Minister: Those switching to universal electricity don't have to pay fine

Minister of Entrepreneurship and IT Kristjan Järvan (Isamaa).
Minister of Entrepreneurship and IT Kristjan Järvan (Isamaa). Source: Priit Mürk/ERR

Under the new bill, households that want to switch to Estonia's new universal electricity service will not have to pay a contractual penalty to their current electricity provider, Minister of Entrepreneurship and IT Kristjan Järvan (Isamaa) said Tuesday. The service is aimed only at household consumers, however.

According to the bill of amendments to the Electricity Market Act and the Competition Act, household consumers will be given the opportunity to buy electricity as a universal service, and the basis for determining the price thereof will be established as well.

The bill, which is currently in its final stages, concerns household consumers, including apartment associations, but under EU state aid rules, this measure cannot be used to help businesses, Järvan said in an appearance on Vikerraadio's "Uudis+" on Tuesday.

He did add, however, that households do not have to be clients of the Estonian state-owned energy group Eesti Energia in order to subscribe to the universal service.

"With this bill, we will be obliging Eesti Energia as an electricity producer to offer a universal service, but several market participants are sellers, and they, too, can offer their consumers a universal service," he explained. "They buy production from Eesti Energia and resell it to household consumers. This service can be obtained via one's existing electricity seller as well."

According to the minister, electricity sellers can request their margin as well, and won't end up going without a profit, but the market is working, and electricity providers will likely start trying to outdo one another.

The bill will allow consumers with existing long-term contracts to switch over to the universal service as well, stipulating that once the universal service is discontinued, the contract will continue to remain in force.

Should an electricity seller not want to offer the universal service and a client is forced to cancel their contract, Järvan said that the company cannot impose a contractual penalty on them.

"We have provided in the bill that contractual penalties cannot be imposed if someone switches [to the universal service]," he explained. "We have included a reasonable deadline, that if the universal service has applied for several months and a contract including contractual penalties is then signed in that type of situation, then that justification is gone. In the current situation, the bill provides that contractual penalties cannot be levied on household consumers that switch over to the universal service."

According to the minister, the price of the universal service won't start jumping every which way based on the latest production price, meaning that customers wouldn't be issued a new price if Auvere Power Plant, for example, were to break down or its production capacity proved insufficient.

"The bill will provide Eesti Energia with as much discretion as possible regarding how exactly to provide a universal service," he said. "Their being able to consistently provide this production capacity is also part of energy security."

Järvan declined to reveal a price estimate for the new service so as not to exert political pressure on the Competition Authority, which is to set the price based on objective facts.

The new law is planned to enter into effect on October 1. According to the minister, the Reform-Isamaa-SDE coalition is united on this issue, and he is confident the Riigikogu will be cooperative as well, which is why he is hopeful everything will be ready by that deadline.

The Estonian government is expected to discuss the bill on August 18.


Follow ERR News on Facebook and Twitter and never miss an update!

Editor: Aili Vahtla

Hea lugeja, näeme et kasutate vanemat brauseri versiooni või vähelevinud brauserit.

Parema ja terviklikuma kasutajakogemuse tagamiseks soovitame alla laadida uusim versioon mõnest meie toetatud brauserist: