Eesti Energia’s universal service margin twice higher than rival’s

Illustration: Pm

Among January’s universal service margin of major network operators, the most customer-friendly was that of VKG Elektrivõrgud OÜ with €0.49 incl. VAT, followed by Imatra Elekter AS (€0.63) and Eesti Energia (€0.72).

«The gap between lowest and highest margins reached 47 per cent, which leads to a Competition Board type question: how do they arrive at margins like that?» commented Moonika Kukke, chief executive of unbiased energy portal energiaturg.ee.

While Eesti Energia’s sales margin from universal service is €0.72, with its open market packages it amounts only to €0.29.

According to Competition Board chief Märt Ots, the universal service margin is too high and the board will be investigating its background. Should the margin be proven to be excessive, the board will issue an injunction and demand it to be lowered.

According to Moonika Kukke, energiaturg.ee CEO and energy law attorney, the expenses related to universal service should not exceed those of open market packages, as not even a contract is entered with customers in that case.

According to Eesti Energia energy sales manager Karla Agan, the universal service price is strictly cost-oriented and justified. «Should the Competition Board desire to prove it, we are willing to cooperate fully. Opinions expressed without looking behind the figures, are, however, arbitrary,» added Mr Agan.

What causes the price difference with universal services, Mr Agan said, is the fact that with every company, the volumes of consumption and expenses differ. According to him, Eesti Energia has a much wider network of customer service channels than other providers, not to mention the regional offices; and their information systems are supposed to bear up under loads dozens of times heavier. Also, far greater financial risks have to be considered with settlements and debt management.

According to Mr Agan, sales margin of €0.72 does not equal profit margin, making 3-4 per cent of the final kWh price of the universal service. He added that universal service is not compulsory to any client.