kazakhstan;

      2) implement the state policy in the spheres of natural monopolies;

      3) submit annually to the Government of the Republic of Kazakhstan the reports on the state of the spheres of natural monopolies, on the execution of the approved tariff estimates, on the implementation of the approved investment programs;

      4) form and maintain the State Register of subjects of natural monopolies;

      5) develop and approve the tariff setting rules;

      6) develop and approve the rules for the activities of the subjects of natural monopolies;

      7) develop and approve the standard contracts for provision of regulated services;

      8) accept an application for consideration or refuse to accept it;

      9) conduct public hearings with the publication in mass media of the announcement about the date and place of their holding;

      10) approve the tariff in the cases, provided for by this Law;

      11) determine the level of indexation of the tariff of the subject of the natural monopoly of small capacity;

      12) approve and make changes to the tariff estimate, approved by it;

      13) approve and make changes together with another state agency in the approved investment program of a subject of natural monopoly, included in the republican section of the State Register of the subjects of natural monopolies, except for the subjects of natural monopolies, rendering the regulated services provided for in subparagraphs 10), 12) and 13) of paragraph 1 of Article 5 of this Law;

      14) approve and make changes together with the local executive body in the approved investment program of a subject of natural monopoly, included in the local section of the State Register of the subjects of natural monopolies;

      15) approve the temporary compensation tariff;

      16) issue a consent to perform certain actions by a subject of natural monopoly, and also receive a notification from the subject of natural monopoly on the implementation of activities not related to regulated services, in accordance with the Law of the Republic of Kazakhstan "On permits and notifications";

      17) develop and approve indicators of quality and reliability of regulated services in coordination with the relevant state bodies;

      18) develop and approve the performance indicators of the activities of the subjects of natural monopolies;

      19) request and receive information necessary to exercise its powers from individuals and legal entities, including state bodies, local self-government bodies, as well as their officials;

      20) submit an order to the subject of natural monopoly on elimination of violation of the legislation of the Republic of Kazakhstan on natural monopolies;

      21) go to court in cases of violation of this Law;

      22) analyze the reports of subjects of natural monopolies on the execution of the approved tariff estimates, on the execution of the approved investment program, on compliance with the indicators of quality and reliability of the regulated services, as well as on the achievement of performance indicators of the activities of the subjects of natural monopolies;

      23) consider appeals of subjects of natural monopolies and consumers;

      24) agree on the tender documentation of a public-private partnership project, including a concession project, draft public-private partnership contract, including a concession contract, making amendments and (or) additions to them in terms of tariff formation;

      25) make a change to the approved tariff estimates without raising the tariff in the case of taking on the balance and (or) trust management of the property, used in the technological cycle in the provision of regulated services from the state or local executive bodies when it is received for free use, including electrical networks from other energy transmission organizations;

      26) approve a temporary reduction factor;

      27) determine the forecast tariff index for a five-year period in the spheres of natural monopolies;

      28) approve the amount of payments for utilities in the spheres of natural monopolies for consumers who do not have metering devices;

      29) approve the price limits for the regulated services of the main railway networks;

      30) adjust the annually approved price limits for the regulated services of the main railway networks in accordance with the rules for the tariff formation;

      31) determine the method of tariff regulation of the sphere of natural monopoly;

      32) approve the list of regulated services;

      33) approve the list of subjects of natural monopolies, whose tariffs are approved using the incentive method of tariff regulation;

      34) hold a reception of consumers at least once a month, together with the subjects of natural monopolies;

      35) recommend the local executive bodies the norms for consumption of public services in the spheres of natural monopolies for consumers who do not have metering devices;

      36) recommend the subject of a natural monopoly the amount of payment for the purchase and installation of metering devices in accordance with subparagraph 8) of paragraph 23 of Article 15 of this Law, except for the cases of acceptance and commissioning of construction objects;

      37) exercise other powers provided for by this Law, other Laws of the Republic of Kazakhstan, acts of the President of the Republic of Kazakhstan and the Government of the Republic of Kazakhstan.

Article 9. Competence of other state bodies

      State bodies in the field of energy, railway transport, production, transportation (carriage), storage and wholesale of gas, as well as retail sales and consumption of commercial and liquefied petroleum gas, use and protection of water resources, water supply, water disposal shall:

      1) participate, within their competence, in the implementation of state policy in the spheres of natural monopolies;

      2) approve and make changes together with the authorized body to the investment program of a subject of natural monopoly, included in the republican section of the State Register of subjects of natural monopolies, as well as a subject of natural monopoly, included in the local section of the State Register of subjects of natural monopolies on regulated services of access roads in the absence of a competitive access road;

      3) exercise other powers provided for by this Law, other Laws of the Republic of Kazakhstan, acts of the President of the Republic of Kazakhstan and the Government of the Republic of Kazakhstan.

Article 10. Competence of local executive bodies of regions, cities of republican significance, the capital

      Local executive bodies of regions, cities of republican significance, the capital shall:

      1) participate, within their competence, in the implementation of state policy in the spheres of natural monopolies;

      2) approve and make changes together with the authorized body to the investment program of a subject of natural monopoly, included in the local section of the State Register of subjects of natural monopolies, except for the subjects of natural monopolies, rendering the regulated services provided for in subparagraphs 9), 10), 12) and 13) of paragraph 1 of Article 5 of this Law;

      3) in agreement with the authorized body, approve the norms of consumption of public services in the spheres of natural monopolies for consumers who do not have metering devices, and a month before they are approved, they hold public hearings;

      4) in the interests of local government, carry out other powers imposed on local executive bodies by the legislation of the Republic of Kazakhstan.

Article 11. Formation of the State Register of subjects of natural monopolies

      1. The State Register of subjects of natural monopolies shall be a list of individual entrepreneurs and legal entities, rendering regulated services, formed by an authorized body.

      Provision of regulated services by persons not included in the State Register of subjects of natural monopolies shall not be allowed.

      2. An individual entrepreneur or a legal entity providing regulated services shall apply to the authorized body with an application on inclusion in the State Register of subjects of natural monopolies not later than fifteen calendar days from the date of the commencement of provision of the regulated service to the consumers.

      3. The formation and maintenance of the State Register of subjects of natural monopolies shall be carried out through including and excluding subjects of natural monopolies from it.

      4. The State Register of subjects of natural monopolies shall consist of republican and local sections.

      5. The republican section of the State Register of subjects of natural monopolies shall include the subjects of natural monopolies that render the regulated services in two or more regions, cities of republican significance and the capital.

      Local sections of the State Register of subjects of natural monopolies shall include the subjects of natural monopolies that render the regulated services in the territory of one region or city of republican significance, or the capital.

      Subjects of natural monopolies that render the regulated air navigation services, ports, airports, for renting (rent) or using cable channels, shall be included in the republican section of the State Register of subjects of natural monopolies.

      6. A subject of natural monopoly shall be included in the State Register of subjects of natural monopolies at the place of registration of an individual entrepreneur or legal entity, except for a foreign legal entity, which is subject to inclusion in the State Register of subjects of natural monopolies at the place of provision of the regulated service.

      7. In the event of termination of the provision of a regulated service, a subject of natural monopoly, not later than fifteen calendar days, shall submit an application to the authorized body on its exclusion from the State Register of subjects of natural monopolies.

Article 12. Methods of tariff regulation of spheres of natural monopolies

      1. When forming the tariff, the following methods of tariff regulation of spheres of natural monopolies shall be applied:

      1) cost;

      2) incentive;

      3) indexation;

      4) determination of the tariff on the basis of a public-private partnership contract, including a concession contract.

      2. The method of tariff regulation of the sphere of natural monopoly shall be applied if the following conditions are observed in aggregate:

      1) economic and technological readiness of the subject of natural monopoly to use the corresponding method of tariff regulation of the sphere of natural monopoly;

      2) prevention of imposing of duties on the subject of natural monopoly and consumers, which cannot be fulfilled by them.

Article 13. Issuance of consent to perform certain actions by subject of natural monopoly

      1. A subject of natural monopoly shall be obliged to obtain the consent of the authorized body:

      1) for making transactions with the property, used to provide the regulated service, if the balance sheet value of the property recorded in the balance sheet at the beginning of the current year exceeds 0.05 percent of the balance sheet value of its assets in accordance with the balance sheet at the beginning of the current year;

      2) for reorganization or liquidation.

      2. The issuance of consent for the subject of natural monopoly to perform certain actions, provided for by paragraph 1 of this article, shall be refused in cases where:

      1) it will lead to an increase in the tariff;

      2) it will lead to violation of contracts with consumers;

      3) it will lead to infringement of the rights and legitimate interests of consumers;

      4) it will lead to the violation of an inextricably linked technological system for providing a regulated service or a reduction in the quality of a regulated service;

      5) an incomplete package of documents, provided for by paragraphs 3 and 4 of this article has been submitted, or the documents provided contain false information (data).

      3. To obtain the consent of the authorized body to make transactions with the property, used to provide the regulated service, if the balance value of the property recorded in the balance sheet at the beginning of the current year exceeds 0.05 percent of the balance value of its assets in accordance with the balance sheet at the beginning of the current year, the subject of natural monopoly shall submit a petition with an attachment-confirmation from the balance sheet at the beginning of the current year, signed by the head of the subject of natural monopoly, indicating the name, type, kind, inventory number, the initial, residual value of the alienated property in the context of the alienated objects.

      4. A subject of natural monopoly, in order to obtain the consent of the authorized body for reorganization or liquidation, shall submit petition with the application of:

      1) copies of the deed of transfer - at merger, accession, transformation;

      2) copies of the separation balance sheet - at separation, appropriation;

      3) copies of the liquidation balance sheet - upon liquidation.

      5. To perform certain actions provided for by paragraph 1 of this article, a subject of natural monopoly shall be obliged to submit a petition to the authorized body on the consent to take such actions in the form, established in accordance with the rules for performance of activities by subjects of natural monopolies, and documents in accordance with paragraphs 3 and 4 of this article.

      A subject of natural monopoly of small capacity, prior to reorganization or liquidation, shall be obliged to send information to the authorized body about its intention to perform the indicated actions within ten calendar days.

      6. The documents attached to the petition shall be submitted by the subject of natural monopoly according to the inventory.

Article 14. Procedure for notifying the authorized body by the subject of natural monopoly about the activities not related to regulated services

      1. A subject of natural monopoly, not later than ten working days from the day the activity is performed that is not related to regulated services, shall notify the authorized body about it.

      2. Notification about performance of activity by a subject of natural monopoly that is a non-regulated service can be submitted (sent) either directly to the authorized body or through the state information system of permits and notifications.

Chapter 3. TARIFF FORMATION

Article 15. Procedure for tariff formation

      1. A tariff should ensure the reimbursement of costs for provision of a regulated service and the receipt of profits allocated for the development and effective functioning of a subject of natural monopoly and other purposes not prohibited by the legislation of the Republic of Kazakhstan.

      2. A tariff shall be established for a period of five years or more, except for the cases, provided for by this Law.

      3. In case of expiration of the tariff, the subject of natural monopoly shall render the regulated services at the tariff approved by the authorized body, excluding funds, allocated for implementation of the approved investment program (depreciation and profits), except for the funds directed to repay the principal debt on loans, attracted for implementation of the approved investment program.

      4. For approval of the tariff by the authorized body, the subject of natural monopoly shall submit an application.

      5. The application shall be submitted in an electronic form.

      6. The application shall be reviewed by the authorized body within ninety working days from the date of its submission.

      7. The application shall be attached with:

      1) the draft tariff (or price list, taking into account industry-specific features);

      2) the draft tariff estimates with the application of supporting materials in the form approved by the authorized body;

      3) an explanatory note about the need to approve the tariff;

      4) draft investment program or approved investment program;

      5) the estimated costs for repairs that do not lead to an increase in the value of fixed assets;

      6) financial statements for the two preceding calendar years;

      7) reports:

      about financial and economic activity, about investment activity;

      on the state of fixed assets, wage rates of employees in certain positions and professions and labor for the two preceding calendar years in accordance with the forms approved by the authorized body in the field of state statistics;

      8) itemized cost calculations;

      9) profit calculation;

      10) calculations of the number of personnel, the needs of raw materials, materials, fuel, energy and technical losses, made on the basis of standard norms and standards in force in the relevant industry (sphere);

      11) copies of decisions of the competitive (tender) commissions on the procurement of material and financial resources, equipment and goods, works, services for the previous calendar year;

      12) the calculation of depreciation on fixed assets, used before the implementation of the approved investment program (project) and put into operation during the implementation of the approved investment program (project) in the long-term period, broken down by years;

      13) supporting documents on the conditions of financing and repayment of borrowed resources;

      14) data on the design capacity of the subject of natural monopoly and its actual use;

      15) documents, confirming the planned volume of regulated services (a register of contracts indicating actual volumes of consumption of regulated services, documents confirming a decrease in the volume of consumption of regulated services, calculations of the volume of consumption of regulated services, based on the duty of quality general service and the capabilities of a subject of natural monopoly, the inadmissibility of a decrease of the volume in order to maintain or increase the level of tariffs, materials of marketing research of consumer demand);

      16) documents, confirming actual data on costs and volumes of regulated services for the four quarters preceding the submission of the application and for the previous calendar year.

      When approving the tariff using the incentive method of tariff regulation, the application shall be attached with the documents, provided for in subparagraphs 1), 3), 4), 6), 7), 9), 10), 13), 14) and 15) of part one of this paragraph, as well as the draft indicators of the quality and reliability of the regulated services and performance indicators of the activities of subjects of natural monopolies with supporting materials attached.

      8. A subject of natural monopoly shall have the right to submit an application to the authorized body to approve the tariff using the incentive method of tariff regulation after the expiration of the approved tariff, except for the cases of approval of tariffs using the incentive method of tariff regulation for the subjects of natural monopolies, the list of which is determined by the authorized body.

      9. The authorized body not later than seven working days from the date of receipt of the application shall check the completeness of the attached calculations and supporting materials for compliance with paragraph 7 of this article and shall inform the subject of natural monopoly in writing about the acceptance of the application for consideration or refusal to accept it, indicating the reasons for refusal in accordance with paragraph 11 of this article.

      10. The calculations and supporting materials attached in accordance with paragraph 7 of this article shall be submitted in compliance with the following procedures:

      1) they are stitched, numbered and signed by the head of a subject of natural monopoly or by its deputy, or the deputy head of a subject of natural monopoly. This requirement shall not apply to submission of an application in electronic form;

      2) they are prepared separately for each type of regulated services.

      11. The grounds for refusal to accept an application shall be:

      1) the failure of the subject of natural monopoly to submit the documents, provided for by paragraph 7 of this article;

      2) incompliance of the submitted documents with paragraph 10 of this article;

      3) classification of information, not provided for by paragraph 7 of Article 25 of this Law, as a commercial secret.

      12. If additional information is needed when considering an application, the authorized body shall have the right to request it from a subject of natural monopoly in writing with a time limit, but not less than five working days.

      13. Public hearings shall be held by the authorized body when approving the tariff not later than thirty calendar days before approval of the tariff, when approving the tariff in a simplified manner, as well as in the cases, provided for in subparagraphs 4), 6), 7), 8) and 9) of paragraph 1 of Article 22 of this Law - not later than ten calendar days prior to the approval of the tariff.

      14. A subject of natural monopoly shall, after publication of the announcement in the periodical print publication about the date and place of the public hearing, at the request of the participants of the public hearing, shall submit:

      a draft tariff and tariff estimates;

      information about the reasons for changing the tariff with economically reasonable calculations.

      15. Based on the results of consideration of the application, the authorized body shall have the right to adjust draft tariffs, tariff estimates and the investment program.

      16. If approved, the tariff can be differentiated depending on:

      1) the presence or absence of the consumer’s metering device;

      2) consumer groups;

      3) the type of goods transported, the type of rolling stock, the distance of transportation, the volume (weight) of the transported goods.

      17. The decision on approval of the tariff shall be sent to the subject of the natural monopoly not later than five calendar days from the date the decision on its approval is made.

      The rationale for changes and clarification of cost items, profits and actions of the approved investment program, submitted by the subject of natural monopoly with the application, shall be sent with the decision to approve the tariff.

      18. A tariff shall be enacted not earlier than the first day of the second month following the month of tariff approval, except for the cases, provided for by this Law.

      19. A subject of natural monopoly shall be obliged to inform the consumer about the approval of the tariff not later than thirty calendar days prior to its entry into force.

      20. If the subject of natural monopoly does not inform the consumer about the introduction of the tariff within the terms established by this Law, then the specified tariff shall not be introduced from the date specified in the decision of the authorized body. The introduction of the approved tariff shall be carried out from the first day of the third month following the month of the tariff approval.

      21. A subject of natural monopoly shall have the right to apply to the authorized body with an application to change the approved tariff estimate without raising the tariff before November 1 of the current calendar year.

      22. Tariff formation rules shall determine:

      1) the tariff calculation mechanism taking into account the methods of tariff regulation of the spheres of natural monopolies, provided for by this Law;

      2) the procedure for approval of the temporary compensating tariff;

      3) the tariff differentiation procedure;

      4) the procedure for approval of the tariff in a simplified order;

      5) the procedure for approval of the investment program and its changes;

      6) the procedure for determining the tariff on the basis of a concluded public-private partnership contract, including a concession contract;

      7) the procedure for approval of a temporary reduction factor;

      8) the procedure for recording a separate accounting of revenues, costs and assets involved for each type of regulated services and in general for activities not related to the regulated services;

      9) the procedure for recalculating the cost of the regulated service for the supply of thermal energy, taking into account the actual outdoor temperature;

      10) the procedure for determining the permissible level of profit of the subject of the natural monopoly;

      11) the procedure for changing the tariff approved by the authorized body before its expiration date;

      12) a list of costs, taken into account and not taken into account in the tariff, the procedure for limiting the amount of costs that are taken into account in the tariff;

      13) tariff indexation procedure;

      14) forms of draft tariffs, tariff estimates, investment programs, reports on execution of the approved tariff estimates, on the execution of the approved investment program;

      15) the mechanism for calculating price limits for the regulated services of mainline railway networks and their annual adjustments;

      16) the procedure for applying price limits for the regulated services of mainline railway networks;

      17) the procedure for calculating and applying the forecast tariff index.

      23. The rules for performance of activities by subjects of natural monopolies shall determine:

      1) the order of inclusion and exclusion from the State Register of subjects of natural monopolies;

      2) the procedure for holding public hearings;

      3) the procedure for issuing consent to performance of certain actions by a subject of natural monopoly, as well as acceptance of a notice from the subject of natural monopoly on performance of activities not related to the regulated services, in accordance with the Law of the Republic of Kazakhstan "On permits and notifications";

      4) the procedure for procurements made by subjects of natural monopolies;

      5) the procedure for ensuring equal conditions of access to the regulated services;

      6) the procedure for making reports on the execution of the approved tariff estimates, on the execution of the approved investment programs, on compliance with the quality and reliability indicators of the regulated services and the achievement of performance indicators of subjects of natural monopolies to consumers and other interested parties;

      7) the procedure for placing information about the presence of free and available capacities, containers, places, capacities of networks of a subject of natural monopoly, as well as utilities networks in the spheres of natural monopolies, except for the information relating to the state secrets and other secrets protected by law in accordance with the laws of the Republic of Kazakhstan;

      8) the procedure for coordination of fees for the purchase and installation of metering devices;

      9) the procedure for the approval of performance indicators of the activities of subjects of natural monopolies;

      10) the procedure for exercising state control in the spheres of natural monopolies;

      11) forms of:

      applications for consent to make transactions with property, used to provide a regulated service, if the balance value of the property recorded in the balance sheet at the beginning of the current year exceeds 0.05 percent of the balance value of its assets in accordance with the balance sheet at the beginning of the current year, and reorganization or liquidation of a subject of natural monopoly;

      reports of the subject of natural monopoly to consumers and other interested parties:

      on the execution of the approved tariff estimates;

      on the execution of the approved investment program;

      on compliance with indicators of quality and reliability of the regulated services;

      on the achievement of performance indicators of subjects of natural monopolies;

      12) the procedure for informing the consumers and (or) the authorized body about the tariff, its change;

      13) the procedure for approval of quality and reliability indicators of regulated services;

      14) the procedure for the public monitoring and (or) technical expertise of the execution of the approved investment program, compliance with quality and reliability indicators for the regulated services and achievement of performance indicators of subjects of natural monopolies.

      24. Tariff formation methods shall be:

      1) the approval of the tariff by the authorized body;

      2) setting the tariff by a subject of natural monopoly;

      3) determination of the tariff on the basis of a public-private partnership contract, including a concession contract.

Article 16. The cost method of tariff regulation

      1. A tariff using the cost method of tariff regulation shall be approved by the authorized body for a period of five or more years by determining the economically reasonable costs and profits.

      2. The cost method of tariff regulation shall provide:

      1) limiting the types and amounts of costs, included in the tariff, taking into account their economic feasibility;

      2) the use of technical and technological standards for the consumption of raw materials, materials, fuel, energy, if any, normative technical losses, normative number of personnel, determined on the basis of standard norms and standards in force in the relevant industry (sphere);

      3) approval of tariff estimates broken down by year;

      4) the use of straight-line method of depreciation;

      5) procurement conducted by a subject of natural monopoly in accordance with article 23 of this Law and the rules for the conduct of activities by subjects of natural monopolies;

      6) determining the allowable profit level taking into account the balance sheet or revalued amount of assets of the subject of natural monopoly, involved in the provision of the regulated service and the profit rate, calculated by the method, determined by the authorized body, and the amount of funds, required for implementation of the approved investment program;

      7) approval of the investment program;

      8) approval of the temporary compensating tariff for non-performance of cost items of the approved tariff estimates, inappropriate use of depreciation funds and actions of the approved investment program.

Article 17. Incentive method of tariff regulation

      1. The tariff with the use of the incentive method of tariff regulation shall be approved by the authorized body for a period of five or more years, taking into account the quality and reliability indicators of regulated services and the performance indicators of activities of subjects of natural monopolies.

      2. The incentive method of tariff regulation shall provide:

      1) the limiting the types and amounts of costs that are included in the tariff, taking into account their economic feasibility;

      2) the use of technical and technological standards for the consumption of raw materials, materials, fuel, energy, if any, normative technical losses, normative number of personnel, determined on the basis of standard norms and standards in force in the relevant industry (sphere).

      The effect of this sub-paragraph shall be applied when approving the tariff in the event of a transition from the cost method of tariff regulation to the incentive method of tariff regulation;

      3) the determination of the controlled and uncontrolled costs;

      4) approval of a temporary compensating tariff for non-performance of actions of the approved investment program and uncontrolled costs;

      5) the determination of profit taking into account the return of invested capital and the rate of return on the invested capital and the balance value of the assets of the subject of natural monopoly, involved in the provision of a regulated service, and the profit rate calculated by the method determined by the authorized body;

      6) determination of quality and reliability indicators of regulated services;

      7) determination of indicators of efficiency of activity of subjects of natural monopolies;

      8) the use of straight-line method of depreciation;

      9) approval of the investment program.

Article 18. Indexation method

      1. The tariff using the indexation method shall be established annually by a subject of natural monopoly of small capacity by indexing the approved tariff not higher than the level determined by the authorized body.

      2. The level of tariff indexation shall be determined annually not later than two months before the beginning of the calendar year, taking into account the parameters of the socio-economic development of the Republic of Kazakhstan.

Article 19. Determination of the tariff on the basis of a public-private partnership contract, including a concession contract

      1. When considering a draft public-private partnership contract, including a concession project, the tariff should not be lower than the cost of providing the regulated service, and also ensure the return of investment made by the public partner and private partner and the level of return on investment in accordance with the feasibility study of the draft public-private partnership contract, including the concession project.

      2. The tariff shall be determined on the basis of a public-private partnership contract, including a concession contract, and an approved investment program in accordance with the rules for tariff formation.

      3. The tariff shall be determined at the initiative of the subject of public-private partnership, including the concessionaire, or the authorized body.

      4. The term of the tariff shall be set for a period not exceeding the period of implementation of the approved investment program and the public-private partnership contract, including the concession contract by the subject of a public-private partnership, including the concessionaire.

Article 20. Simplified tariff approval

      1. The authorized body shall approve the tariff in a simplified manner for the regulated service of:

      1) a subject of a natural monopoly, established for the first time;

      2) a subject of a natural monopoly, providing a new regulated service (new regulated services);

      3) in the case of the acquisition (construction) of new facilities and (or) sites, if the current tariff is approved separately for facilities and (or) sites;

      4) a subject of a natural monopoly of small capacity.

      2. The term for consideration of the application shall be not more than thirty calendar days from the date of its submission.

      3. The term of the tariff, approved in a simplified manner for the subjects of natural monopolies referred to in subparagraphs 1), 2) and 3) of paragraph 1 of this article, shall not exceed twelve months.

      4. The tariff approved in a simplified manner shall be effective from the first day of the month following the month the tariff is approved.

      5. Upon expiration of the tariff, approved in a simplified manner for the subjects of natural monopolies referred to in paragraph 1 of this article, the tariff shall be approved for one calendar year using the cost method of tariff regulation.

      In the case of an overestimation of the tariff approved in a simplified manner for the subjects of natural monopolies referred to in subparagraphs 1), 2) and 3) of paragraph 1 of this article, the authorized body, simultaneously with the introduction of new tariffs, must make a decision on compensation to consumers of the unjustifiably income received by subjects of natural monopolies.

      6. Subjects of natural monopolies referred to in paragraph 1 of this article, not later than five calendar days before the introduction of the tariff shall inform consumers about this with the provision of information containing the reasons for the change in tariff, the approved tariff estimates.

      7. A subject of natural monopoly whose assets were transferred to its ownership as a result of a transaction concluded or the sale of the debtor’s estate - a subject of natural monopoly declared bankrupt, shall continue to provide consumers with the regulated services at the tariff, approved for the previous owner of these assets until the new tariff is approved, but no more than six months from the date of receipt of the assets.

      8. The authorized body shall hold public hearings when approving the tariff in a simplified manner not later than ten calendar days before its approval.

Article 21. Approval of the investment program and its change

      1. The investment program shall be developed taking into account the development priorities and socio-economic indicators of the Republic of Kazakhstan and provide for activities aimed at:

      1) expansion, modernization, reconstruction, updating of existing assets, the creation of new assets directly used in the technological cycle of providing the regulated services;

      2) energy conservation and energy efficiency;

      3) improving the quality of the regulated services provided.

      2. The investment program shall be considered:

      1) by the authorized body for compliance by the subject of natural monopoly with the indicators of quality and reliability of regulated services and the achievement of performance indicators of the activities of the subjects of natural monopolies;

      2) by another state body or local executive body, the competencies of which are provided for in Articles 9 and 10 of this Law, regarding the technological feasibility and satisfaction of consumer demand for the regulated services in order to improve the quality and reliability of the regulated services provided.

      3. When considering a draft investment program, the following actions shall be excluded:

      1) non-conforming with the requirements, stipulated by paragraph 1 of this article;

      2) unsecured by the source of funding;

      3) unconfirmed by the supporting documents.

      The exclusion of all actions of the investment program in accordance with part one of this paragraph shall be the basis for refusal to approve the investment program.

      4. A refusal to approve an investment program by an authorized body, other state body or a local executive body, the competencies of which are provided for in Articles 8, 9 and 10 of this Law, shall be the basis for refusal to approve the tariff.

      5. The investment program shall be approved for the period of duration of the tariff.

      6. The implementation of the approved investment program and the return of borrowed funds raised for its implementation shall be carried out:

      at the expense of profits and depreciation, included in the tariff;

      at the expense of other sources not prohibited by the legislation of the Republic of Kazakhstan.

      7. A subject of natural monopoly shall have the right to apply before November 1 of the current year simultaneously to the authorized body and (or) another state body or local executive body, whose competences are provided for in Articles 8, 9 and 10 of this Law, with an application on changing the approved investment program without raising the tariff.

      In the case of the implementation of state programs, a subject of natural monopoly shall have the right to apply to the authorized body and (or) other state body or local executive body with an application on the change of the approved investment program.

      8. In the event that a subject of natural monopoly fails to execute the actions of the approved investment program for reasons beyond the control of the subject of natural monopoly (non-fulfillment of obligations by the other party to the contract, recognition of the competition (tender) as failed due to force majeure), the deadlines for implementing the actions of the approved investment program may be postponed for the next calendar year until March 1 of the year following the year of their implementation.

      It shall not be allowed to re-postpone the time period for execution of the actions of the approved investment program.

Article 22. Procedure for changing the tariff approved by the authorized body before its expiration date

      1. The grounds for changing the tariff approved by the authorized body before its expiration date shall be:

      1) changes in the value of strategic goods and (or) tariffs (prices), subject to state regulation for the transportation of strategic goods;

      2) declaration of an emergency in accordance with the legislation of the Republic of Kazakhstan;

      3) changes in tax rates and other obligatory payments to the budget in accordance with the tax legislation of the Republic of Kazakhstan;

      4) a change in the approved investment program in connection with the implementation of the state programs of the Republic of Kazakhstan;

      5) an increase in the volume of regulated services provided;

      6) changes in the prime cost of electricity and water of its own production, used by the nuclear power complex in the provision of regulated services for the production, transmission, distribution and (or) supply of thermal energy and water supply, associated with changes in the price of gas and (or) its transportation;

      7) failure to comply with the quality and reliability indicators of the regulated services;

      8) non-compliance of the activities of a subject of natural monopoly, providing a regulated service for transmission of electrical energy, with the requirements of paragraph 6 of Article 13-1 of the Law of the Republic of Kazakhstan "On electric power industry" on the basis of information from the state authority for state energy supervision and control;

      9) failure to achieve the performance indicators of the activities of subjects of natural monopolies;

      10) transfer of the main gas pipeline along the route "Kyzylorda - Zhezkazgan - Karaganda - Temirtau - Astana" to the subject of natural monopoly in the property lease (rent) or trust management.

      2. In the event of a change in the tariff before its expiration, except for the grounds provided for by sub-paragraphs 4), 5), 7), 8), 9) and 10) paragraph 1 of this article, the corresponding cost item shall change.

      If the tariff changes before its expiration in accordance with sub-paragraph 9) of paragraph 1 of this article, the approved tariff estimate shall exclude the investment costs (profit, depreciation, capital expenditures leading to an increase in the value of fixed assets), defined by the rules for tariff formation.

      3. Tariff change shall be carried out at the initiative of the authorized body or a subject of natural monopoly no more than once a year.

      4. To change the tariff approved by the authorized body before the expiry of its validity period, the subject of natural monopoly shall submit an application to the authorized body with supporting materials.

      The time period for consideration by the authorized body of an application to change the tariff before its expiration in cases provided for:

      1) sub-paragraphs 1), 2), 3) and 5) of paragraph 1 of this article, shall be not more than ten working days from the date of its submission;

      2) sub- paragraphs 4) and 6) of paragraph 1 of this article, shall not exceed thirty working days from the date of its submission;

      3) sub-paragraph 10) of paragraph 1 of this article shall be not more than ninety working days from the date of its submission.

      In the case of a tariff change initiated by an authorized body, a subject of natural monopoly shall be obliged to submit economically justified calculations and materials within a month from the date of receipt of the relevant information.

      5. If additional information is required when considering an application, the authorized body shall have the right to request it in writing with a time limit, but not less than five working days.

      At that, the consideration of the application shall be suspended until the receipt of the necessary information with the notification of the subject of natural monopoly about it.

      6. The tariff, changed in accordance with paragraph 1 of this article, shall be effective from the date established by the authorized body.

      7. When approving the tariff in the cases provided for in sub-paragraphs 4), 6), 7), 8) and 9) of paragraph1 of this article, the authorized body shall hold public hearings not later than ten calendar days before its approval.

      8. The subject of natural monopoly in the cases provided for by paragraph 1 of this article, not later than five calendar days before the introduction of the tariff shall inform the consumers about this and provide information indicating the reasons for the change in tariff, the approved tariff estimates.

Article 23. Procurements made by a subject of natural monopoly

      1. This article and the rules for the activities performed by the subjects of natural monopolies shall apply to procurements of a subject of natural monopoly to whom a tariff has been approved using the cost method of tariff regulation, except for:

      1) the government procurement;

      2) the procurements of subjects of natural monopolies, fifty or more percent of voting shares (participation shares) of which are directly or indirectly owned by the national managing holding;

      3) the procurements of electric and (or) thermal energy from an energy producing organization that uses renewable energy sources, which are carried out in accordance with the legislation of the Republic of Kazakhstan in the field of support of the use of renewable energy sources;

      4) the procurements of balancing electricity, electricity at centralized bidding, spot market in accordance with the legislation of the Republic of Kazakhstan on electricity;

      5) the procurements of subjects of natural monopolies of small capacity;

      6) the procurements of subjects of natural monopolies, the costs of which are not taken into account when approving the tariff.

      2. Procurement of goods, works, services shall be carried out in one of the following ways:

      1) a tender;

      2) a request for price offers;

      3) from one source;

      4) through commodity exchanges;

      5) through electronic trading platforms.

      3. Procurement of goods, works, services shall be carried out by means of a tender and (or) through commodity exchanges, electronic trading platforms, except for the cases, provided for in this article.

      4. Procurement by the method of requesting price offers shall be held for homogeneous goods, works, services if the annual volumes of such homogeneous goods, works, services in terms of value do not exceed 4000-fold monthly calculated indicator, established by the law on the republican budget for the relevant financial year. At that, the decisive condition shall be the price.

      5. Procurement from one source shall be carried out in the following cases:

      1) if the procurement through a tender or request for price offers are deemed to have failed;

      2) the procurement of goods, works, services at the prices, tariffs, established by the legislation of the Republic of Kazakhstan;

      3) the procurement of goods, works, services from a person who has exclusive rights with respect to goods, works, services purchased, or from a person who is a subject of a state or natural monopoly;

      4) the procurement of goods, works, services due to the force majeure, including the localization and (or) elimination of the consequences of emergency situations, elimination of accidents;

      5) the procurement of goods, works, services, related to entertainment expenses;

      6) the procurement of periodicals on paper and (or) in electronic form;

      7) the procurement of property (assets) sold at tenders (auctions):

      by bailiffs in accordance with the legislation of the Republic of Kazakhstan on enforcement proceedings and the status of bailiffs;

      conducted in accordance with the legislation of the Republic of Kazakhstan on rehabilitation and bankruptcy;

      conducted in accordance with the land legislation of the Republic of Kazakhstan;

      in the privatization of state property;

      8) the procurement of homogeneous goods, works, services, if the annual volume of such homogeneous goods, works, services in terms of value does not exceed the 100-fold amount of the monthly calculated indicator, established by the law on the republican budget for the relevant financial year;

      9) the procurement of services, related to the sending of an employee on a business trip, including round trip ticket, accommodation, transportation services, meals;

      10) when a customer, who purchased goods, works, services, needs to purchase goods, works, services from the same supplier in order to unify, standardize or ensure compatibility.

      Note RCLI!
      This version of paragraph 6 is suspended until 01.01.2020 by the Law of the Republic of Kazakhstan dated 27.12.2018 No. 204-VІ (for the current version, see paragraph 2 of Article 36 of this Law).

      6. Procurements of a subject of natural monopoly shall be carried out in electronic form by posting information on its Internet resource, and in the absence of its Internet resource - by providing the authorized body with information on each stage of the procurement process for its publication on its Internet resource, except for the cases of procurement through commodity exchanges, electronic trading platforms that publish the trading results on their own Internet resources.

      7. In the part not regulated by this article, procurements shall be carried out in accordance with the rules for the activities of the subjects of natural monopolies.

      8. A subject of natural monopoly shall make procurement of strategic goods directly from manufacturers of strategic goods, except for the following cases:

      1) the presence of a shortage of electrical energy in the relevant product market, confirmed by the state body exercising leadership in the field of electric power industry;

      2) non-compliance of the subject of a natural monopoly with the conditions for participation in the wholesale market of electric energy, imposed on consumers;

      3) the procurement of electrical energy for the economic needs of the subject of natural monopoly in the field of transmission of electrical power, electrical energy in order to compensate for deviations of the actual interstate balance of electric energy flow from the planned one at the border with the power systems of neighboring states, imbalances of electricity, purchased for compensation of technological consumption of electrical energy in the networks of the subject of natural monopoly in the field of electric power transmission;

      4) procurement of gas from gas distribution organizations in accordance with the legislation of the Republic of Kazakhstan on gas and gas supply;

      5) procurement of electric energy in accordance with the legislation of the Republic of Kazakhstan in the field of support of the use of renewable energy sources;

      6) procurement of balancing electricity, electricity at centralized bidding, spot market in accordance with the legislation of the Republic of Kazakhstan on electricity;

      7) the procurement of electrical energy for the economic needs of a subject of natural monopoly in the field of electric power transmission in centralized bidding at prices not higher than the maximum tariff level, established in accordance with the legislation of the Republic of Kazakhstan on electric power industry.

      9. A individual in respect of whom a court decision has entered into force confirming the fact of non-fulfillment or improper performance of obligations to a subject of natural monopoly, within two years from the date of entry into force of a court decision, shall not be allowed to participate in procurement by the methods provided for in subparagraphs 1), 2) and 4) of paragraph 2 of this article.

Article 24. Consumer access to a regulated service

      1. Consumer access to a regulated service shall be provided:

      1) by posting information provided for in Article 25 of this Law on the Internet resource of a subject of natural monopoly, in its absence - by submitting it to an authorized body for posting on its Internet resource;

      2) by the issuance of technical conditions for connection to the networks of a subject of natural monopoly: transmission of electric, thermal energy, water supply and sewage, as well as to main gas pipelines and oil pipelines, to gas distribution systems and group reservoir installations in accordance with the development plan of engineering communications in accordance with the approved detailed planning project (building schemes) or to increase the volume of regulated services;

      3) by the fulfillment of the technical conditions by the customer for connection to the regulated service;

      4) by connecting to a regulated service or increasing the volume of a regulated service;

      5) by the conclusion of a contract for provision of a regulated service.

      2. Technical conditions for connection to the networks of a subject of natural monopoly: transmission of electric, thermal energy, water supply and water sewage, as well as main gas pipelines and oil pipelines, gas distribution systems and group reservoir installations or an increase in the volume of regulated services shall be issued by a subject of natural monopoly in the period established by this Law.

      3. The requirement of subparagraph 1) of paragraph 1 of this article shall not apply to the subjects of natural monopolies that provide the regulated services, specified by subparagraphs 10), 11), 12) and 13) of paragraph 1 of article 5 of this Law.

      4. Connection to the networks of power supply, heat supply, gas supply, water supply and drainage shall include the following stages:

      1) filing an application for the issuance of technical conditions for connection to the networks of a subject of natural monopoly or an increase in the volume of a regulated service;

      2) consideration of an application for the issuance of technical conditions, received through the State Corporation, by a subject of natural monopoly for the completeness of the attached documents, except for the facilities specified in paragraph 6 of this article;

      3) consideration by the subject of natural monopoly of the consumer's application for issuing technical conditions for connecting to the networks of the subject of natural monopoly or increasing the volume of the regulated service;

      4) the issuance by the subject of a natural monopoly of technical conditions;

      5) performance of work by the consumer in accordance with the technical conditions;

      6) informing the consumers about the completion of work and readiness to connect to the networks of the subject of the natural monopoly.

      5. Acceptance of an application for issuance of technical conditions for connecting to the networks of a subject of natural monopoly or increasing the volume of a regulated service and issuance of the result of its consideration, except for the facilities specified in paragraph 6 of this article, shall be carried out by the State Corporation, via the “electronic government” web portal or the office of the subject of natural monopoly.

      When accepting an application for issuing technical conditions for connecting to the networks of a subject of natural monopoly or increasing the volume of a regulated service and issuing the results of its consideration, except for the facilities specified in paragraph 6 of this article, the State Corporation shall charge a fee for provision of these services.

      6. An application for issuing technical conditions for connecting the construction objects to the networks of a subject of natural monopoly shall be formed by the architecture and city planning body during the preparation of the architectural planning task and send it electronically to the subject of natural monopoly.

      Issuance of the result of consideration of an application for the issuance of technical conditions for connection of construction objects to the networks of a subject of natural monopoly shall be carried out by the architecture and city planning bodies along with the architectural and planning task in accordance with the legislation of the Republic of Kazakhstan on architectural, urban planning and construction activities.

      7. The issuance of technical conditions for connection to the networks of a subject of natural monopoly at the request of the architecture and urban planning bodies shall be carried out by a subject of natural monopoly:

      1) for technically simple objects - within two working days;

      2) for technically complex objects - within five working days.

      Technical conditions for connection to the networks of a subject of natural monopoly or increase in the volume of regulated services shall be issued for the regulatory period of design and construction.

      8. The application form for issuing technical conditions for connection to the networks of a subject of natural monopoly or the increase of the volume of a regulated service and the list of documents attached to the application shall be established by the authorized body.

      Technical conditions should define an exhaustive list of requirements for the interconnected networks of the subject of natural monopoly, materials, equipment, devices, metering devices.

      9. Application for issuance of technical conditions for connection to the networks of a subject of natural monopoly or increase in the volume of a regulated service, except for the facilities specified in paragraph 6 of this article, received through the State Corporation, shall be returned by the subject of natural monopoly within two working days through a web portal "e-government" or the office of the subject of a natural monopoly in the case of provision of an incomplete package of documents.

      10. When granting access to a regulated service, a subject of natural monopoly shall be prohibited:

      1) to charge fees for providing information about free capacity;

      2) to require the submission of permits and other documents of state bodies, non-governmental organizations that are not related to the provision of a regulated service;

      3) to impose other requirements on the consumer, except for compliance with technical conditions for connecting to the networks of the subject of a natural monopoly or increasing the volume of the regulated service;

      4) to create unequal conditions of access to the regulated service;

      5) to limit the activity of the consumer in performing work in accordance with the technical conditions for connecting to the networks of a subject of natural monopoly or increasing the volume of a regulated service;

      6) to require approval of the construction project for compliance with the technical conditions for connecting to the networks of the subject of natural monopoly or increasing the volume of the regulated service.

      11. An application for issuing technical conditions for connection to the networks of a subject of natural monopoly or an increase in the volume of a regulated service, except for the facilities specified in paragraph 6 of this article, shall be considered within five working days, following which the subject of natural monopoly shall:

      1) issue the technical conditions;

      2) refuse to issue technical conditions.

      12. Refusal to issue technical conditions shall be allowed in the following cases:

      1) lack of free and available capacities, places, capacities of networks of a subject of natural monopoly, necessary to provide the required volume of regulated services;

      2) the absence of networks of a subject of natural monopoly or other property necessary for provision of a regulated service.

      13. In case of refusal to issue technical conditions, a subject of natural monopoly:

      1) shall attach the decision on refusal to issue technical conditions with the well-reasoned grounds;

      2) shall send to the authorized body a copy of the decision on refusal to issue technical conditions and the well-reasoned grounds with the calculation of the shortage of free and available capacity, places, capacities of networks of the subject of natural monopoly or lack of networks of the subject of the natural monopoly or other property necessary to provide the regulated service.

      14. In case of refusal to issue technical conditions for connecting a construction object, the subject of natural monopoly shall offer the alternative sources of connection to the networks of the subject of natural monopoly and indicate the terms of connection to the centralized communication networks in accordance with the engineering infrastructure development plan in accordance with the approved detailed planning project.

      15. The authorized body in connection with the receipt of a copy of the decision on refusal to issue technical conditions for connection to the networks of a subject of natural monopoly:

      1) not later than seven working days, shall send to the consumer a letter confirming the reasonability of the refusal to issue technical conditions for connection to the networks of a subject of natural monopoly or the need to file a complaint to an authorized body to initiate an audit of the activities of a subject of natural monopoly;

      2) when establishing the fact of absence of free and available capacities, places, capacities of the networks of the subject of natural monopoly or lack of networks of the subject of natural monopoly or other property of the subject of natural monopoly necessary to provide the required volume of regulated services, shall inform the subject of natural monopoly about the need to change the approved investment program in the presence of economic feasibility and creation of conditions for connecting to a regulated service.

      16. After completion of the work, the consumer shall inform the subject of natural monopoly about the completion of the work and readiness to receive the regulated service, who within two working days from the date of receipt of the information shall check the completed work according to the issued technical conditions and readiness to receive the regulated service.

      If the performed work conforms to the technical conditions, the connection to the regulated service shall be carried out within one working day.

      17. If the work performed does not comply with the technical conditions, the subject of natural monopoly within one working day shall inform the consumer about the unpreparedness of the construction object to receive the regulated service.

      After elimination of the revealed violations, the consumer shall re-inform about the completion of work and readiness to receive the regulated service.

      18. Connection to the regulated service shall include the following works:

      shutdown of the existing network by the subject of the natural monopoly;

      connection of the consumer to the existing network;

      switching on of the existing network by the subject of natural monopoly.

      19. A regulated service shall be provided by a subject of natural monopoly after the conclusion of a contract for provision of a regulated service.

Article 25. Publicity of the process of state regulation of activities of subjects of natural monopolies

      1. The publicity of the process of state regulation of activities of subjects of natural monopolies shall be ensured by:

      1) the placement of information relating to the state regulation of activities of subjects of natural monopolies in the media and on the Internet resource of the authorized body;

      2) holding public hearings;

      3) making reports by subjects of natural monopolies to the consumers and other interested parties;

      4) informing consumers and the authorized body about the introduction of the tariff;

      5) carrying out public monitoring and (or) technical expertise of the execution of the approved investment program, compliance with quality and reliability indicators for the regulated services and achievement of performance indicators for activities of subjects of natural monopolies.

      2. A subject of natural monopoly, within the terms established by paragraph 6 of this article, shall publish reports in the mass media distributed in the territory of the respective administrative-territorial unit to the consumers and other interested parties on the execution of the approved tariff estimate, on the execution of the approved investment program, on compliance with the quality and reliability indicators of the regulated services and achievement of performance indicators of subjects of natural monopolies with the justifications, including financial statements.

      3. The authorized body shall place on its Internet resource:

      1) the State Register of subjects of natural monopolies;

      2) legal acts of the authorized body;

      3) applications with the attached documents, submitted on electronic media, taking into account the requirements, established by paragraph 7 of this article;

      4) approved, established and defined tariffs;

      5) approved tariff estimates and investment programs;

      6) reports of subjects of natural monopolies on the execution of the approved tariff estimates, on the execution of the approved investment programs, on compliance with the quality and reliability indicators of the regulated services and the achievement of performance indicators of the subjects of natural monopolies;

      7) a register of the issued consents for performing certain actions by a subject of natural monopoly, as well as notifications received from a subject of natural monopoly on activities that are not related to the regulated services, in accordance with the Law of the Republic of Kazakhstan “On permits and notifications”;

      8) resolutions on bringing the subjects of natural monopolies to administrative responsibility;

      9) court decisions on the results of proceedings with the participation of the authorized body;

      10) quality and reliability indicators of the regulated services;

      11) indicators of the effectiveness of the activities of the subjects of natural monopolies;

      12) other information relating to the implementation of the state regulation of activities of subjects of natural monopolies.

      4. Public hearings on the discussion of the draft tariff shall be held with the invitation of deputies of the Parliament of the Republic of Kazakhstan, maslikhats, representatives of local governments, state bodies, subject of natural monopoly, the media, public associations, independent experts, consumers and other interested parties.

      5. The authorized body shall publish in periodicals the information about the date and place of public hearings to discuss the draft tariff, thirty calendar days before the day of their holding, and on its Internet resource - the results of public hearings to discuss the draft tariff, including discussions of transcripts, meeting minutes with decisions taken on the issues at hand, within ten calendar days after the day they were held.

      If public hearings are held when considering an application for setting tariffs for utilities in the spheres of natural monopolies, the regulated services for the production, transmission, distribution and (or) supply of thermal energy, the authorized body shall further publish information on the date and place of public hearings in periodic print publications distributed in the territory of the respective administrative-territorial unit.

      When setting the tariff by indexation method and determining the tariff on the basis of a concluded public-private partnership contract, including a concession contract, the subject of natural monopoly shall place on its Internet resource or in print media, distributed in the territory of the relevant administrative –territorial unit, the information about the date and the venue of public hearings, thirty calendar days before their holding.

      6. Not later than August 1 of the current calendar year and May 1 of the next calendar year, the subject of natural monopoly shall make reports on the results of the half year and year on the implementation of the approved tariff estimates, on the execution of the approved investment program, on compliance with the quality and reliability indicators of the regulated services and the achievement of performance indicators of the subjects of natural monopolies to the consumers and other interested parties.

      7. Any information, provided by a subject of natural monopoly for approval of the tariff and in the performance of duties provided for by this Law, shall not be recognized as commercial.

      8. Report to consumers and other interested parties shall be made in the form of a public hearing.

      9. The announcement of the upcoming report shall be published by a subject of natural monopoly, included in the local section of the State Register of subjects of natural monopolies, in periodicals, issued at least once a week and distributed in the territory of the respective administrative-territorial unit, and by a subject of natural monopoly, included in the republican section of the State Register of subjects of natural monopolies, - in a periodical publication, issued at least once a week and distributed on the entire territory of the Republic of Kazakhstan, not later than fifteen working days before the meeting and shall include the following information:

      1) the name and location of the subject of natural monopoly;

      2) the date and venue of the report;

      3) the type of regulated services provided.

      10. A month before the report, the subject of natural monopoly shall inform the authorized body.

      11. After the upcoming report is announced, five working days prior to the report, the subject of natural monopoly shall post on its Internet resource the information, specified in paragraph 13 of this article, and in case of its absence - shall provide the authorized body with information for its posting on its Internet resource.

      12. A subject of natural monopoly shall provide access to the venue for all those who wish to participate in the report.

      13. A report of a subject of natural monopoly must contain information with justifications in accordance with the rules for the implementation of activities by subjects of natural monopolies.

      14. In the report to the consumers and other interested parties, the subject of natural monopoly shall give a detailed explanation of the quality of the regulated service provided.

      15. The requirements stipulated by paragraph 2, parts two and three of paragraph 5, and paragraphs 6, 8, 9, 10, 11, 12, 13, and 14 of this article shall not apply to subjects of natural monopolies of small capacity and newly created subjects of natural monopolies.

Chapter 4. PARTICIPANTS OF SPHERES OF NATURAL MONOPOLIES

Article 26. Rights and obligations of the subject of natural monopoly

      1. A subject of natural monopoly shall have the right:

      1) to require consumers to comply with the technical requirements, established by the subject of natural monopoly in accordance with the legislation of the Republic of Kazakhstan;

      2) to reduce the tariff for all consumers during the tariff period;

      3) to independently manage the underutilized part of the costs, provided for in the approved investment program subject to the implementation of actions and in the approved tariff estimates, resulting from cost savings due to the use of more efficient methods and technologies, the implementation of an action plan of energy saving and energy efficiency, developed following the energy audit, the implementation of the measures to reduce regulatory technical losses or reduce the volumes of the rendered regulated services for the reasons beyond the control of the subject of natural monopoly, or the results of the competition (tender) procedures;

      4) to require from consumers to provide access the metering device for taking readings and their sealing;

      5) to apply to the authorized body with an application for making changes to the approved tariff estimate, as well as to the authorized and (or) other state body or local executive body - with an application for making changes to the approved investment program;

      6) to simultaneously with the application for the regulated services of the main railway networks to provide the draft price limits for the regulated services of the main railway networks in accordance with the rules for the tariff formation;

      7) to independently reduce and increase the tariff for the regulated services of mainline railway networks within the approved price limits for the regulated services of mainline railway networks in accordance with the rules for the tariff formation;

      8) to apply to the authorized body with an application for making changes to the approved price limits for the regulated services of mainline railway networks in accordance with the rules for the tariff formation;

      9) to provide regulated services and carry out activities not related to the regulated services in accordance with the requirements of the legislation of the Republic of Kazakhstan;

      10) to apply to the authorized body with an application on the introduction of amendments and additions, the adoption of new or cancellation of the existing legal acts of the authorized body;

      11) to appeal against the actions (inaction) of the authorized body, as well as its officials, instructions to eliminate violations of the legislation of the Republic of Kazakhstan on natural monopolies in court;

      12) have other rights established by the laws of the Republic of Kazakhstan.

      2. A subject of natural monopoly shall:

      1) apply to the authorized body with an application for inclusion in the State Register of subjects of natural monopolies, exclusion from it, on introduction of changes and (or) additions to it;

      2) apply to the authorized body with the application in accordance with this Law;

      3) provide a regulated service at the tariff, approved in accordance with this Law;

      4) provide consumers with access to the regulated service, except for the cases provided for by paragraph 12 of Article 24 of this Law;

      5) provide consumers with equal conditions for access to the regulated service;

      6) not establish additional requirements not related to the provided regulated service;

      7) ensure acceptance of payments from consumers for utilities provided to them in the spheres of natural monopolies through their own cash registers and (or) second-tier banks and organizations that carry out certain types of banking operations, Internet resources or terminals, and if necessary - through payment agents and (or) payment organizations;

      8) in accordance with the model contract, conclude individual contracts with consumers for each type of regulated services provided;

      9) develop and approve methods for maintaining separate accounting of revenues, costs and involved assets for each type of regulated services of subjects of natural monopolies in accordance with the procedure for maintaining separate accounting of revenues, costs and involved assets for each type of regulated services and in general for activities not related to the regulated services;

      10) keep separate records of revenues, costs, and involved assets for each type of regulated services and in general for activities not related to the regulated services;

      11) recalculate the cost of a regulated heat supply service taking into account the actual outdoor temperature directly to consumers or if it is impossible to determine the location of the consumer by reducing the tariff when paying for the regulated heat supply service;

      12) at the request of consumers, provide information about the tariff, the quality of the regulated service, and the conditions for the provision of the regulated service;

      13) report on the execution of the approved tariff estimates, on the execution of the approved investment program, on compliance with the quality and reliability indicators of the regulated services and the achievement of performance indicators of subjects of natural monopolies;

      14) inform consumers about the tariff, its change in the terms, established by this Law;

      15) execute the approved tariff estimates;

      16) execute actions of the approved investment program;

      17) annually, not later than May 1 of the year following the reporting period, submit reports to the authorized body on the execution of the approved tariff estimate, on the execution of the approved investment program, to another state body or local executive body - a report on the execution of the approved investment program;

      18) procure goods, works, services, the costs of which are taken into account when approving the tariff, in accordance with Article 23 of this Law;

      19) at the request of consumers, provide information contained in the approved tariff estimates and the investment program;

      20) when approving a tariff using the incentive method of tariff regulation, annually not later than May 1 of the reporting period, submit to the authorized body, another state body or local executive body reports on incomes, expenses actually achieved during the reporting year, compliance with quality and reliability indicators of regulated services , achievement of performance indicators of subjects of natural monopolies;

      21) quarterly place on its Internet resource or, in its absence, submit to the authorized body for placement on its Internet resource:

      the information about the reserve, the availability of free and available capacity, capacities, places, capacities of the networks of the subject of the natural monopoly;

      schemes for placing networks or other property used in the provision of regulated services, except for information relating to the state secrets and other secrets protected by law in accordance with the laws of the Republic of Kazakhstan and regulated services, provided for in sub-paragraphs 10), 11), 12) and 13) of paragraph 1 of Article 5 of this Law;

      information on the progress of execution of the approved investment program (location of objects, stage of execution with photo and video attached, deadlines for execution and cost of activities of investment programs), except for information relating to the state secrets and other secrets protected by law in accordance with the laws of the Republic of Kazakhstan;

      22) upon request of the authorized body, provide the necessary information on paper or in electronic form within the terms, established by the authorized body, which may not be less than five working days from the date of receipt of the relevant request by the subject of natural monopoly;

      23) inform the authorized body about the tariff, its change not later than thirty calendar days prior to its entry into force;

      24) within the deadlines, established by paragraph 6 of Article 25 of this Law, post reports on the implementation of the approved tariff estimates, the execution of the approved investment program, compliance with the quality and reliability indicators of the regulated services and the achievement of performance indicators of the subjects of natural monopolies to the consumers and other interested parties not later than five calendar days from the date of the report in the media, including on its Internet resource or Internet resource of the authorized body, in accordance with the rules of tariff formation;

      25) annually publish a report on the provision of utility services in the spheres of natural monopolies to the consumers and other interested parties not later than five calendar days from the date of the making the report in a periodical, on its Internet resource or the Internet resource of the authorized body in accordance with the rules for tariff formation;

      26) not to transfer the property, owned on the basis of the right of ownership or on any other legal basis, used in the technological cycle in the production and (or) provision of a regulated service, to trust management, property lease (rent), including leasing, except for the cases, provided for in paragraphs 1 and 2 of Article 13-1 of the Law of the Republic of Kazakhstan "On electric power industry", and the regulated service, provided for by sub-paragraph 13) of paragraph 1 of Article 5 of this Law;

      27) not assign the right of claim, related to the provided regulated service, except for the assignment of the right of claim to a special financial company for project financing and securitization transactions, provided that this does not lead to an increase in the tariff;

      28) alienate the property, used in the technological cycle in the production and (or) provision of the regulated service at the auction, except for the cases of transferring the property to the state, as well as the transfer of electrical networks by subjects of natural monopolies, providing the regulated service for the transmission of electric energy, specified in paragraph 1 of Article 13-1 of the Law of the Republic of Kazakhstan "On electric power industry".

      In case of alienation of the access road, the regulated services of which belong to the sphere of natural monopoly, the owner of this access road shall be obliged to provide the pre-emptive right to buy it to the existing consumer before third parties in the case of the equal conditions and redemption amount, presented in the tender bids.

      If there are two or more existing consumers, the pre-emptive right shall be granted to the consumer who has received a greater volume of the regulated services over the past twelve months (thous. wagon / km, wagon / hour) in the case of equal conditions and the redemption amount, presented in the tender bids;

      29) not include in the tariff the costs not related to the provision of the regulated service;

      30) acquire and install metering devices to the consumers in accordance with sub-paragraph 8) of paragraph 23 of Article 15 of this Law, except for the cases of acceptance and commissioning of construction objects;

      31) charge fees on consumers for the purchase and installation of a metering device in accordance with subparagraph 8) of paragraph 23 of Article 15 of this Law, except for the cases of acceptance and commissioning of construction objects;

      32) provide access to the objects of the approved investment program and provide information on execution of the approved investment program to the persons authorized to conduct public monitoring and (or) technical expertise of the execution of the approved investment program, compliance with quality and reliability indicators of regulated services, and achievement of performance indicators of subjects of natural monopolies.

      The duties provided for in sub-paragraphs 10), 13), 18), 21), 24), 25) and 29) of part one of this paragraph shall not apply to subjects of natural monopolies of small capacity and newly created subjects of natural monopolies.

Article 27. Consumer rights and obligations

      1. The consumer shall have the right:

      1) to purchase the regulated services at the tariffs in accordance with this Law;

      2) to participate in public hearings;

      3) to apply to the authorized body with an application on the introduction of amendments and (or) additions, the adoption of new and (or) on the cancellation of the existing legal acts of the authorized body.

      The consumer shall have other rights, established by the laws of the Republic of Kazakhstan.

      2. The consumer shall be obliged:

      1) to pay the regulated services in a timely manner and in full at the tariffs in accordance with this Law;

      2) to have metering devices;

      3) to provide access of the representative of the subject of natural monopoly to the metering device;

      4) timely and fully pay for the purchase and installation of a metering device in accordance with subparagraph 8) of paragraph 23 of Article 15 of this Law, except for the cases of acceptance and commissioning of construction objects;

      5) in accordance with the model contracts, approved by the authorized body, to conclude individual contracts with the subject of natural monopoly for each type of the regulated services provided;

      6) to fulfill the technical requirements, established by the subject of natural monopoly in accordance with the legislation of the Republic of Kazakhstan.

Article 28. Tariff Policy Council

      1. The Tariff Policy Council shall be a consultative and advisory body to the authorized body.

      2. The Tariff Policy Council may include deputies of the Parliament of the Republic of Kazakhstan, representatives of the authorized body and other state bodies, the National Chamber of Entrepreneurs of the Republic of Kazakhstan, public associations, associations of private enterprises, subjects of natural monopolies, experts and other interested parties.

      3. The Tariff Policy Council shall have the right to create commissions on problematic issues of tariff formation in the spheres of natural monopolies.

      4. The regulation on the Tariff Policy Council and its personal composition shall be approved by the authorized body.

      5. The Tariff Policy Council shall:

      1) develop proposals to the authorized body for draft regulatory legal acts in the spheres of natural monopolies;

      2) provide advisory, methodological and other support to the authorized body;

      3) promote the involvement of public, scientific and other organizations to participate in the implementation of the state policy in the spheres of natural monopolies;

      4) make proposals to the authorized body to determine the level of tariff indexation and the forecast index of the tariff;

      5) make proposals to the authorized body to determine the method of tariff regulation of the sphere of natural monopoly;

      6) make proposals to the authorized body to include in the list of subjects of natural monopolies, whose tariffs are approved using the incentive method of tariff regulation;

      7) discuss and develop recommendations for draft investment programs and changes made to the existing investment programs;

      8) hear reports on the execution of the approved tariff estimates, on the execution of the approved investment programs, on compliance with the quality and reliability indicators of the regulated services and the achievement of performance indicators of the subjects of natural monopolies;

      9) coordinate the terms of placement by the authorized body of the state social order for public associations.

Article 29. Public associations

      Public associations, in addition to the rights, established by the legislation of the Republic of Kazakhstan on public associations, shall also:

      1) participate in development of the main directions of the state policy in the spheres of natural monopolies;

      2) send proposals to the authorized body on draft regulatory legal acts in the spheres of natural monopolies;

      3) participate in consideration by the authorized body of the draft tariffs and draft investment program, reports on the implementation of the approved tariff estimates, the execution of the approved investment program, compliance with the quality and reliability indicators of regulated services and the achievement of performance indicators of subjects of natural monopolies;

      4) disseminate information about the rights and obligations of consumers and subjects of natural monopolies;

      5) represent the interests of consumers in relations with the authorized body, other state bodies, subjects of natural monopolies, courts and other persons;

      6) perform other functions not prohibited by the legislation of the Republic of Kazakhstan.

Chapter 5. THE STATE CONTROL

Article 30. The State control

      1. The State control in the spheres of natural monopolies shall be carried out in accordance with the Business Code of the Republic of Kazakhstan.

      When exercising state control in the spheres of natural monopolies, the authorized body shall take the following response measures:

      1) initiate an administrative violation case;

      2) issue an instruction to eliminate violations of the legislation of the Republic of Kazakhstan on natural monopolies;

      3) transfer materials to law enforcement and other authorities.

      2. When implementing the state control, the authorized body in the spheres of natural monopolies shall interact with law enforcement agencies within the competence, established by the legislation of the Republic of Kazakhstan.

Article 31. An instruction on elimination of violation of the legislation of the Republic of Kazakhstan on natural monopolies

      1. An instruction to eliminate a violation of the legislation of the Republic of Kazakhstan on natural monopolies shall be executed by a subject of natural monopoly within the period established by the instruction, which must be at least ten calendar days from the date of its receipt.

      2. In the event that a subject of natural monopoly fails to issue an instruction to eliminate a violation of the legislation of the Republic of Kazakhstan on natural monopolies, the authorized body shall file a lawsuit against forcing the subject of natural monopoly to perform the actions, specified in the instruction.

Chapter 6. RESPONSIBILITY IN THE SPHERES OF NATURAL MONOPOLIES

Article 32. Responsibility for violation of the legislation of the Republic of Kazakhstan on natural monopolies

      Violation of the legislation of the Republic of Kazakhstan on natural monopolies shall entail liability, established by the laws of the Republic of Kazakhstan.

Article 33. Temporary compensating tariff

      1. The temporary compensating tariff shall be approved based on the results of:

      1) verification of the activities of the subject of natural monopoly;

      2) an annual analysis of the reports on the execution of the approved tariff estimates, the execution of the approved investment program submitted by the subject of natural monopoly.

      2. The grounds for approval of the temporary compensating tariff shall be:

      1) the excess of the tariff, approved in accordance with this Law;

      2) inappropriate use of depreciation funds;

      3) non-fulfillment of the actions of the approved investment program, included in the tariff, except for the following cases:

      reduction of the volumes that resulted in shortfalls in the funds, provided for in the approved tariff estimate for the implementation of the approved investment program. At the same time, the amount of lost income, proportionate to the decrease in the volumes shall be excluded from the total amount of non-fulfillment of the actions of the approved investment program; the temporary compensating tariff shall be introduced by the authorized body for the remaining amount of unjustified income;

      money savings, resulting from the conducted competition (tender) procedures;

      cost savings due to the introduction of more efficient methods and technologies;

      4) non-fulfillment of the cost items of the approved tariff estimate by more than 5 percent of the amount provided for by the approved tariff estimate, except for the following cases:

      cost savings due to the use of more efficient methods and technologies, the implementation of an action plan for energy saving and energy efficiency, developed as a result of an energy audit, and measures to reduce regulatory technical losses;

      cost savings due to the reduced volumes of regulated services for reasons beyond the control of the subject of natural monopoly. In this case, the amount of lost income, proportionate to the decrease in volumes shall be excluded from the total amount of non-fulfillment of the approved tariff estimates; the temporary compensating tariff shall be introduced by the authorized body for the remaining amount of unjustified income;

      money savings, resulting from the competition (tender) procedures.

      3. The temporary compensating tariff shall not apply in the case of full compensation by the subject of natural monopoly of the unjustifiably received income to the consumers, including by a court decision.

      4. The temporary compensating tariff shall be approved taking into account the refinancing rate of the National Bank of the Republic of Kazakhstan on the day of the decision making.

Article 34. Reimbursement of damages by a subject of natural monopoly, caused by violation of this Law

      Actions (inaction) of a subject of natural monopoly that contradict the laws of the Republic of Kazakhstan on natural monopolies and cause losses to another individual or legal entity, including by overestimating the tariff, unjustified refusal to enter into and perform a contract for provision of a regulated service, shall entail compensation of damages by the subject of natural monopoly in accordance with the civil legislation of the Republic of Kazakhstan.

Article 35. Indemnification of damages caused to the subject of natural monopoly by unlawful decisions, actions (inaction) of the authorized body, as well as its officials

      In case if unlawful decisions, actions (inaction) of the authorized body, as well as its officials caused damage to the subject of natural monopoly, it shall be entitled to claim compensation for these losses in accordance with the civil legislation of the Republic of Kazakhstan.

Chapter 7. TRANSITIONAL AND FINAL PROVISIONS

Article 36. Procedure for enactment of this Law

      1. This Law shall enter into force upon the expiry of ten calendar days after the day of its first official publication.

      2. Suspend the effect of paragraph 6 of Article 23 of this Law until January 1, 2020, establishing that during the period of suspension this paragraph is valid as follows:

      "6. Procurement of a subject of natural monopoly shall be carried out on paper or in electronic form by posting information on its Internet resource, and in the absence of its Internet resource - by providing the authorized body with information on each stage of the procurement process for its placement on its Internet resource, except for the cases of procurement through commodity exchanges, electronic trading platforms that post the trading results on their own Internet resources.".

      3. To recognize the Law of the Republic of Kazakhstan dated July 9, 1998 "On natural monopolies" as invalid (Bulletin of the Parliament of the Republic of Kazakhstan, 1998, No. 16, Article 214; 1999, No. 19, Article 646; 2000, No. 3-4, Article 66; 2001, No. 23, Article 309; 2002, No. 23-24, Article 193; 2004, No. 14, Article 82; No. 23, Article 138 , 142; 2006, No. 2, Article 17, No. 3, Article 22, No. 4, Article 24, No. 8, Article 45, No. 13, Article 87, 2007, No. 3, Article 20; No. 19, Article 148; 2008, No. 15-16, Article 64; No. 24, Article 129; 2009, No. 11-12, Article 54; No. 13-14, Article 62; No. 18, Article 84; 2010, No. 5, Article 20, 23; 2011, No. 1, Article 2, No. 11, Article 102, No. 12, Article 111, No. 13, Article 112; No. 16, Article 129; 2012, No. 2, Article 9, 15, No. 3, Article 21, No. 4, Article 30, No. 11, Article 80, No. 12, Article 85; No. 15, Article 97; 2013, No. 4, Article 21; No. 10-11, Article 56; No. 15, Article 79, 82; No. 16, Article 83; 2014, No. 1, Article 4; No. 4-5, Article 24; No. 10, Article 52, No. 11, Article 64, No. 14, Article 87, No. 16, Article 90, No. 19-І, 19-II, Article 96, No. 23, Article 143, 2015, No. 9, Article 46, No. 19-І, Article 100, No. 20-IV, Article 113, No. 20-VII, Article 117, No. 21-II, Article 131; No. 22-II, Article 144; No. 22-V, Article 156; No. 22-VI, Article 159; 2016, No. 6, Article 45; № 8-І, Article 60; No. 24, Article 124; 2017, No. 4, Article 7; No. 9, Article 17, 22; № 14, Article 54; No. 20, Article 96; 2018, No. 10, Article 32; No. 19, Article 62).

      President of the
Republic of Kazakhstan
N. NAZARBAYEV

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