Tallinna Vesi Adjusts Water Service Prices Amid Power Cost Hike
Understanding the Price Adjustment from Tallinna Vesi
Tallinna Vesi is stepping in to address the rising prices of electricity, which have prompted a necessary modification in the costs associated with water services. Officials have applied to the relevant regulatory body to revise these prices, with plans for implementation beginning on 1 November, reflecting an increase that averages one cent per cubic meter.
The Impact of Electricity Costs on Water Services
As explained by Aleksandr Timofejev, the CEO of Tallinna Vesi, the surge in electricity costs—approximately 19%—has significantly influenced the pricing framework currently in place for water services. He highlighted that electricity is a critical factor in the ongoing operations of water treatment. Unlike many businesses, water utilities must operate continuously, making it impossible to time their electrical consumption for more favorable rates. “We operate without a break, maintaining the essential processes of clean water production and wastewater management,” Timofejev noted.
Household Water Usage Calculations
Timofejev pointed out that the average family in Estonia utilizes about three cubic meters of water monthly per member. Therefore, the projected adjustments indicate that households served by Tallinna Vesi might see an increase of around 3 cents per person each month, exclusive of VAT. This outlines a clear yet manageable increase for consumers.
Details of the Upcoming Price Structure
From November, the new pricing structure for water services will include a charge of €1.85 per cubic meter, plus VAT for residential customers. Business customers will face a higher rate of €3.47 per cubic meter, also plus VAT. In the distinct Maardu operating area under Tallinna Vesi's purview, the water price will be set at €3.86 per cubic meter plus VAT due to its separate pricing considerations.
Energy Consumption Breakdown
Electricity consumption heavily influences Tallinna Vesi’s variable production costs, representing nearly 50 percent of these expenses. The majority of electricity is allocated to essential processes such as wastewater and drinking water treatment, along with operations at pumping stations. For instance, considerable energy consumption is required for ozonators, which play a vital role in ensuring water cleanliness and limiting chlorine use.
Investments in Sustainable Technologies
In response to the increasing electricity costs, Tallinna Vesi is committed to investing in sustainable technologies aimed at reducing overall energy reliance. A standout initiative includes the construction of a cogeneration (CHP) plant that utilizes wastewater to generate energy. This facility, soon to be operational, is expected to decrease the amount of electricity needed by about 17%, significantly benefitting the company's energy strategy and cost management.
Tallinna Vesi’s Position in the Market
Tallinna Vesi stands as Estonia's largest water utility, servicing nearly 25,000 private clients alongside numerous businesses and approximately 500,000 end consumers spread across Tallinn and its neighboring regions. The company is publicly traded on the Nasdaq Tallinn Stock Exchange. Major shareholders include the Municipality of Tallinn, which holds a substantial 55.06%, alongside Utilitas, which possesses 20.36%. A noteworthy 24.58% of Tallinna Vesi's shares are available for public trading.
Contact Information
For further inquiry, you can reach out to Taavi Gröön, the Chief Financial Officer of Tallinna Vesi, at (+372) 62 62 200 or via email at taavi.groon@tvesi.ee.
Frequently Asked Questions
1. Why is Tallinna Vesi increasing water service prices?
The price adjustments are primarily due to rising electricity costs, which significantly impact water treatment operations.
2. When will the new water prices take effect?
The revised water prices will take effect on 1 November.
3. How much will the average household's water bill increase?
Households may see an increase of about 3 cents per person per month, excluding VAT.
4. What are the new rates for residential and business customers?
The new rates will be €1.85 per cubic meter for residential users and €3.47 per cubic meter for business users, both plus VAT.
5. What sustainability initiatives is Tallinna Vesi pursuing?
Tallinna Vesi is investing in sustainable technologies, including a cogeneration plant designed to reduce electricity consumption by using wastewater to generate energy.
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