A local distribution system, miestna distribučná sústava in Slovak, is an electricity network with at most 100,000 connection points. In practice that means the internal grid of an industrial park, a campus or a shopping centre. Running one is a licensed job. The operator holds a licence from the energy regulator. It charges a network tariff fixed in a published price decision, keeps an approved operating code, and owes statutory quality standards. It also changes who may sell power behind the meter, because the rule that lets a landlord recharge power at cost does not apply here.
What a local distribution system is
Slovak law splits distribution networks by a headcount, not by size. A network with more than 100,000 connection points is a regional system. There are three of those in the country. A network with at most 100,000 is a local one. Every industrial park, business campus and shopping centre sits on that side of the line. Voltage, cable length and who paid for the build do not enter into it.
One line in the same rule catches landlords out. Owning a transformer on its own is not ownership of a network. Nor is owning part of an electrical station. What matters is the network behind the kit. A park that installs its own substation has not yet decided anything. The question is whether power then flows on to other companies over cable the estate owns.
The Energy Act sketches the same thing a second time, in the rule on storage and charging points. Before the regulator lets such an operator own a battery, four things must be true. At most 10,000 connection points. Supply only inside a fenced area of industrial, commercial or shared use. No households, except those of the owner’s own staff. And users whose operations are linked, or who are mainly the owner and its affiliates. That is the closed-system idea, tucked into a consent rule.
Why the licence matters to a tenant
Distributing power and selling power are both licensed activities. There is one well-known way round it. Selling power to other people at purchase prices, with no increase at all, is not treated as doing business in energy. The unit price on the invoice must match the price on the tax document behind it. Recharge at cost, keep nothing, and no licence is needed.
The next sentence in the statute is the one estates miss. That let-off does not cover supply to end customers connected to a network of this kind. Once the estate wiring qualifies, the landlord is selling, not recharging. Selling needs a licence, just as distributing does. A park cannot be a grid for the cable and a bookkeeper for the electron.
A door also shuts behind the landlord. Some estates build the internal network as a customer installation, or as a service connection. If that build would otherwise have needed a certificate for an energy facility, the regulator must refuse a licence over it later. Only the regional operator escapes the rule. Wire the estate the cheap way, and the licence route can be closed years on, at the point a tenant asks for its own supplier. Our post follows the same chain with the tariffs and the reliability figures attached, and asks who is actually selling inside the fence.
What the tenant pays, and who sets it
Two prices arrive together, and they are governed apart. Access to a network and the distribution of power are price regulated by statute. Every operator therefore works to a price decision from the regulator. That decision names the rates and the rules for handing them out. Supply is regulated only for the supplier of last resort, and for the groups the government calls vulnerable. Those are households and social care. A factory or a warehouse is not among them, so the commodity half is a real negotiation.
The price decree offers the operator two routes. It can adopt the tariffs of the network it hangs off, which makes the charge inside the park identical to the regional one. Or it can file its own proposal and defend its costs. An operator that drops adopted tariffs cannot simply go back to them. It has to show the regulator that it made no surplus in the two years before, or that it paid the surplus back to its users. Local operators file by 31 October each year. Regional ones file by 30 September.
Two further prices are worth knowing at heads of terms. The connection charge into such a network is a pass-through with a set structure: the operator’s own costs, plus the charge behind it in the regional network, plus any induced transmission cost. And where a site takes a second supply line for resilience, access through that line is priced at 15 per cent of the reserved capacity tariff agreed for it.
Quality standards and what they are worth
Reliability is set by decree, and the numbers differ on the two sides of the gate. Unplanned outage time per connection point is capped at 60 minutes a year for the largest regional networks. For a local one the cap is 80 minutes. The number of those outages is capped at 1.20 against 1.50. A tenant behind the fence is entitled to a third more dark minutes a year than one on the public grid.
The same decree pays money back when a standard is missed. Suppose distribution does not start on the date in the access contract, or within five working days of the supplier’s request. The payment is then EUR 260 for every started day above 1 kV, and EUR 35 below it. Other breaches carry EUR 14 a day above 1 kV and EUR 4 below. None of that exists where a landlord is only re-invoicing. That is the practical case for wanting a licensed operator.
Openness is thinner too. A distribution operator posts free capacity per station and refreshes it every quarter. A local operator posts the same figure once a year, on 1 January. It is also excused from the two-yearly network plan the Act requires of the rest. For an occupier weighing a second shift, a chiller or vehicle charging, that figure may be eleven months old.
How to check one before signing
Ask for three documents by number. The operator’s energy business licence. Its current price decision. And its operating code, which is either approved by the regulator or the model code taken over from it. All three exist, or the network is not what it is being called. The price decision is the useful one. It names the rate a tenant will be placed on, so the network charge can be checked before signing.
Then split the two halves in the lease. The regulated half is public and fixed for the year. The free half is where the money moves. Give the commodity a pricing formula, a reference index and an audit right, not a promise to be fair. Sub-metering sits under both. A meter settles how much. This instrument settles at what price and on whose licence. A lease that fixes one and not the other is half drafted.
Three questions settle most of it. Is there a licence, and whose name is on it? Is the network tariff adopted from the regional operator, or the park’s own? That answer decides whether the tenant buys a published number or somebody’s cost base. And what happens to the commodity price when the supply contract behind the estate meter runs out? A park that answers all three in writing runs a regulated business. A park that cannot runs an informal deal, and the informal deal is what ends up in the dispute.
Frequently Asked Questions
Is every industrial park in Slovakia one of these networks?
No. Many estates give each unit its own connection point on the regional network, and the landlord touches nothing. Others meter the whole estate once and recharge tenants at cost. That is allowed where the price passed on matches the invoice behind it exactly. The instrument arises only where the estate carries power onwards to other companies over its own cable.
Can a tenant in a park choose its own electricity supplier?
In principle yes. The right to switch supplier follows the customer, not the network. In practice it turns on whether the connection point is registered properly, and whether the operating code and the metering support a third-party contract. Ask before the lease is signed, not after a supplier has been approached.
Does the landlord need a licence to resell electricity?
Yes, once the estate network qualifies. The let-off that allows resale at cost without a licence does not cover supply to end customers connected to such a network. Where the estate is not one, resale at cost with no margin and a matching unit price stays outside the licensing regime.
Is the price inside a park regulated?
Half of it. Access and distribution are regulated and set out in a decision anyone can read. The commodity sold to a business customer is not. That is why the lease has to carry the pricing formula.
Is a sub-meter the same thing?
No. A sub-meter measures use behind one billing point and lets a landlord split a cost. The network is a licensed activity, with a tariff, an operating code and quality standards attached. An estate can have sub-meters and no licence. It can also hold a licence and meter badly.
Not sure which of the two you are dealing with, or what the energy schedule in your draft lease commits you to? Send us the lease and the last invoice and we will tell you which regime applies and where the negotiable money sits.