Estonian parliament wants to terminate electricity sale as universal service in the summer

TALLINN – A bill to amend the Electricity Market Act, which would, among other things, put an end to the sale of electricity as a universal service in Estonia, will be on the second reading in the Riigikogu on Wednesday.

The universal service will continue to be provided until the Riigikogu has determined the end date of the service.

In December last year, the government endorsed and sent to the Riigikogu a bill to amend the Electricity Market Act and other acts prepared by the Ministry of Climate Affairs, which would have repealed the entire universal service regulation from May 1.

If the bill passes its second and third readings during April, and the president promulgates it as a law during May, the universal service can be terminated from July 1

"The goal of the establishment of the universal service was to protect consumers from high electricity prices during the energy crisis. Last year, and during the first three months of 2024, there hasn't been a single month where the market price has exceeded the production cost of the universal service, which is 154.08 euros per megawatt-hour. The average market price for March this year was slightly over 68 euros per megawatt-hour, which is more than two times lower than the production cost of the universal service," said Kristjan Kaldmaa, adviser on the security of supply at the Ministry of Climate.

The bill says that consumers still using the universal service will be transferred to the same seller's exchange-tariff based package a month before the universal service is terminated. This will give consumers enough time to decide whether to accept the exchange-based price or to opt for a fixed-price electricity package, for example.

"Ultimately, it is up to each consumer to decide at what price they are willing to consume electricity and which electricity package best suits their preferences," Kaldmaa added.

As of February, nearly 56,000 households in Estonia were still on the universal service. In addition, there are also home consumers who use the general service at the price of the universal service. Universal service had the most users in January 2023 -- 310,000 -- including those on a universal service contract and those on a general service contract at the price of the universal service.