Electricity consumers who prefer a fixed price over a market-based package now face limited options: they can choose a plan with an early termination fee or a plan that allows cancellation at any time. However, the latter option has become increasingly scarce, as it is no longer possible to fix the price for more than six months without incurring penalties.

This situation stems from a policy change introduced by the state in March 2022, allowing electricity providers to offer household consumers contracts with termination fees.

Providers such as Alexela and Enefit began implementing termination fees as early as spring 2022, discontinuing penalty-free packages. Eesti Gaas followed suit, leaving Elektrum as the last provider offering penalty-free fixed-price contracts for up to three years. As recently as this fall, Elektrum customers could secure such contracts without incurring costs for early termination.

However, Elektrum has now also abandoned this option, meaning that fixing prices for more than six months is only possible with a contract that includes termination fees.

Agnes Makk, CEO of Elektrum, told ERR that the company initially delayed introducing contracts with termination fees because the universal service, a state-supported measure primarily aimed at households, launched in October 2022. Since then, market conditions have shifted significantly, making future price predictions more challenging.

"It has become clear that when a customer can leave a fixed-price contract at any time without penalties, it is difficult for us to maintain a reasonable business balance, especially in light of price fluctuations and the potential turbulence linked to the upcoming disconnection from the Russian and Belarusian grids," Makk explained.

As a result, Elektrum decided to align with other market participants by applying termination fees to contracts lasting one year or longer. According to Makk, fixed-price contracts over longer periods are meant for those who want to avoid monitoring electricity prices constantly.

Makk added that consumers seeking to save money amid fluctuating electricity prices could opt for shorter-term plans. If a decision is well-considered, the termination fee should not be an issue, as the need to switch packages prematurely is less likely.

Estonia's electricity system is set to disconnect from the Russian grid in early February, a move expected to impact electricity prices. However, the extent of this impact remains difficult to predict due to the numerous factors influencing price fluctuations.

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