ANNUAL REPORT 2010 - Konkurentsiamet

YEAR 2010 IN THE ENERGY AND WATER REGULATORY DIVISION
The year 2010 was significant for the Energy and Water Regulatory Division in several
respects. On 1 November, the Establishment of Price Limitations to Monopolies Act
entered into force, adding approximately 70 water operators and all heat operators
which were previously under the jurisdiction of local governments to the area of
regulation of the division. As a result of organisational restructuring the former Railway
and Energy Regulatory Division was renamed to the Energy and Water Regulatory
Division.
One of the pivotal tasks of the Energy and Water Regulatory Division is to ensure stable
conditions to consumers in the sectors of electricity, district heating, natural gas as well as
public water supply and sewerage systems. The activities of the Energy and Water
Regulatory Division are predominantly guided by the Electricity Market Act, the Natural
Gas Act, the District Heating Act, the Liquid Fuel Act and the Public Water Supply and
Sewerage Act. The Division made 212 decisions and one injunction during the year 2010.
The number of decisions was affected mainly by changes in fuel and electricity prices. The
most work intensive were price approval proceedings. As of 31 October, one electricity
transmission network operator, 39 electricity distribution network operators, one natural gas
transmission network operator, 27 natural gas distribution network operators, 50 heating
operators in various network sections, three electricity and heat producers and oil shale
miners were under regulation in the energy sector.
Electricity, natural gas, district heating as well as public water supply and sewerage services
reach the consumers via a corresponding infrastructure. As the infrastructure consists of
natural monopolies, their price regulation falls into the area of regulation of the
Competition Authority. In case of the infrastructure of electricity and natural gas, the
network usage fees do not depend on fluctuations of crude oil prices in the global market but
rather on local economic circumstances involving investment needs, changes of product and
service prices based on internal inflation and technical efficiency.
Pursuant to the electricity and natural gas directive of the European Union, all electricity
and natural gas consumers are provided with free access to the network. Therefore,
consumers are entitled to choose their electricity or natural gas providers and change the
providers when they so desire. Regarding the opening of the electricity market, Estonia has
a transition period until the year 2013. By the year 2010, Estonia had to open its electricity
33