Estonian parlt committee: Universal service to be extended to local govts in near future

TALLINN – The economic affairs committee of the Estonian parliament on Thursday initiated a bill of amendments to the Electricity Market Act, which establishes the possibility for rural municipality or city institutions and the agencies managed by them to purchase electricity within the framework of universal service.

Committee chairman Kristen Michal said that local governments and their institutions are also affected by the energy war.

"Universal service provides peace of mind, the possibility to focus on one's main activity. That is why we are adding municipal and city institutions and the agencies managed by municipal and city institutions to the list of consumers of universal electricity service for household consumers and micro and small businesses. Thus, with the bill initiated by the economic affairs committee today, kindergartens, schools, libraries, sports facilities, care homes and shelters, for example, will have the opportunity to use universal service, the price of which is determined by an independent regulator, the Competition Authority," Michal said.

Deputy chairman Rene Kokk said that electricity provided as a universal service must be available without penalty.

"If an agency wants to switch to universal service, it must terminate the existing procurement contract for the purchase of electricity before the deadline and may be liable to pay a penalty. It is necessary to find a way not to punish those who terminate a contract with a fine," Kokk said.

While municipal and city authorities can purchase electricity at the universal service price without limit until April 30, 2026, the agencies they manage have a capacity limit of up to one gigawatt-hour per year. To use the universal service, the agency must sign a new procurement contract with a provider of universal service. In the case of early termination of an existing contract, a contractual penalty agreed upon when concluding the contract must be paid, if necessary.

The consumption volume of local governments is expected to be 0.4 terawatt-hours per year. Adding this to the volume of consumption by household consumers, which is 2 terawatt-hours, and the volume of consumption by micro and small enterprises, which is 1.87 terawatt-hours, the annual consumption volume comes to 4.27 terawatt-hours. With this volume, Eesti Energia is estimated to be able to guarantee the provision of universal service with more efficient production equipment without using less efficient ones, which would increase business consumers' price.

The economic affairs committee decided to send the bill of amendments to the Electricity Market Act to the plenary of the Riigikogu for a first reading on Nov. 14 with a proposal to conclude the first reading.