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Database of national-level policy measures

Eurofound's EU PolicyWatch collates information on the responses of government and social partners to the COVID-19 crisis, the war in Ukraine, rising inflation, as well as gathering examples of company practices aimed at mitigating the social and economic impacts.

Factsheet for measure EE-2022-40/2905 – measures in Estonia

Universal electricity service: Price caps on electricity for households

Elektri universaalteenus

Country Estonia , applies nationwide
Time period Temporary, 01 October 2022 – 30 April 2026
Context War in Ukraine
Type Legislations or other statutory regulations
Category Responses to inflation
– Support for energy bills
Author Ingel Kadarik (Praxis Center for Policy Studies) and Eurofound
Measure added 15 September 2022 (updated 21 September 2022)

Background information

Due to the significant increase in energy prices and mitigate the effect on private consumers, the Government proposed a change in the laws to allow private households to buy electricity with a price not tied to the electricity market. The Parliament approved changes to the Electricity Market Act and the Competition Act on 15 September 2022.

Content of measure

Currently, households can choose between market prices or fixed-term contracts with fixed prices determined by the electricity sellers when buying electricity. Fixed-term contracts include an early cancellation fee. The amendment to the law obligates the state energy provider to sell electricity to households and electricity distributors as a universal service at the price determined by the Competition Authority taking into account production costs and a reasonable profit, thus independent of the market price.

Other electricity sellers can also offer a universal service to their customers, and they get the right to buy the electricity they need for this from the state's electricity producer.

The price of the service will be determined by the end of September 2022.

Choosing universal service over their current contracts is voluntary for the consumers. Until 30 September 2023, consumers who currently have a fixed-term contract, can cancel their contract in order to switch to a universal service contract without being charged an early termination fee or for damages by their previous provider.

Use of measure

No information available.

Target groups

Workers Businesses Citizens
Does not apply to workers Does not apply to businesses Applies to all citizens

Actors and funding

Actors Funding
National government
No special funding required

Social partners

Social partners' role in designing the measure and form of involvement:

Trade unions Employers' organisations
Role Unknown Unknown
Form Not applicable Not applicable

Social partners' role in the implementation, monitoring and assessment phase:

  • Unknown
  • Main level of involvement: N/A

Involvement

No information.

Views and reactions

Business associations (e.g. Estonian Association of SME'S; acgricultural producers) have expressed their dissatisfaction with the fact that universal service is only available for households and not for companies.

The government stated that the discussions over the support measures for companies will take place in September after receiving the European Commission's views on subsidies for the European Union's economy.

Sources

  • 01 September 2022: Universaalteenus (Universal service) (mkm.ee)
  • 07 September 2022: Põllumajandustootjad soovivad elektri universaalteenusest osa saada (Farmers want to benefit from universal electricity service) (majandus.postimees.ee)
  • 12 September 2022: EVEA seisukohad energeetika dialoogis (EVEA's views on the energy dialogue) (evea.ee)
  • 12 September 2022: Koalitsioon arutab ettevõtete energiahüvitisi neljapäeval (Coalition to discuss corporate energy benefits on Thursday) (www.err.ee)

Citation

Eurofound (2022), Universal electricity service: Price caps on electricity for households, measure EE-2022-40/2905 (measures in Estonia), EU PolicyWatch, Dublin, https://static.eurofound.europa.eu/covid19db/cases/EE-2022-40_2905.html

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