Understanding Tallinna Vesi's Price Changes
Tallinna Vesi is responding to the rising electricity prices by adjusting the costs of their water services. They have applied to the relevant regulatory authority to change these rates, with the new prices set to take effect on 1 November. This change will result in an average increase of one cent per cubic meter of water.
The Effect of Rising Electricity Costs on Water Services
Aleksandr Timofejev, the CEO of Tallinna Vesi, explained that the recent jump in electricity prices, now around 19%, has a major impact on how water services are priced. He pointed out that electricity is vital for water treatment operations. Unlike many other businesses, water utilities must run continuously, which means they can’t always take advantage of lower electricity rates. Timofejev stated, “Our operations never stop; we have to keep providing clean water and managing wastewater without interruption.”
How Household Water Usage Is Calculated
According to Timofejev, an average family in Estonia uses about three cubic meters of water every month for each family member. Consequently, under the new pricing, households served by Tallinna Vesi might notice an increase of around 3 cents per person on their monthly water bill, excluding VAT. This presents a straightforward yet manageable cost increase for consumers.
Details of the New Pricing Structure
Starting in November, residential customers will face a new charge of €1.85 per cubic meter for water services, plus VAT. Business customers will pay a higher rate of €3.47 per cubic meter, also plus VAT. Specifically, in the Maardu area, where Tallinna Vesi operates, the water price will be set at €3.86 per cubic meter plus VAT due to different pricing regulations.
Electricity Use and Its Impact on Costs
The variable production costs for Tallinna Vesi are significantly affected by electricity consumption, which accounts for nearly 50% of their expenses. A large portion of this electricity supports essential tasks like treating drinking water and wastewater and running pumping stations. For example, ozonators, which are crucial for ensuring the cleanliness of water while minimizing chlorine use, require considerable energy to operate.
Investments in Eco-Friendly Technologies
In light of the escalating electricity costs, Tallinna Vesi is dedicated to investing in sustainable solutions that aim to lessen energy dependence. One major project in the works is a cogeneration (CHP) plant that will turn wastewater into energy. This facility is expected to be operational soon and could cut electricity usage by about 17%, greatly enhancing the company’s energy strategy and financial management.
Tallinna Vesi’s Role in the Market
Tallinna Vesi is Estonia's largest water utility, providing services to nearly 25,000 private clients and many businesses, along with around 500,000 consumers in Tallinn and its surrounding areas. The company trades publicly on the Nasdaq Tallinn Stock Exchange. Its shareholders include the Municipality of Tallinn, which owns 55.06%, and Utilitas, holding 20.36%. Additionally, 24.58% of Tallinna Vesi's shares are available for public trading.
Contact Information
If you have any questions, you can contact Taavi Gröön, the Chief Financial Officer of Tallinna Vesi, at (+372) 62 62 200 or by emailing taavi.groon@tvesi.ee.
Frequently Asked Questions
1. Why is Tallinna Vesi raising water service prices?
The increase in prices is mainly due to the rising costs of electricity that significantly affect water treatment operations.
2. When will the new water prices be implemented?
The new water pricing structure will take effect on 1 November.
3. How much more will the average household need to pay for water?
Households are expected to see an increase of about 3 cents per person each month, excluding VAT.
4. What are the updated rates for residential and business customers?
Residential customers will pay €1.85 per cubic meter and business customers will pay €3.47 per cubic meter, both plus VAT.
5. What sustainable initiatives is Tallinna Vesi involved in?
Tallinna Vesi is investing in eco-friendly technologies, including a cogeneration plant intended to reduce electricity consumption by generating energy from wastewater.
