Universal electricity service bill to be amended quickly

MP Kristen Michal (Reform) at an extraordinary sitting of the Riigikogu. August 31, 2022.
MP Kristen Michal (Reform) at an extraordinary sitting of the Riigikogu. August 31, 2022. Source: Ken Mürk/ERR

Following revisions in the Economic Affairs Committee, the universal electricity service bill is expected to be passed in the Riigikogu next week. To date, how to properly word the automation of the transition to the service in the bill has yet to be resolved, among other needed solutions.

The Economic Affairs Committee on Wednesday discussed proposals received following the first reading of the bill at an extraordinary sitting held on August 31, some of which were left to continue discussing this upcoming Monday, committee chair Kristen Michal (Reform) told ERR.

The second reading of the bill is scheduled for next Wednesday, and the third reading for Thursday.

"This is indeed an unusually and somewhat borderline fast pace, but perhaps also understandable, considering the situation," he said.

According to Michal, the committee's goal is to make the bill clearer, because not all the details and nuances of the bill had time to be fixed in the Economic Affairs and Communications as it was quickly drawn up.

"For example, how exactly the transition to the universal service will work — so that it's as clear as possible for consumers, and so that all kinds of target groups are included," he said.

A total of 15 proposed modifications were received by the committee, most of which were supported by it. Among these was a proposal by the opposition Center Party that the price of the universal service be displayed on the power company's homepage and conveniently accessible for consumers.

The same was also included among modifications proposed by Minister of Entrepreneurship and IT Kristjan Järvan (Isamaa), who noted in a letter sent to the committee that the speed at which the bill is being process has not left the Ministry of Economic Affairs and Communications with enough time to thoroughly analyze any changes.

According to Järvan, they still have to review the contractual regulation of the transition to the universal service as well as the deadlines for the implementation of the bill.

He noted that market participants, i.e. electricity sellers, have proposed modifying the bill to reduce the administrative burden on sellers connected with the transition to the universal service. According to the proposed modification, sellers could automatically offer their consumers a transition to the universal service.

"The consumer has the right to refuse it," the minister explained. "Within this framework, consumers wouldn't have to sign a separate contract with the seller, which would save a significant amount of time for the seller as well as the consumer, and would make the transition more efficient. No obligation would arise for the consumer to consume electricity within the framework of the universal service; they can refuse it at any time. Also to be preserved is the option cited in the original version of the bill according to which a seller can sign a contract with a consumer for the provision of the universal service."

Regarding the automation of the transition, Michal said that the proposed modifications submitted by the Ministry of Economic Affairs regarding the matter will be discussed by the Riigikogu committee on Monday.

"The wording raised questions among members of the committee," he explained. "For example, what will happen when the great transition to the universal service begins, how to automate it, how to make this process more convenient for the people of Estonia. The Ministry of Economic Affairs was tasked with taking half a week to figure out the wording together with the Competition Authority and officials from the Economic Affairs Committee. The goal is that perhaps we can manage to find the most automatic options possible for the transition, so as to reduce the burden of everyone having to start calling and writing."

The Ministry of Economic Affairs also wants to specify the date of the law's entry into force in the bill as well. To date, the bill notes that the law should enter into force on September 23.

Järvan said that should the handling of the bill in the Riigikogu or the promulgation of the law by the president should drag, it could happen that the law ends up being published in the State Gazette (Riigi Teataja) after September 23.

To ensure that the entry of the bill into force doesn't end up being unconstitutional, he proposed that the law enter into force the day after it is published in the State Gazette. The establishment of the universal service being made mandatory would likewise be tied to the law's entry into force — within five days thereof.

Proposals to expand universal service rejected

In accordance with one of the Ministry of Economic Affairs' proposed changes to the bill, until September 30, 2023, consumers can cancel their fixed-term contract in order to switch to a universal service contract without being charged an early termination fee or for damages by their previous provider. The key is that the previous fixed-term contract cannot be concluded after the universal service law enters into force.

According to Michal, the proposed modifications rejected by the committee mostly involved expanding the universal service to businesses as well.

"First and foremost those proposals which seek, in breach of EU rules, to compensate environmental charges to businesses or energy producers, which this bill does not allow," he explained. "There are other opportunities for that. There were also proposals to include the listed company Enefit Green in this universal service, but that is not compatible with the architecture of the creation of the universal service, and that isn't possible either."

As far as the business side is concerned, the Riigikogu committee chair continued, the ruling Reform-Isamaa-SDE coalition has agreed that they will work on a separate package for businesses.

"High-level meetings are taking place in the EU in the latter half of the week where the same possibility will be discussed, as well as what will become of the energy market more generally," Michal said. "And that will be followed by a proposal from the [Estonian] government regarding what we can do for businesses."


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Editor: Aili Vahtla

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