Over 4,500 customers ditch universal electricity service in two weeks
Over 4,500 customers have dropped their universal electricity service contacts in recent weeks due to falling utility prices, a trend forecast to last until autumn. Consumers have the option to switch back and forth until 2026.
Eesti Energia (EE) currently has 22,000 customers using the universal service, Armen Kasparov the company's head of energy products said on Monday. Many of their contracts automatically switched to the service on January 1.
"According to the Electricity Market Act, electricity suppliers are obligated to offer customers the most cheapest package possible. And in December, this was the universal service," he said.
EE's customers pay 19.2 cents per kilowatt-hour with the universal service. In December the average price for electricity on the Nord Pool stock exchange was 26 cents but this fell to 9.9 cents in January.
"Current futures, or future trades on the Nasdaq market, show that between March and the end of August the universal service will definitely be more expensive than the exchange price," Kasparov said.
If the temperature were to drip in March the price could rise again, but this is not forecast at the moment.
"Additionally, the maintenance of [power] plants, the level of hydro [energy] in Scandinavia and, of course, solar production in our region will play a role," said Kasparov.
"It can also be the case that during the day the prices are very favorable and in the evenings they are quite expensive when the production plants have to be brought online to cover the evening peak hours."
Another important factor is gas prices, which have fallen to around €50.
"Of course, if gas were to go back up to €150-200 in two to three weeks or two to three months, producers would not be able to offer prices like that for long," said Kasparov.
Customers can come and go
In the last two weeks, approximately 4,600 customers have opted out of the universal electricity service.
"We ourselves reckon that approximately the same number are planning to leave within a fortnight," said Kasparov.
"Today our advice center is seeing quite a lot of inquiries on this issue and clients are opting for fixed contracts and stock exchange contracts, which are cheaper than universal service today."
Customers switching their contracts do not face any big risks as they can flit back and forth until 2026.
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Editor: Marko Tooming, Helen Wright