Elering Submitted Annual Tariff Adjustment Data

On August 30th, Elering submitted the base data of the annual tariff adjustment to the Estonian Competition Authority (ECA). The data will be used to amend the tariff confirmed last year for the three-year regulation period so that it reflects actual costs. Elering estimates that the tariff adjustment will bring an increase of 2.4 euros per year in the electricity costs for the average household.

Under the unified methodology for calculating the electricity network charges approved by the ECA and in accordance with the standpoints brought out in the resolution of Elering AS network charges, Elering has to adjust the network charges once in each year of the tariff period. There are two reasons for doing this - firstly, if the increase is driven by the three-year investment in fixed assets, and secondly, to reflect the actual costs of the last 12 months. The tariff level is set using the formula brought out in the calculation methodology.

Elering’s calculations estimate that the adjustment will raise the average network charge from 1.05s/kWh to 1.12s/kWh. For the average Estonian household (with annual consumption ca 2,500 kWh) the electricity bills will rise by around 2.4 euros a year, which is less than 1%.

Taavi Veskimägi, the CEO of Elering, said that the change in the tariff is mainly a consequence of the need for investment in an emergency reserve power station to safeguard the functioning of the Estonian electricity system and the building of the new EstLink 2 electricity connection between Estonia and Finland. “The ECA has approved the investments for the tariff period 2011-2013 and the major investments are confirmed as part of the duties of Elering under the development plan of the electricity sector to 2018 approved by the Estonian Government. There has been absolutely no change in the investment levels or operating profit as they were confirmed in the three-year plan for 2012,” he explained.

Under the current methodology the adjustment is made following the actual data for the last twelve months (August 2010 - July 2011) about electricity transmission levels, network losses, part of the impact of inflation on operating costs and other previously unforeseen costs.

Elering is the Estonian Transmission System Operator, whose main duty is to ensure high-quality supplies of electricity to consumers at all times. To achieve security of supply, Elering maintains and develops the national transmission grid and international connections. Elering controls the Estonian electricity system in real time, ensuring the operation of the transmission network, and the balance between production and consumption.

More information is available here (only in Estonian).