Elektrilevi's network service of transmitting electricity and maintaining the network is financed by the network fee. The network services fee is set by the government.

What are the components of the price of the network service?

The proportional value of the components of the network fee as of 1 April 2014

Elektrilevi's network fee has four major components: investments in the electricity network; the Elering transmission service fee and reactive energy fee; fixed costs, including network maintenance and repair costs; and the cost of electricity losses.

A reasonable profit or return on invested capital has been included in the network fee. The Competition Authority calculates this for all network operators in the same way.

Price lists for Elektrilevi's network
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Calculation of the
network fee

The network fee covers both investments and the cost of the maintenance and repair works that ensure the reliability of the power networks. The network service is the transmission of electricity to places of consumption such as private homes.

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Network fees in Estonia and neighbouring countries

Elektrilevi compared the network service fees for residential customers charged by Estonian, Finnish and Latvian network companies with service areas that are as similar as possible.

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Renewable energy fee

It is also one of the network operator's responsibilities to collect and transfer the renewable energy fee. The transmission system operator Elering calculates the renewable energy fee using the formula approved in the Electricity Market Act.

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Changes in the network fee in 2005-2014

A look at all of the electricity cost components shows that the increase in the network service fee has been lower than the rise in the consumer price index.

 

  • Renewable energy fee
  • Electricity excise
  • Network fee

* Consumer price index (CPI) for June 2013

The graph shows the major changes in the prices of the components on Elektrilevi's bills for network services since 2005. The figure does not state all the dates when the price changes took place. Network service costs have been a separate part of the total electricity bill since 2005. In 2008, the state established the electricity excise tax and the renewable energy charge, which are not parts of the network services fee but are still to be collected by the network operator.

The network service in electricity costs

The price paid by consumers for electricity can be divided into three parts: electricity, the network service fee, and state taxes and fees, which cover the renewable energy fee, electricity excise and VAT. On the basis of the average network services fee paid by all Elektrilevi customers and the average exchange price of electricity in the 2013 weighted against Elektrilevi's standard consumption schedule with the estimated average seller's margin added (0.22 cents/kWh net of VAT), price components are distributed as follows:

The percentage of the network services fee varies but it depends largely on the network and electricity package that the customer has chosen. For example the network fee is usually more than 40% of a residential customer's electricity bill.