President hits out at clumsiness of government's energy bill support scheme

President Alar Karis.
President Alar Karis. Source: Kairit Leibold/ERR

President Alar Karis has criticized the government over its energy bills compensation system, aimed at mitigating the worst of the soaring electricity and natural gas prices seen since the autumn, principally over what he calls its extensive administrative burden, inflexibility and failure to fully utilize Estonia's e-state in implementing the support.

The president said: "In the 20 years that the Estonian ID card and digital signature have been in use, the state has reached the point where it should be able to decide flexibly, on the basis of comprehensive databases, when to offer support to people in need without them having to submit an application – the latter creating an unnecessary administrative burden."

The head of state, whose role is principally symbolic and ceremonial, was visiting the Information System Authority (RIA) when he made his remarks on Thursday, reported in the media Friday.

The simplest possible solution ought to be sought in distributing support to those in need, Karis added.

The finance ministry announced Friday that the nationwide preparations were in place to part-reimburse electricity, natural gas and district heating bills, retroactively back to October, and which is to be handled by local government and requires those eligible for the support to apply for the aid.

Local governments have had to hire additional staff to process applications, ERR reports.

The application process can be submitted electronically, via mail or in person, and the support is open to those whose household income is below €1,126 per month for a single adult-earner household, or below €2,365 for a household with two children.

The threshold on electricity prices above which aid is paid is €0.12 per Kwh, with the threshold for natural gas being set at €49 per Mwh and for district heating €78 per Mwh.

Prime minister Kaja Kallas (Reform) says the support measure, which came rather more from the Center Party component of the coalition, is double that of similar measures put in place in Norway, when compared with the GDP of the two countries.

The soaring energy prices from last fall, where records were set in all three categories – for electricity the figure so far has been €469 per Mwh as an average of the whole day's prices, almost exactly a month ago – have also been tackled via a separate measure which reimburses 50 percent of the network connection fee for electricity; 100 percent for natural gas. A Reform Party measure, this is more likely to benefit business and larger consumers.

A proposal to slash VAT from the current 20 percent to 8 percent, on all energy bills, has met with opposition from Reform, while its coalition partner, Center, has softened its earlier stance on supporting the policy (introduced by Isamaa in a bill to be processed after the Riikogu returns to work next week and, in an unusual show of unity, supported by the official stances of opposition SDE and EKRE MPs).

The issue is one of the first times the head of state has commented on domestic politics; Karis' forerunner, Kersti Kaljulaid, did so numerous times, particularly when the Center/EKRE/Isamaa coalition was in office.

The finance ministry has more information on eligibility for energy bill support on its website, not available in English, here.


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Editor: Andrew Whyte

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