17 C
Rīga
Tuesday, July 23, 2024
No menu items!
HomeEstoniaEstonia's Elektrilevi increasing network fees despite high profits

Estonia’s Elektrilevi increasing network fees despite high profits

Estonia’s state-owned power distribution network operator Elektrilevi announced a significant increase in network charges, despite the company generating substantial profits, and the needs for the additional funds remain unclear, Postimees reports.

Elektrilevi announced that starting from October, customers will face an average increase of 7.1 percent in network fees. As a result, the network fee will be 4.4 cents per kWh from fall. Elektrilevi justifies the price increase by citing the need for higher maintenance and investment. It may seem as though Elektrilevi cannot manage without raising prices, but this is not the case.

In 2023, Elektrilevi earned a net profit of 34.3 million euros from sales revenue of 287.2 million euros while the operating profit was 44.5 million. This year also started strong — in the first quarter, the company posted an operating profit of 32.4 million euros from sales revenue of 85.6 million euros. Last year, investments amounted to 167.4 million euros.

“The company’s financial situation cannot be assessed solely based on the income statement, as it does not provide information on investment needs and cash flow,” Elektrilevi’s CFO Kristi Ojakäär said.

According to Ojakäär, Elektrilevi faces significant investments in 2025-2026.

“Major projects include upgrading the medium voltage network; reconstructing the regional substations in Viljandi, Jõgeva, and Reola; rebuilding lines; and renewing the submarine cable between Saaremaa and Hiiumaa,” she said.

However, despite the plans being clear and extensive, Elektrilevi does not disclose even approximate costs for projects like a regional substation.

“Since each project is unique, an average price cannot be provided,” Ojakäär said.

Elektrilevi has been aggressively raising network fees in recent years. In 2021, the network fee was 3.04 euro cents, and in 2022, Elektrilevi managed to raise the price three times. This autumn, the network fee will rise to 4.4 euro cents.

Meanwhile, in recent days, the electricity market price in Estonia has ranged from 7 to 14 cents per kWh, with many hours when the price is zero or even negative, meaning the network fee constitutes the largest part of the electricity bill.

Source: BNS

(Reproduction of BNS information in mass media and other websites without written consent of BNS is prohibited.)

LEAVE A REPLY

Please enter your comment!
Please enter your name here

RELATED ARTICLES

Most Popular