First reading of the Draft Act amending the Electricity Market Act and other acts (termination of universal service and ensuring security of supply) (Bill 351 SE)
Session: 15th Riigikogu, 3rd session, plenary session
Date: 2024-02-14 19:51
Participating Politicians:
Total Speeches: 33
Membership: 15
Agenda Duration: 44m
AI Summaries: 33/33 Speeches (100.0%)
Analysis: Structured Analysis
Politicians Speaking Time
Politicians
Analysis
Summary
The Riigikogu debated the first reading of Bill 351, initiated by the Government of the Republic, to amend the Electricity Market Act and other acts, the main objectives of which are ensuring the security of supply of the electricity market and terminating the universal service. Climate Minister Kristen Michal introduced the three main topics of the bill: the creation of a strategic reserve to prevent a shortfall in controllable production capacities, the abolition of the universal service starting April 1, 2024, and the inclusion of the administrative costs of the LNG mooring quay, necessary for ensuring the security of natural gas supply, into the gas procurement fee.
The timing of the termination of the universal service was at the center of the debate. The opposition (Centre Party) criticized the government for rejecting a similar proposal several months earlier, as a result of which the elderly and less active consumers have incurred significant financial loss. Minister Michal defended the creation of the service as a measure to provide security during a crisis, but agreed that since the price of the service is consistently higher than the market price, its role as a mechanism for providing social security has practically disappeared. The Isamaa faction proposed not to abolish the universal service, but to supplement it (e.g., by setting a price ceiling) so that it would serve as a preparedness measure for crisis situations.
Decisions Made 2
The first reading of Bill 351 was concluded.
The deadline for the submission of amendments was set for February 28, 2024, at 5:15 PM.
Most Active Speaker
Lauri Laats (Center Party faction) was one of the most active questioners and critics. His stance was clearly oppositional, focusing on the government's inaction regarding the termination of the universal service. He stressed that the Center Party had made a proposal with the same content previously, and pointed out that the postponement of the decision had caused financial damage, particularly to older and less informed consumers who continued to utilize the universal service.
Aseesimees Jüri Ratas
AI Summary
Jüri Ratas moves on to the second item on the agenda, the first reading of Bill 351, concerning the amendment of the Electricity Market Act and other acts (termination of the universal service and ensuring security of supply), and invites Climate Minister Kristen Michal to present the report.
Kliimaminister Kristen Michal
AI Summary
Climate Minister Kristen Michal is presenting to the Riigikogu the draft Act on amendments to the Electricity Market Act and other Acts, which was initiated by the government on December 11, 2023.
Aseesimees Jüri Ratas
AI Summary
Jüri Ratas called for quiet from the presenter and those in the hall, ensuring the session would not be interrupted and the work could proceed smoothly.
Kliimaminister Kristen Michal
AI Summary
Kristen Michal explained that the amendments to the electricity and gas laws will establish a strategic reserve, eliminate the universal service starting April 1, 2024, and incorporate the administrative costs associated with the mooring quay for servicing the LNG FSRU into the gas procurement fee. These measures are intended to guarantee the security of supply for consumers and proactively curb price hikes during a crisis. Additionally, the Competition Authority is authorized to initiate misdemeanor proceedings against gas sellers to prevent them from accruing unreasonable profits.
Aseesimees Jüri Ratas
AI Summary
Deputy Speaker Jüri Ratas thanks the Minister, notes that there are questions, and gives the floor to Lauri Laats.
Lauri Laats
Profiling Eesti Keskerakonna fraktsioonAI Summary
Lauri Laats noted that the initiative to terminate the universal service did not receive approval in the Riigikogu or the committee, and coalition members voted it down. He then asked why this issue couldn't have been resolved already last year, given that the termination planned for April 1st would bring significant financial benefit to the public.
Kliimaminister Kristen Michal
AI Summary
Climate Minister Kristen Michal said that the purpose of creating the universal service was to offer people a fixed energy price on the volatile market due to Russian aggression. However, since its price is on average higher than market prices and many consumers are passive, it was decided to terminate the universal service starting April 1st and give people the opportunity to choose a more favorable package or switch to the market price.
Aseesimees Jüri Ratas
AI Summary
Deputy Speaker Jüri Ratas referenced the Finance Committee Chairman's remarks regarding a lean state, noted the lack of a signal on the screen, and, acting on behalf of the presiding officer, declared a ten-minute recess to restore the signal.
Aseesimees Jüri Ratas
AI Summary
Deputy Speaker Jüri Ratas declared the recess requested by the Chair concluded, thanked his colleagues, and announced that we are currently on Bill 351. Climate Minister Kristen Michal is at the rostrum, and we are commencing the question-and-answer round. Mr. Andrei Korobeinik, the floor is yours!
Andrei Korobeinik
Profiling Eesti Keskerakonna fraktsioonAI Summary
Korobeinik argued that the Centre Faction's proposal should have been adopted and the decision finalized sooner, because those who continue to use the universal service are not wealthy, but elderly people, for whom missing out on five to ten euros is a significant amount, and failing to make a decision every month costs the poorest people about 100,000 euros.
Kliimaminister Kristen Michal
AI Summary
The choice of energy package is open to everyone, the market is active, and if no choice is made, the universal service provided by the state will expire on April 1, 2024.
Aseesimees Jüri Ratas
AI Summary
Deputy Chairman Jüri Ratas asked Lauri Laats to come.
Lauri Laats
Profiling Eesti Keskerakonna fraktsioonAI Summary
Lauri Laats stressed that the question of exempting the universal service could have been resolved faster, given that both the coalition and the Center Party faction’s proposal already included it. By December, 200,000 clients—primarily older people who have less experience with IT solutions—would have benefited from this and saved money. He then asked why this couldn't have been implemented faster, similar to how tax increases are handled.
Kliimaminister Kristen Michal
AI Summary
Climate Minister Kristen Michal confirmed that the tax had been passed by parliament, emphasizing that consumers have always had the option to choose between an energy package dependent on the exchange price or a fixed one, and that information has been readily available.
Aseesimees Jüri Ratas
AI Summary
Priit Sibul is invited to take the floor.
Priit Sibul
Profiling Isamaa fraktsioonAI Summary
Priit Sibul asks what the current legislation states regarding the use of reserve capacity, what the proposed amendment under discussion entails for us, what the conditions for its use are, and why this change is necessary in the first place.
Kliimaminister Kristen Michal
AI Summary
The Reserve Capacity Mechanism ensures dispatchable generation capacity in the event of market disruptions, and in the future, it will replace the provision currently guaranteed by old oil shale power plants. Elering will assess the necessity and organize a procurement for implementing the mechanism.
Aseesimees Jüri Ratas
AI Summary
Vice-Chairman Ratas invites Andrei Korobeinik to the stage.
Andrei Korobeinik
Profiling Eesti Keskerakonna fraktsioonAI Summary
Korobeinik stressed that the universal service is implemented automatically and people can opt out, but the elderly tend to view proposals skeptically and could miss out on funding due to bureaucratic delays, meaning that a good proposal should be considered for acceptance regardless of its originator.
Kliimaminister Kristen Michal
AI Summary
Climate Minister Kristen Michal said that the opposition's earlier proposal regarding the universal service has now been implemented by the government, and both sides can be satisfied with it.
Mart Maastik
Profiling Fraktsiooni mittekuuluvad Riigikogu liikmedAI Summary
Mart Maastik notes that the universal service was created under conditions of market failure, and he debates whether it should be improved for crisis situations and implemented immediately, or rather abolished entirely to prevent the recurrence of quick, improvisational solutions.
Aseesimees Jüri Ratas
AI Summary
Jüri Ratas called upon Mart Maastiku to speak.
Kliimaminister Kristen Michal
AI Summary
Kristen Michal stated that the universal service provided a sense of security at a time when prices were highly volatile. The state has experience and regulations for implementing various support mechanisms during crises and is prepared to increase security by simplifying the addition and planning of energy production. However, the universal service does not need to be continued or significantly improved, because the state can implement an appropriate mechanism should a crisis occur.
Aseesimees Jüri Ratas
AI Summary
Andrei Korobeinik raised a procedural question.
Andrei Korobeinik
Profiling Eesti Keskerakonna fraktsioonAI Summary
Andrei Korobeinik is requesting clarification as to why a procedural question concerning the deliberation of the car tax bill has been pending for about three hours, and exactly when it is permitted to raise it after pressing the button.
Aseesimees Jüri Ratas
AI Summary
Ratas said that three hours ago he was not leading/directing, and he cannot comment on the situation precisely.
Priit Sibul
Profiling Isamaa fraktsioonAI Summary
Priit Sibul pointed out that the universal service in its current form is obsolete, and then asked whether there had been any discussion regarding its improvement, the merger of the Baltic stock exchange regions, and whether the utilization of reserve capacities might help mitigate price volatility.
Kliimaminister Kristen Michal
AI Summary
Kristen Michal pointed out that the concept of the universal service and its continued development remain under discussion. At a production price of 154 euros, market entry is impossible, and greater certainty will be achieved either through a fixed-price package or a market-based package. Furthermore, Europe and Estonia are prepared for crises, learning from each one and getting ready for future investments and energy policy debates.
Aseesimees Jüri Ratas
AI Summary
Deputy Speaker Jüri Ratas thanked the Minister, stated that there were no questions, and invited Mario Kadastik, a member of the Riigikogu Economic Affairs Committee, to the podium.
Mario Kadastik
Profiling Fraktsiooni mittekuuluvad Riigikogu liikmedAI Summary
The Economic Affairs Committee discussed the given draft bill on January 22nd with the minister and the officials involved, answered questions concerning the universal service, the role of the Competition Authority, security of supply, and reserve capacities, and explained the mechanism's operation. Furthermore, it appointed the current speaker as the representative of the leading committee, placed the draft bill on the plenary session agenda on February 14th, and concluded the first reading.
Aseesimees Jüri Ratas
AI Summary
Jüri Ratas announced that there were no questions, opened the discussions, and invited Mart Maastik, the representative of the Isamaa faction, to the Riigikogu rostrum for a presentation.
Mart Maastik
Profiling Fraktsiooni mittekuuluvad Riigikogu liikmedAI Summary
Mart Maastik said that the draft bill focuses on ensuring security of supply, and that the universal service must not be ended. Instead, it needs to be supplemented with mechanisms like a price cap and a state guarantee. This is necessary to ensure competitiveness in the European market and to provide certainty to both businesses and consumers in the event of threats arising in the energy sector.
Aseesimees Jüri Ratas
AI Summary
Ratas declared the negotiations concluded; the first reading of Draft Bill 351 was concluded upon the leading committee’s proposal, and the deadline for submitting amendments is February 28 of the current year at 17:15; the consideration of the second agenda item is over.