Some electricity providers have begun canceling fixed price contracts

An electricity pylon.
An electricity pylon. Source: Siim Lõvi /ERR

Some electricity providers in Estonia have started canceling their contracts with business clients in light of the record-high prices. This may come as an unpleasant surprise to companies, because some clients may not even be aware that the provider can cancel a contract if it has been stated so in the document.

Last year, Pärnu Tervis SPA and the Tervise Paradiis spa-hotel signed a fixed price electricity contract until the end of next year, which turned out to be an excellent deal in the light of the soaring energy prices recently. Their provider now wants to cancel the contract.

"We received a proposal from our electricity provider last week about amending the contract in a way that would have brought a significant price increase. The contract states that you cannot just change the conditions and we hope the provider agrees with us," said Tervis SPA and Tervise Paradiis manager Jaan Ratnik.

Astri Grupp, which manages the Balti Jaam train station market in Tallinn, the Lõunakeskus mall in Tartu and the Astri center in Narva, has already had to drop their provider's fixed price contract. The contract was supposed to last until the end of the year, but was canceled by the provider in the summer.

"When the contract was signed, we did not turn much attention to the small note, which gave the other party this option. We will buy electricity at trading prices until the end of the year, but we would like to sign a fixed contract for the new year. The bill for September, which just came in, is 90 percent higher than last year," said Astri Kinnisvara board member Tarmo Kleimann.

Portal manager Urmas Voit said two electricity providers have expressed interest in canceling contracts so far. One of them is Russian company Intera.

"We have heard recently that Olerex, which operates in the large business client segment, has sent notices to their clients. We only deal with advising large clients, which are the 150 largest consumers in Estonia and we have met dozens of contracts there, which have gone to negotiations or have been canceled," Voit said.

In a written response to the editorial staff of ETV's daily affairs show "Aktuaalne kaamera", Olerex stated that "electricity providers both here and elsewhere have fallen under tremendous pressure and many of them are selling electricity below net cost. Today's crisis affects both consumers and providers and a solution to exit the crisis should be found together."

Eesti Energia and Alexela, major electricity providers in Estonia, did not wish to comment on the contracts. Eesti Energia responded via e-mail and said they would not amend any contracts.

Eesti Gaas said they will not go over fixed electricity price contracts. Eesti Gaas director Margus Kaasik added that fixed price contracts are not optimal for business and they are always a risk.

"Many clients have come to us with an issue of their current provider sweeping the rug from under them. The provider has likely gone astray with their risk assessment and have now stuck their hand in the client's pockets," Kaasik noted.


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Editor: Kristjan Kallaste

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