Competition Authority: Price of General Service Too High

Photo: Postimees/Scanpix
7/17/2013 10:11 AM
Category: Economy

The Competition Authority has criticized Eesti Energia for what it says is too high a price charged for the universal electricity service.

The regulator's director general, Märt Ots, told uudised.err.ee that the state power company charges contractual customers a margin that is only half of what it reaps from the default customers who have not opted for a service plan.

"I'm not satisfied with this," Ots said.

He said the difference should not be that great. "The law states very precisely that universal service consumers must be treated equally to all other consumers."

Customers who do not sign up for some service plan and decide to brave the vagaries of the sometimes volatile power market are assigned a power seller by the network operator, in most cases the Eesti Energia subsidiary Elektrilevi. 

There are a few other general service providers, but Eesti Energia is dominant. "All of the other electricity sellers in Estonia fall into line behind Eesti Energia. And it is naturally problematic when the upper limit is so high," Ots said.

The official's comments pertain to a preliminary opinion from the regulator. A final decision will be issued after Eesti Energia has responded - they have until mid-August to do so.

Eesti Energia management member Margus Rink said that the "lengthy" report from the Competition Authority was still being reviewed.

"At first glance it seems that the authority has used Eesti Energia's power sales expenses from 2010 on the closed market as the comparison base," Rink said.

"But we feel that the expenses on the closed market where there was only one power seller and service plan, and one price, cannot be compared with the situation on the open market with competition, different products and prices that change every hour."

Rink noted as an example that the data volumes have grown 700-fold.

"The role of IT in the business has grown many times over and so, too, expenses on IT," he said.


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