Network fee hike to fall disproportionately on those who consume less electricity
State owned electricity grid distributor company Elektrilevi's decision to raise network fees starting in October will hit customers with very low electricity consumption the hardest.
The company's rationale is that up to now, the network fees for this particular consumer demographic have not covered the costs of providing the service to them.
As of October 1, Elektrilevi is to increase network fees by an average of 7.1 percent.
The average tariff, previously 4.11 cents per KWh, will now be 4.40 cents per KWh.
Additionally, the company will introduce a monthly fee for all packages.
Kristi Reiland, Elektrilevi's head of communications and marketing, told ERR: "For a customer living in an apartment with average consumption and who uses the most suitable package, the monthly network bill will increase by about a euro. For a homeowner, the monthly bill will increase by €2-€4."
Not all consumers will experience the price increase equally. According to Reiland, the price change will vary across different customer groups, moving toward more cost-based pricing.
"Customers who have a very low consumption may see a larger rise since, up to now, the network fees for this group have not been covering the costs of providing the service," she explained.
In addition, a monthly network service fee will be added to all packages that previously did not have one. Reiland stated that this fee will cover the costs required to maintain and upgrade the electricity network.
Elektrilevi manages and maintains 61,000 kilometers of power lines and over 24,000 substations across Estonia.
The company has justified its price hike on the grounds that the electricity grid requires significantly larger investments and maintenance than the current network fees have allowed, in order to ensure stable connections, security of supply, and faster resolution of outages.
Elektrilevi also said that inflation in the sector over the past three years has been at nearly 37 percent, which has increased most of the costs related to providing network services, all while the network fee had remained unchanged.
Elektrilevi has coordinated the new price list with the Competition Authority (Konkurentsiamet).
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Editor: Karin Koppel, Andrew Whyte
