Public Sector Learning From Electricity Tender Mistakes ({{commentsTotal}})

Source: Photo: Postimees/Scanpix

Dozens of state institutions and municipalities have begun preparing new electricity procurements, having learned from mistakes they made when the market was deregulated six months ago.

The State Real Estate company is drawing up an electricity purchasing tender with a clause allowing it to cross over to other suppliers on a quarterly basis, ERR radio reported today.

"We would buy certain volumes of electricity for a fixed price every quarter, as different electricity sellers have different production facilities, which causes suppliers to offer different prices for each quarter. That is where we are able to win," said Alex Roost, who heads State Real Estate's energy purchasing department.

Tartu city, which is currently paying one of the highest prices for electricity of all local governments, said they will look to sign a contract based on floating prices.

Tartu's previous tender asked for a fixed price that would be on offer for a lengthier period, allowing the city's council to debate it. That requirement, which will not be in the next tender, set for next year, was the root of the high prices.

The Estonian electricity market opened on January 1, with many state institutions and local governments rushing to push through electricity tenders in order to avoid paying more with an automatic general contract.