Minister of Economic Affairs Juhan Parts has called for examining whether the regulatory framework of Nord Pool Spot, the regional electricity exchange, ensures trustworthy market activity.
"It would be wrong to say that such fluctuation represents a well-functioning market," Parts told Eesti Päevaleht, referring to a dramatic spike in electricity prices on Tuesday.
"We need to give some time to evaluate whether some kind of legal tinkering is required," Parts said, adding that the ministry has requested an explanation from Nord Pool Spot as to whether Tuesday's hike was an anomaly or a systemic problem.
On Tuesday, the price of electricity in the Baltic trading area jumped to 103 euros per megawatt hour, much higher than in the neighboring Nordic countries. The rate eased to 64.62 euros on Wednesday and inched up to 70.92 euros today.
Fingers have mostly been pointed at Latvian and Lithuanian producers, which have a lower summertime power output, thus increasing demand. But Latvia's operator, Latvenergo, denied this, reasoning that the company is itself a purchaser and would therefore have no interest in triggering a price rise. The price of electricity in Estonia can only be determined by Estonian producers themselves, a representative claimed, although prices across the Baltics have been nearly the same.
Taavi Veskimägi, the CEO of Estonia's power network operator, Elering, said in a blog post that the spike did not mean that the market is not functioning well.
"The market has both high and low prices. Of course no one talks about the latter. 'Price records' are written about, although Estonia's hour-based price record was set long ago," Veskimägi said, explaining that during a five-hour period in August 2010 prices reached 2,000 euros.