Energy price compensation for household consumers

Compensation of energy costs to household consumers.

Information about the grant

In order to mitigate the effects of the increase in energy prices on household consumers, the state has developed various temporary subsidies. They apply to invoices issued to consumers for energy consumed between 1 October 2022 and 31 March 2023.

The subsidies are automatic, i.e., the seller reduces the unit price of electricity, gas or district heating on the energy bills that are received by household consumers. As a rule, you do not have to do anything yourself, and the support will be reflected for the first time in November, when the October invoices have been received. 

Grants are awarded in Estonian and more information can be found on the EIC website here.

• Compensation of electricity prices

A household electricity consumer is compensated for up to 5 cents/kWh from the average monthly price of electricity excluding VAT, which exceeds 8 cents per kilowatt-hour (kWh).

For example, if a consumer buys electricity at a monthly average price of 15 cents/kWh, then the price to be paid by the consumer would be 10 cents/kWh with the help of compensation.

The compensation is based on the average monthly electricity cost of the household consumer. For example, if the consumer’s bill for electricity was EUR 100 net of VAT at 50 kWh of consumption, the average price of electricity for that month net of VAT will be 20 cents/kWh.

The compensatory measure is measuring point-based. This means that if the consumer has several measuring points, the consumer will receive compensation for each measuring point.

The beneficiaries also include consumers of universal electricity services. You can read more about the universal service here (in Estonian).

• Gas price compensation

For household gas consumers, the state compensates 80 per cent of the part of the average monthly gas price that exceeds EUR 80 per MWh net of VAT, or EUR 0.7744 per cubic metre. At the same time, maximum consumption of up to 2.6 MWh (or 251.7 cubic metres) is compensated, which is the monthly gas consumption of an average private household.

For example, if during the month, the consumer spent an average of EUR 230 per MWh (excluding VAT) on gas at a consumption volume of 2.6 MWh, then after the application of compensation, the price paid by the consumer would be EUR 110 per MWh.

The compensatory measure is measuring point-based. This means that if the consumer has several measuring points, the consumer will receive compensation for each measuring point.

• Reimbursement of district heating prices

Similarly to gas, a household consumer of district heating is compensated for the heat cost exceeding the price of EUR 80 per MWh (excluding VAT) to the extent of 80 per cent.

For example, if the price of heat distributed through the district heating network is EUR 97.15 per MWh (current limit price in Tallinn), it will decrease to the level of EUR 83.4 per MWh for the consumer. Based on this example, the cost of district heating is reduced by 14 per cent.

Receiving a grant and submitting an application

The subsidies are automatic, i.e., the seller reduces the unit price of electricity, gas or district heating on the energy bills that are received by household consumers. As a rule, you do not have to do anything yourself, and the support will be reflected for the first time in November, when the October invoices have been received. 

The application for a grant must be submitted by:

• Electricity sellers, gas sellers and district heating network operators who sell energy to household customers. On the basis of the application, the seller is reimbursed for the loss of income from the consumer.

According to the regulation, the electricity seller, gas seller or district heating network operator lowers the bill of the household consumer or apartment association and also highlights the corresponding discount on the invoice. If the contract with the energy seller has been concluded in the name of a private person or in the name of the apartment association, then there is no need to do anything else; this includes a member of the apartment association not having to submit an application! The apartment owner can contact the apartment association with questions related to the invoice, who has an overview of the discount provided on the invoice received from the seller. The application forms can be found here (in Estonian).

• Intermediaries (persons who are not an apartment association and who supply electricity, gas or heat distributed through the district heating network to a household customer) if the household consumer has not received automatic support from the energy seller.

The intermediary may be a private person (e.g., a gas contract in a terraced house is in the name of one person because there is one measuring point) or a company/NGO/local government (owner of a rental apartment, contracting parties on behalf of apartment associations, i.e., management companies, co-ownership, social housing). In such cases, the seller does not know that the company that entered into the contract is a household consumer and it is necessary to submit an application to the EIC (the application is submitted by the person who has the contract with the seller). The application forms can be found here (in Estonian).

These exceptional cases require a case-by-case assessment, which must take into account relevant factual circumstances, in particular whether the dwellings are separate (i.e., at least an apartment entered in the register of construction works), whether there is a separate household, whether there is a separate legal basis for the use of the dwelling (ownership or tenancy), etc.

If necessary and possible, you should review your contracts and, in order to receive an automatic discount, conclude a contract in the name of a private person (companies that distribute energy to tenants) or in the name of an apartment association (if the formation of an apartment association is mandatory and possible, but, for example, one private person or a company pays the bills for gas). The above does not apply to private persons who belong to an apartment association, but who have separate contracts for electricity consumption; they will receive the discount automatically!

PS! There is also no discount on the invoice if the price indicated in the consumer’s contract is less than the limit of compensation specified in the regulation. For example, if the contract is concluded for a fixed-price gas of EUR 0.5 per cubic metre and since compensation under the Regulation is paid in excess of EUR 0.7744/m3, no additional discount will apply.

Submission of application:

1. The application shall be submitted to the EIC by the 14th day of the month following the month of sale of energy, to the e-mail address [email protected];
2. The application form and the list of necessary annexes can be found here (in Estonian).
3. Applications shall be accepted starting in November, when sellers have October sales data or an October invoice has been received by intermediaries.
4. A separate application shall be made for each month.
5. The amount requested on the basis of the application is transferred to the bank account provided by the applicant. The transfer of compensation (including by an intermediary) to a household consumer is additionally controlled by the EIC.

Frequently asked questions

• Does the apartment association have to submit an application to the EIC in order to receive support?

If the apartment association has concluded a direct contract with an electricity, gas or district heating seller, the application does not have to be submitted and the subsidies are applied automatically. However, if energy is mediated to the apartment association by a management company, the company must turn to the EIC for support, in order for the support to reach the household consumer.

The members of the apartment association should contact the apartment association if they have any questions related to invoices.

• Does the entire apartment association only receive gas support to the extent of 2.6 MWH of consumption?

No, the consumption limit does not apply to apartment associations. The 2.6 MWh consumption limit applies to contracts concluded in the name of private persons. This is the average monthly gas consumption of a private house.

The gas contract for the entire terraced house is in the name of one person. Will we receive support and how?

If a terraced house has a gas contract in the name of one private person that guarantees the availability of energy for everyone, it would be reasonable to redo it separately for each consumer. Thus, in the compensation measure for gas prices, subsidies per household are applied in the maximum possible amount. Otherwise, the energy seller’s database will count you as one consumer, and the support will therefore be less. Another option is to submit an application for compensation to the EIC so that the support would apply to all households.

• I live in a rented apartment. Will I receive support?

If the consumer rents an apartment from a private person in whose name an energy contract has also been concluded, the subsidies will be applied automatically.

If the lessor is a company in whose name an energy contract has also been concluded, the company must submit an application to the EIC. It is definitely worth communicating with the landlord on this topic so that the support is definitely applied to the household consumer.

• If I start using the national universal service, will I receive electricity support?

Yes, the use of universal service does not preclude support. Just like with any other electricity package, electricity compensation from the state is automatically deducted from the bill.

If the consumer does not have a fixed package at a favourable price, it is definitely worth considering using the universal service. Together, the universal service and support will lead to a greater victory in reducing energy costs. It is worth asking your electricity seller about the availability of universal service from 1 October.

Additional information about the universal service can be found HERE.

• I live in a house with wood heating. Why am I not receiving support?

The government coalition’s agreement on energy subsidies was born on the principle of finding automatic solutions that can be applied to a large number of people all at once. Unfortunately, the sale of firewood or briquettes does not take place in the same way as in the case of gas, electricity or district heating, so such support could be granted on the basis of individual decisions.

If a person finds themselves in a difficult situation due to the increase in the price of heating material, which is not compensated by state measures, it is definitely worth contacting the social department of their local government, who will be able to help with social benefits.

• We have a gardening association. Do we have to submit an application to the EIC to receive support?

Gardening associations generally receive compensation automatically.

• I am a legal person who has a contract with an energy supplier, but the consumer is a private person / apartment association. Will I receive support?

In this case, the person who has the contract with the supplier can contact the EIC and apply for compensation for household consumers as an intermediary. The compensation received must be passed on to the household consumer.

This also includes the owners of substations, all kinds of cooperatives, communities, where separate connections have never been made for some reason and an intermediary who is a legal person has remained the representative.

• I have an apartment/house owned by a commercial company (e.g., a private limited company). Will I receive support?

A legal person can submit an application for support to the EIC if the legal person has concluded a contract with the supplier and if the apartment/house is inhabited by a household consumer (lessee) with whom a lease contract has been concluded and the utility costs are not included in the fixed rent price. The compensation must be passed on to the household consumer, the lessee! Lease contracts concluded between legal entities are not eligible for compensation intended for household consumers!

If possible, the contract of the household consumer should be converted to the name of a private person, then the compensation will be applied automatically on the invoice.

Persons receiving electricity, gas and district heating through the apartment association, including legal persons, do not have to submit an additional application.

• Contracts with the energy supplier are managed by a non-profit association. Will the non-profit association receive energy compensation support?

A non-profit association can submit an application for support to the EIC if it has a contract with a supplier and mediates the service to a household consumer. The compensation received must be passed on to the household consumer.

• Our house is in co-ownership. How should I proceed to receive the compensation?

In the case of electricity – even if the contract for different apartments is in the name of one private person, then the compensation on the invoice is applied automatically in its entirety and there is no need to do anything extra.

In the case of gas – if each apartment has a separate contract with a gas supplier on behalf of a private person, the compensation will be applied automatically. If there is one measuring point and one contract for the house, then an automatic discount in the extent of 2.6 MWh will be applied on the account of a private person, and an application should be submitted to the EIC to cover the rest. The extent of compensation for each apartment is up to 2.6 MWh, depending on actual consumption.

If the contract with the supplier has been entered into by an intermediary who is a legal person (e.g., a private limited company, a non-profit association), the contracts should be formalised in the name of private persons or, if this is not possible, an application can be submitted to the EIC.

• We manage dormitories. Will we receive support?

In the case of dormitories, the support is granted if the resident is a household consumer and utilities are invoiced according to consumption, i.e., they are not fixed in the rental price as a service.

• I live in social or municipal housing. Will I receive support?

If the lessee also receives a separate invoice for accessory expenses in addition to the rent invoice, it is possible for the legal person (management company, local government) who has a contract with the energy supplier to ask for compensation from the EIC and transfer it to the lessee. If the contracts are made in the name of the apartment association or in the name of a private person, the discount is applied automatically and there is no need to do anything extra.