Court orders Eesti Energia to pay private energy company 3.1 million

29.04.2010, 14:09

Viru county court has ruled in favour of Baltic Energy Partners, an energy company owned by businessman Urmas Sõõrumaa, and ordered state power company Eesti Energia to pay the company 3.1 million kroons in damages. The court found that Eesti Energia had breached its contract when it refused to sell electricity to BEP back in 2008, forcing the private company to supply its customers with electricity procured at a much higher tariffs from elsewhere, writes

Tõnu Aas, CEO of Narva Power Stations that belong to Eesti Energia, refused to comment the court ruling in detail and said that the company was likely to appeal against the ruling.

Priit Mikelsaar, board member of BEP, said that the first-instance court ruling showed that fair and transparent approach to market operators was a standard also in the energy sector.

Eesti Energia that is a virtual monopoly on the market explained that BEP was becoming to greedy and therefore Eesti Energia decided to stop selling electricity to BEP. Eesti Energia claims that Narva Power Stations stopped wished to stop the practice where BEP was purchasing cheap electricity from the internal market and re-sold it at a profit at the expense of Estonian power consumers.

The claim of inappropriate is hotly denied by BEP and board member Priit Mikelsaar. "The re-sale at a profit that Eesti Energia is referring to is inappropriate and inaccurate attempt to confuse uninformed people and to save face," noted Mikelsaar.

The dispute between the two power companies began in February 2008 when Narva Power Stations stopped supplying power to two customers of BEP and demanded that the two companies sign direct electricity supply contracts with Eesti Energia.

The two companies, electric network enterprises Kulon and Sagro Elekter, had signed a contract with the power station for purchasing electricity ts pre-determined supply terms. At the same time the two companies had signed an open supply contract with BEP.

When the two network operators refused to comply, Narva Power Station stopped supplying them until May 20, 2008.

The court found that Kulon and Sagro had contracted BEP to act as a balance manager that sells and buys electricity to partners so that they can keep a balance between purchased and consumed electricity amount.