“Russia’s war in Ukraine is largely behind the enormous rise in energy prices,” remarked Prime Minister Kaja Kallas. “Before the next heating period starts we want to reassure the people of Estonia that they don’t need to worry about unpredictable increases in their electricity bills. With the reforms to the electricity market we, as a government, want to make it possible for household consumers and apartment associations to purchase electricity at a controlled price from 1 October this year through to the end of April 2026.”
Minister of Entrepreneurship and Information Technology Kristjan Järvan says the unprecedented rise in energy costs has affected many families’ ability to cope and that the state must therefore intervene. “Exchange prices and fixed electricity packages have become more and more expensive and some consumers didn’t manage to fix their price when it was more favourable to do so, which is why we’re now offering a universal service to help them out and give them the chance to keep their electricity bills under control,” he explained. “Looking ahead, winter is likely to be hard, but we’re not going to leave anyone to fend for themselves – we’ll be helping them not just with a more affordable electricity package, but also with energy support payments.”
The reforms to the electricity market will oblige the state-run Eesti Energia to sell electricity to Estonian household consumers and to all resellers as a universal service from this October. The basis for the establishment of the service will be set out in accordance with the draft version of the Act Amending the Electricity Market Act and the Competition Act. Other electricity sellers may also offer the universal service to their clients and will have the right to buy the electricity they need for this from the national producer.
In essence, the universal service is an electricity package to which all private consumers and apartment associations can voluntarily subscribe. The draft act states that electricity sellers may not impose a contractual penalty on consumers who switch from their existing package to the universal service. According to the proposal, the service will be valid for four years, but consumers may withdraw from it at an earlier point should they wish to do so.
The draft act does not regulate the price of the service, which will able to be approved by the Competition Authority once the act enters force and Eesti Energia subsidiary Enefit Power has submitted its application regarding the price in question. The final price offered to consumers will cover production costs, reasonable profit for the producer and the sales costs of the seller. The price should become clear by the end of September at the latest.
