Climate minister puts forward draft bill to change universal service

Charger and extension cord plugged into outlets.
Charger and extension cord plugged into outlets. Source: Aili Vahtla/ERR

Estonian Minister of Climate Kristen Michal (Reform) has sent a draft bill for approval, which would make the universal service more flexible for electricity consumers and also connect it to the exchange price. The bill additionally aims to clarify aspects of the Natural Gas Act related to the gas reserve tax.

"We want to change the universal service, so that if the exchange price stays more favorable, then the universal service contract will be closed. The change will reduce the cost of electricity for consumers," Michal said.

Under the draft, electricity providers will be required to automatically conclude universal service contracts with their customers, if the average cost of electricity over the previous three months has been higher than the exchange price.

Electricity providers will have to give customers at least one week's notice, after which they will be able to choose between signing a new contract for a more suitable electricity package, or remaining on the universal service.

The bill would also bring an end to the system of pricing of the universal electricity service on the basis of the production price, linking it instead to the exchange price.

The change would affect around 120,000 universal service users, including both domestic and business customers as well as local authorities. It would also have an impact on universal service users, of whom there are approximately 96,000.

In addition to the changes to the universal and generic service, the draft's entry into law would also clarify elements of the gas reserve tax in the Natural Gas Act.

According to the draft, from 2024, costs related to the management of the state-owned LNG terminal will be covered by the gas reserve tax. The rate of the reserve charge would be around one percent of the final gas price.

This is considered necessary in order to ensure security of gas supplies in the event of a crisis.


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Editor: Michael Cole

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