Center proposes electricity compensation measure for all private consumers

Minister of Economic Affairs and Communications Taavi Aas (Center).
Minister of Economic Affairs and Communications Taavi Aas (Center). Source: Stenbock House

In addition to compensating all household consumers for their electricity bills, the Center Party has proposed the state cover 50 percent of all gas bills for consumers and to compensate legal entities for the electricity network fee in full.

Center's management and Riigikogu group met on Tuesday evening to discuss a new support measure package to compensate for the soaring energy prices for both household consumers and legal entities.

As a short-term measure, the junior coalition partner would compensate all household consumers for 50 percent of their gas and electricity consumption and legal entities for the electricity network fee in full. Center's proposal would be in effect from January to March and would cost the state an estimated €170 million, the party announced.

Additionally, as a long-term measure, the party would compensate household consumers 20 percent of their solar panel installation fees and increase the tempo of wind farm developments.

"Electricity consumption has already begun to affect grocery prices and will soon reflect from the price tags of consumption goods and services. The state has options to lend a helping hand to its residents, both with short-term measures and long-term solutions. Electricity cannot be a luxury resource. It is irresponsible to stand and look at how many people need to choose between their utilities and their daily shopping basket," Center Party Riigikogu group chair Jaanus Karilaid said.

The proposals would supplement the already existing energy support measures.

Economic affairs minister: Practically everyone needs help

Although there might be questions about compensation for people that do not really need it, there are so many people in need of help today that a universal approach is reasonable, Minister of Economic Affairs and Communications Taavi Aas (Center) told ETV's daily affairs show "Aktuaalne kaamera".

"We are in a situation today, where the number of people who need compensation increases each day, because we know fixed-term contracts are also being changed. Providers are currently reviewing their packages. They are offering completely changed prices for people whose contracts are running out. /.../ In today's situation, practically everyone needs help," Aas said.

The minister said the new support measure would be covered by very good VAT collection recently and added that a universal support scheme would also be technically easier.

What Center's coalition partner Reform thinks of the proposal will become clear in the coming days. Aas was optimistic about the proposal's being approved. "I think it is relatively likely that everything will be discussed and I hope it will also be approved," he said.

The government partners are set to discuss the proposal on Thursday.

Reform deputy chair: It is a dumb proposal

Reform Party deputy chair Jürgen Ligi said on ETV's interview show "Esimene stuudio" on Tuesday that he does not consider Center's proposals reasonable.

"I almost had a heart attack at how dumb the proposal is, including the economic affairs minister's justifications. You start thinking about how this is the potential in charge of the country. /.../ Lowering network fees is already universal, for those that do not need it and those that consumer more, get more. Now they decided that those with €10,000 bills will receive €5,000 in support and those with €40 bills, which are the most common, will receive €20. Genius," Ligi said.

Responding to a question from show host Andres Kuusk about if Reform's response to the proposal will be negative, Ligi said: "Yes, no need to play dumb about it."

The veteran politician noted that the current support measures are too universal and the state is paying for people being able to consume at regular volumes and is not helping those that truly need support.

"I am sorry, but the circle of people receiving support on the basis of one price (electricity - ed) cannot be 800,000 people. Private consumption bills are picked up by the state, it will get more expensive. /.../ Currently, compensation is given to everyone so they would consume more. We can provide support to maintain the middle class and to help poorer people manage. The problem does not include everyone, the middle class will not go poor based on this one bill," Ligi said.

He pointed to a lack of investments because of stable prices in previous periods as the actual root cause of the energy inflation crisis.

Sitting across Ligi on "Esimene stuudio" was Isamaa chairman Helir-Valdor Seeder, who noted that the government has made some odd choices, such as partially compensating consumption through local municipality governments, which he claimed to be the most bureaucratic and inefficient way. Seeder pointed to Isamaa's electricity market reform plan, which would allow people the "freedom to buy electricity over-the-counter and the state will compensate the producer for the CO2 quota price".

"In a situation, where we do not have a free market, a regulated price is completely normal. If more than half of the Estonian population ends up qualifying for support and will take their applications to the local municipality government, the bureaucratic mechanism is no solution now or in the long-term," Seeder said.

Ligi noted that Isamaa's proposal is also not a good option. "That hides the problem and amplifies it. The problem is a lack of investments and capacities. Helir here is claiming as if we were able to cover Estonia's consumption with our own production - old oil shale plants are depreciated and a portion of them will fall from operation within the decade. Secondly, it is a counter-action to sustainable production, if we were to stray from the exchange prices and would being to produce from oil shale. The exchange is our way of getting electricity, no matter how angry we are at it," the Reform deputy chair said.

Seeder noted that leaving the exchange is not the main goal, but rather providing household and small consumers another option. "It would also not affect the exchange, because Estonia's consumption is marginal," the Isamaa chair noted.

Ligi said one of the solutions is focusing on the green transition and creating new production capacities. The current record price period should not cause the state to rush any decisions, because paying everyone's bills is not sustainable, he noted.

Tuesday's "Esimene stuudio" (from left): Jürgen Ligi, show host Andres Kuusk, Helir-Valdor Seeder. Source: ERR


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Editor: Kristjan Kallaste

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