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What happens?
According to the TT news agency, the government will stop calls for the introduction of impact fees. This comes after widespread criticism from almost every quarter imaginable. Among other things, the issue was that the fee conditions were unclear and difficult to understand and that the wrong customers were being punished.
If the information is correct, this means that the requirement that all electricity network operators have introduced the fee by 2027 will be stopped. However, the 30 to 50 companies that have already introduced the fee, including Ellevio, do not appear to be forced to abolish it and, according to TT, anyone who wants to can still introduce it – although the government expects no one will.
This is how the fee works
● Power indicates how much electricity is used at a given time and is measured in watts (W) or kilowatts (kW), which means a thousand watts. It should not be confused with kilowatt hours (kWh), which measure how much electricity is used over time, i.e. electricity consumption.
● A performance peak is the hour with the highest average performance per day. Example: If you use 0 kW between 10:00 a.m. and 10:30 a.m. and then 10 kW between 10:30 a.m. and 11:00 a.m., the hourly average power is 5 kW.
If it is the hour of the day with the highest average power, that will be the peak power of the day.
● The highest power peak or the average of several highest power peaks in a month (this varies by company) is then multiplied by a predetermined price to create your electricity charge.
What does that mean?
If the electricity tax is stopped, it is in a sense a temporary victory for consumers, who do not have to think about this rather complicated tax, and perhaps also for the electricity network operators, who do not have to introduce a system that mostly just annoys customers. However, you shouldn’t expect it to become cheaper just because the fee is stopped.
This may be a relief for individual households who have failed to adjust their electricity consumption in line with the fee, or for those who have failed to adjust and received a high fee for doing so. But for households as a collective there will be no difference. The network companies have the same generous revenue frameworks – the rules for how much they can earn from their customers – until 2027, and as long as they remain that way, there is scope to continue increasing the other parts of the network fee.
DN recently reported on how both experts and regulator Energy Market Inspection (EI) estimate there is room for significant increases next year.
Do we waive the effect fee completely?
It’s not safe. So far the government has not confirmed TT’s data, and even if this is true, the entire model is based on an EU directive that says network tariffs must be designed to contribute to the efficient use of electricity networks. They want to spread the household’s electricity consumption throughout the day, and then EI concluded that this was the best way.
Now, according to TT, the authority has until April next year to come up with something better.
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