The Competition Authority has accepted Tallinna Vesi's application to change the prices for water supply service, price change is subject to Competition authority approval and expected to take affect during 2025. The change follows from the obligation imposed by law to harmonise the price of the service for private and business customers and reflects the need for continued investment to ensure clean drinking water and the environment and continuity of services.
According to Taavi Gröön, Chief Financial Officer of Tallinna Vesi, the change in water supply service prices follows from the need to continue investments and obligation imposed by law to gradually harmonise price for water services applied for households and business customers. The law, which entered into force in 2023, stipulates that pricing policies for different customer groups must be harmonised by July 2026 at the latest. Subject to the Competition Authority's approval of the application, the prices for water supply service will change by an average of 8% in 2025, rising for private customers and falling for business customers.
The price for water supply service for private customers in Tallinn and in Harju County will remain one of the lowest in Estonia. For the average household, the increase in water bills will be less than €3 per month. While the average household in Estonia spends more than 1% of its household income paying for water services, the average water bill in Tallinna Vesi's service area will be 0.5% of household income next year.
Water services for the residents of Tallinn are also cheaper than in any of its neighbouring capitals. Subject to approval by the Competition Authority, one cubic metre of water will cost €2.11 for private customers. In Riga, a cubic metre of water for households costs €2.14 and in Helsinki €3.28. These prices are subject to VAT.
The requested price change for 2025 is driven by the need to harmonise the price of water services, but also by the need for investment. "The price application takes into account the investments planned for 2025, which are necessary to maintain the quality of water and wastewater services and protect the environment, and to ensure the operational continuity of a vital service provider," explained Taavi Gröön.
Two per cent of the price change is due to an increase in operating costs. Gröön pointed out that the variable costs represent only a small part of the price change, as the combined heat and power (CHP) plant installed at the wastewater treatment plant will allow the company to reduce its daily electricity costs. "Based on the results of the CHP plant operation during the test period, we are planning to produce about 7 GWh of electricity at the wastewater treatment plant next year," says Taavi Gröön.
Tallinna Vesi is Estonia's largest water company continually investing in new technologies to ensure operational continuity. "For example, we use an innovative ice-pigging technology to clean pipelines, which is unique in Estonia. We have already made and are planning further investments in the wastewater treatment plant to ensure that the treated effluent released into the environment via the Baltic Sea is clean and meets high quality standards," added Gröön.
The price level in the Maardu service area differs from the rest of Tallinna Vesi's service area due to the operating model. The infrastructure in Maardu is owned by the Maardu water company, and Tallinna Vesi operates the infrastructure in the area, paying rent under a lease agreement with the Maardu water company.
The new prices for water services and the date of their application are subject to the proceedings of the Competition Authority, as is the impact of the change on the company's financial performance in 2025.
The price for wastewater service will not be harmonised. During the transition period provided for in the law, Tallinna Vesi, in cooperation with the City of Tallinn, will analyse the pricing methodology for wastewater service with a view to updating the pricing principles and changing to a pollutant load-based pricing methodology in 2026. The price for wastewater service will depend on the level of pollution of the wastewater discharged by the customer, and will be based on the polluter pays principle.
AS Tallinna Vesi is the largest water company in Estonia, providing services to more than 25,000 private customers and businesses and 500,000 end consumers in Tallinn and its surrounding municipalities.
Additional information:
Kristiina Tamberg
AS Tallinna Vesi
Head of Communications and Marketing
+372 52 855 21
kristiina.tamberg@tvesi.ee
