Estonia: Tallinna Vesi given more time to explain components behind water price

TALLINN – The Estonian Competition Authority has granted a request of listed water services company AS Tallinna Vesi to extend the deadline by which the company must file its explanations concerning the price of water in Tallinn and Saue until Jan. 30, 2019.

Initially, the Competition Authority expected Tallinna Vesi to submit its explanations in the ongoing supervisory review procedure regarding the price components serving as basis of the prices of water services by Jan. 7, 2019. On Thursday it accepted the company's request to extend the deadline, Tallinna Vesi told the stock exchange.  

Tallinna Vesi asked the Competition Authority for a deadline extension in order to have sufficient time to thoroughly analyze the Competition Authority's arguments and form a substantiated position.

The supervisory review procedure is linked to the rejection of a tariff application by Tallinna Vesi for Tallinn and the town of Saue on Dec. 4, 2018. The Competition Authority finds the prices of water services provided by the company in Tallinn and Saue to be non-compliant with the requirements specified in the Public Water Supply and Sewerage Act.

Tallinna Vesi also informed that on Wednesday, it submitted an appeal against the judgment issued by the Tallinn Administrative Court on Nov. 19 by which the court dismissed the company’s complaints against the Competition Authority for the compensation for loss of tariff income and for challenging the refusal to review AS Tallinna Vesi's applications for the approval of water tariffs for 2013-2017.

The Competition Authority stated earlier this month that if Tallinna Vesi does not provide its further explanations regarding the facts indicated in their notification at the latest by Jan. 7, 2019, the Competition Authority will decide on their further action. This could include issuing an order to the company. If the issued order is not fulfilled, the authority has the right to establish a temporary price of water services, which is to remain in effect until prices compliant with the law have been agreed upon. 

The Competition Authority estimated the upper limit of the justified sales revenue to be 35 million euros. In its application for the endorsement of tariffs, Tallinna Vesi estimated the sales revenue to be generated with the price of water services to be 45 million euros. The actual sales revenue of Tallinna Vesi considering current prices, however, is even higher at 46 million euros. Thus the total cost of water and sewerage services for consumers should be 25 percent lower than the price currently charged.