Third of private consumers switch to new universal electricity service

A house with lit windows.
A house with lit windows. Source: Priit Mürk/ERR

Approximately a third of private consumers have opted to join the new universal electricity package, preliminary data shows. Electricity providers believe this shows the price is too high.

There are 640,000 domestic electricity consumers in Estonia, the majority have contracts with Eesti Energia while Alexela and Elektrum have smaller market shares.

In total, 230,000 people received an offer to switch their contacts to the new universal service price, which can be canceled at any time.

Customers received an offer if their last bill was more expensive than the universal price.

Dajana Tiitsaar, head of the Estonian market of Eesti Energia, said approximately 15 percent of customers they made offers to rejected the switch, around 21,400 people.

Power lines. Source: Ken Mürk/ERR

Clients with both fixed and non-fixed rates opted out, either because the offered price was similar or because they want to try and manage their consumption this winter in other ways, she told "Aktuaalne kaamera" on Thursday.

Two-thirds of Eesti Energia's customers already have a fixed-price contract which is cheaper than the new universal service price of 19.24 s/kWh and did not receive an offer. 

Alexela offered to switch 80 percent of its customers and so far, less than 10 percent — 2,500 people — have opted out, board member Tarmo Kärsna said.

The majority have a non-fixed rate package and also believe they can manage their consumption this winter, he told AK.

Kärsna thinks the price is too high and believes consumption habits should be taken into account.

Kristjan Järvan. Source: ERR

"The price was still very close to the average price on the stock exchange, and I think that is also the reason why people did their own calculations, thinking that "if I just save a little more, my costs will be lower"," he said. "The current universal service does not encourage people to consume less."

Minister of Entrepreneurship and IT Kristjan Järvan (Isamaa), who drafted the legislation, does not think the price is too high.

"The first metric is how many [customers] switched over. That 90 percent speaks for itself. And the second metric to compare against is the stock market price. If we look at the price in September, which was €230, and now we look at the universal service price /-- / in fact the price difference is still very noticeable," he said.

"The aim in the first place was to offer stability and a better price compared to the stock exchange price. We certainly achieved that," Järvan said, adding the price is based on the cost of shale oil production.


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Editor: Barbara Oja, Helen Wright

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