Elering Considers Eesti Energia’s Claim Entirely Unfounded

Estonian transmission system operator Elering finds that the claim made against it by Eesti Energia AS, which was published in the media, is unfounded in its entirety.

The first letter containing Eesti Energia’s claims was received by Elering in August of last year, followed by other communications. The latest letter from Eesti Energia arrived on February 14th, and in it, Eesti Energia calculated the size of the claim to be 9.2 million euros. Elering has analyzed the submitted claim along with its appendices, and does not agree with the statements that were presented.

Elering has acted in accordance with EU Regulation No. 714/2009, and all the principles of assigning transmission capacity that it employs have been approved by the Competition Authority before they were put in place.

In calculating the “fair” price of transmission capacity that forms the basis of its claim, Eesti Energia has used the price of the capacity auction for the same period of 2012. The rules of a free market economy provide no basis for such an approach. Demand and supply are based on the state of the market at a particular time, its specific events and factors. In a competitive environment, all auction types price the transmission capacity in the same manner.

The annual limited PTR auction introduced as of January 2014, as well as January and February’s auctions, have shown that competition is working, and the capacity prices from 2012 have no bearing on today’s prices.

Eesti Energia’s desire that the price risk inherent in selling electricity in Latvia and Lithuania be paid for by the Estonian electricity consumer through a higher transmission service fee is unacceptable to Elering. Elering has achieved significant profits through the correct pricing of transmission capacities, which allowed it to drop 2014’s transmission service tariff by 7.8% on average.