Administrative court ruled in favour of Enefit Power: Competition Authority’s supervision fee claim is not justified

Ellex in Estonia represented Enefit Power, the subsidiary of state-owned energy company Eesti Energia, in disputes with the Competition Authority regarding the universal service pricing regulation and the universal service supervision fee. Tallinn Administrative Court found that the calculation of the supervision fee was incorrect and the excessively supervision fee (including interest) must be returned.

In September 2022 the so-called universal service regulation came into force, under which Enefit Power had to sell electricity to electricity sellers at a price fixed for household customers.

At the same time, a regulation establishing among other things Enefit Power’s obligation to pay the Competition Authority a so-called supervision fee also entered into force. According to the Competition Authority’s order, Enefit Power was obliged to pay a supervision fee of 1.18 million euros which amounts to about 1/3 of the Competition Authority’s annual budget.

The administrative court ruled that the authority should have requested additional documents and calculated the supervision fee on the basis of sales revenue from the specific universal service.

The court noted that as Enefit Power’s supervision fee for the universal service was established on the basis of the maximum permitted sales revenue, the electricity producer essentially had to pay a supervision fee also on the sale of electricity that was not sold or produced for the provision of the universal service and was sold to electricity sellers under other agreements.

The determination of the fee in such manner also resulted in a situation where the charged amount significantly exceeded the amounts spent on supervision. The court emphasized that the aim of the supervision fee regulation could not have been to create a situation where the costs of the Competition Authority are largely financed by Enefit Power and the authority should have realised this when issuing the order.

The judgment has not entered into force yet.

Enefit Power was represented by Partners Martin Mäesalu and Martin Triipan and Senior Associate Kevin Gerretz, with assistance from Associate Alan Paas and Lawyer Miikael Tuus.