Minister of Economic Affairs and Communications Riina Sikkut (SDE) has signed the regulation enacting energy support to consumers, ahead of the start of heating season.
Support applies to domestic customers only and runs during the heating season, from the start of October to the end of March next year.
Customers will mostly have to do nothing to receive the support, which will be automatically applied to and deducted from bills.
Some exceptions to that exist, Sikkut said: "Such as gardening cooperatives or terraced houses linked to a common metering point, where you would still have to submit an application to the Center for Environmental Investments (KIK) yourself."
Non-profits are another type of consumer who would have to apply for the support, ERR reports, while smaller, co-owned apartment buildings who funnel their energy bills via one owner rather than via an apartment association.
The government says the subsidies will cut the bills issued to consumers of natural gas will be cut by around half compared with current prices, while electricity bills should cost around 21 percent less.
In the case of district heating, a type of centrally controlled system where hot water is piped into apartment blocks, for heating purposes, the fall will vary more depending on the area, but in the case of the largest provider in Tallinn, bills will be 14 percent cheaper, the government says.
The details of the support are as follows:
Support is applied on amounts above €80 per MWh in monthly bills, up to a total of €50. In other words, if electricity cost €150 per MWh, the customer would pay €100 (€80+€70-€50); if it cost €200 per MWh the customer would pay €150 etc.
Similarly, natural gas is compensated on bills exceeding €80 per MWh, with the difference being that this compensation is only 80 percent of the excess, and consumption is capped at 2.6 MWh per household (251.7 cu m), which is set as the average consumption for a private household.
Thus, a bill costing €150 per MWh for the month would see the consumer pay €94 (€80 + €70 - (€70*8)).
Consumers can still go over the 2.6MWh cap, but would need to pay the full amount on that consumption.
In the case of apartment cooperatives, common in large apartment blocks, no consumption cap is applied.
The support principle applied to district heating is identical to that of natural gas, with no consumption cap.
Please note all figures are exclusive of VAT, as is the price of electricity quoted on the Nord Pool exchange at any time.
The regulation is separate from a piece of legislation currently at the Riigikogu which would provide electricity as a universal basic service to households. Discussions are ongoing about any potential energy bill payment support to business.
Editor: Andrew Whyte