Eesti Energia to switch all variable price packages to hourly pricing

TALLINN – By September, Estonia's state-owned energy group Eesti Energia will make all customers of the so-called old variable price package, who are billed according to the average night and day tariff on the power exchange, subject to hourly pricing. 

Eesti Energia said in a press release on Tuesday that when the electricity market opened in 2013, Estonia was not yet covered by remote read power meters and variable price agreements could only be based on the average day and night exchange tariff. The remote read power meter project was concluded in 2017. Since then, it has not been possible to choose the older variable price package, but such pricing package remained valid for a large number of clients 

"We have informed clients about the possibility to update their agreement, but we see that people rather have not been keen to make the change. We are glad that we can now make the change automatically and earlier than expected, based on customer feedback," Eesti Energia management board member Agnes Roos said in the press release.

"The new type of package with hourly pricing allows clients to save more money by monitoring their consumption and using electrical equipment or heating systems during hours when the price is cheaper," Roos said.

All customers whose agreement is subject to average exchange tariff pricing, of whom there are nearly 50,000 in total, will receive a personal notification and do not have to do anything themselves to change the agreement.

According to Eesti Energia, the trends in the electricity market show that no decrease in the exchange tariffs can be expected in the coming months. The high exchange tariff is caused by a shortage of favorably priced renewable energy, which is why demand must be met with electricity produced from more expensive sources.

"Considering what is happening on the electricity market, we also understand those customers who do not want to keep track of exchange tariffs and reschedule their consumption," Roos added. 

Eesti Energia's variable price packages made headlines in May this year, when it was revealed that a large number of customers with exchange tariff based pricing packages, who were controlling their electricity usage on an hourly basis, were instead being charged the average of the nightly and daily exchange tariffs.

At the end of May, the company offered its apologies, explaining that their efforts to inform about the different pricing patterns in variable price agreements had not been sufficient to ensure that customers were properly informed, and promised to move all customers of the older type of variable price agreement to hourly pricing by the end of the year at the latest.