Subscriber that contested Elering deposit payment wins preliminary relief

Wind farm in Paldiski. Photo is illustrative.
Wind farm in Paldiski. Photo is illustrative. Source: Enefit Green

Recent amendments to the Estonian Electricity Market Act introduced the obligation for grid subscribers to pay a deposit. However, renewable energy producer Evecon challenged this at Tallinn Administrative Court, which granted the company preliminary relief. According to the ruling, Elering cannot refuse to offer a connection contract for the non-payment of the deposit.

According to amendments made to the Electricity Market Act adopted in February this year, grid distributor Elering was required to ask subscribers to pay a deposit. As a result, Elering wrote to grid subscribers in March, to inform them of their obligation to pay a deposit of €38,000 per megawatt-ampere of electricity generated.

At the end of April, however, Elering sent a new message to producers, informing them that instead of a deposit they could opt to pay 70 percent of the expected connection fee. The reason for Elering's change of tack is an ongoing legal dispute centering on the interpretation of a part of the amendment, which allows those who signed a connection contract before it entered into force, to be charged retroactively.

Renewable energy producer Evecon OÜ and its subsidiaries, challenged this part of the Act at Tallinn Administrative Court, which has now decided to grant their application for preliminary relief.

According to the Electricity Market Act, from March 17, when the act came into force, the requirement to provide a deposit applies to all, who have submitted a request for connection to the grid, as well as those who have concluded or are in the process of fulfilling a generation connection contract by that date.

However, the Administrative Court found that this paragraph of the law was unconstitutional and therefore referred it to the Supreme Court for a constitutional review.

Thus, according to the court order, the letter Elering sent on March 24 concerning the obligation to pay the security deposit is not valid. Elering is also not entitled to refuse to issue an interconnection offer on the basis that a security deposit has not been paid. Neither the interconnection contract nor the interconnection procedure may be terminated for that reason.

The provisional legal protection is valid until December 17, meaning Elering cannot require Evecon to pay the security deposit during this period.

The obligation to pay the deposit was imposed on subscribers in the recently enacted law as a means of identifying those, who genuinely have the capacity to connect to the grid. However, the second measure, the under-utilization fee, which was included in the law as a measure against so-called so-called "phantom" customers, who reserve capacity on the grid, but do not actually provide electricity, remains in force.


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Editor: Michael Cole

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