WHAT IS UNIVERSAL SERVICE?

Universal service is an optional measure by the state to help people hedge risks and mitigate potential electricity price increases in the coming winter. Universal service is essentially an electricity plan that all private consumers and housing associations can join voluntarily.

If a consumer decides to switch from their current electricity plan to the universal service, the draft law does not permit the electricity supplier (e.g. Elektrum) to charge the consumer a contractual penalty until 30 September 2023. According to the proposal, the universal service would be valid for four years, but consumers can opt out earlier if they want to do so.

WHO HAS THE RIGHT TO USE THE UNIVERSAL SERVICE?

Universal service electricity is sold to household consumers and to persons supplying household consumers such as housing associations, management companies, local governments (social housing) and non-profit organisations to the extent necessary to supply electricity to household consumers in, for example, an apartment, a summer cottage, a garage or a private house.

Corporate customers who do not mediate electricity to household consumers cannot buy electricity as the universal service.

WHAT IS THE PRICE OF UNIVERSAL SERVICE?

The price of the universal service will be known by the end of September 2022 at the latest.

The final price offered to the consumer will consist of the production costs, a reasonable profit for the electricity producer and the sales expenses of the electricity supplier (e.g. Elektrum.

HOW CAN A HOUSEHOLD CONSUMER SUBSCRIBE TO UNIVERSAL SERVICE?

Electricity at universal service prices will be available from 1 October 2022. This is not an obligation for household consumers, but an option.

The electricity supplier that provides the universal service (Elektrum) is obliged to offer household customers electricity by way of the universal service if its consumer’s current electricity plan is more expensive than the universal service. The supplier (Elektrum) informs its customer of the decision to switch to the universal service tariff with seven days’ notice. If such a consumer does not want to use the universal service tariff, the consumer must notify the seller (Elektrum) at least two days before the change comes into force.

However, household customers who have not received an automatic offer will still be able to switch to the universal service if they want to do so. If a consumer changes the seller to use the universal service or is not automatically switched to the universal service with the current supplier, they must contact the supplier (Elektrum) themselves with their request. In this case, the universal service can be subscribed to in the same way as an electricity plan is switched.

If a household consumer has not opted for any electricity plan so far and is using the general service instead, they will automatically be switched to a tariff equivalent to the universal service tariff from 1 October.

Consumers who have a fixed plan and who have not received an automatic offer should therefore go to Elektrum’s self-service to familiarise themselves with their electricity contract and compare the tariff of their existing plan with the tariff of the universal service and decide accordingly whether to change their existing plan for the universal service.

WHAT IF I DON’T WANT MY ELECTRICITY SUPPLIER TO AUTOMATICALLY SWITCH ME TO THE UNIVERSAL SERVICE?

The supplier (Elektrum) will notify the consumer of the switchover seven days in advance. If a consumer using a higher-priced plan does not want to subscribe to the universal service, they must notify the supplier (Elektrum) of their refusal at least two days before the universal service enters into force.

I NEED SOME TIME TO THINK ABOUT WHETHER I SHOULD SWITCH TO THE UNIVERSAL SERVICE. IF I DO IT, FOR EXAMPLE, IN THE MIDDLE OF A MONTH, WILL I STILL PAY FOR THE OLD PLAN FOR HALF THE MONTH?

If you switch to the universal service with your current electricity supplier (Elektrum) in the middle of a month, the price of the universal service will be calculated retroactively, i.e. only the price of the universal service will be included on the electricity bill for the whole month.

HOW CAN A BUSINESS OR NON-PROFIT ORGANISATION SUPPLYING ELECTRICITY TO HOUSEHOLD CUSTOMERS JOIN THE UNIVERSAL SERVICE?

An entity supplying electricity to household customers who is not an electricity supplier but, for example, a management company, a non-profit association or a gardening cooperative, must contact an electricity supplier (e.g. Elektrum) in order to sell electricity at the universal service tariff to its household customers.

IS THERE A PENALTY FOR TERMINATING THE CURRENT FIXED-TERM CONTRACT?

If a household customer currently using a fixed-term electricity plan subscribes to the universal service, the electricity supplier (e.g. a Elektrum) may charge them the penalty for early termination of the contract provided for in the fixed plan contract. This rule will apply until 30 September 2023 for the first switch to the universal service. This gives the consumer the option to assess whether the price of the universal service is indeed more advantageous than the price of the current plan and to decide within this period whether to subscribe to the universal service instead of the current plan. However, if you switch your plan for the universal service several times during this period, you may be fined if your current contract so provides.

HOW LONG WILL THE UNIVERSAL SERVICE BE AVAILABLE?

The state can only temporarily regulate the price of electricity, which is why the universal service will be established until the end of April 2026. If the state does not extend the term of the universal service at that time, the universal service will expire at the end of April 2026, after which the consumer will have to choose a new plan.

WILL MY ELECTRICITY PRICE BE THE SAME FOR FOUR YEARS IF I CHOOSE THE UNIVERSAL SERVICE?

In the event of a significant increase in electricity production prices, a change in the tariff of the universal service is not ruled out. The new price will apply if the Competition Authority considers the price change to be justified, i.e. if it would become unprofitable for the generator to produce electricity under the universal service.

Should the generation prices fall over time, the price of the universal service would also have to fall.

WHY DO I NEED THE UNIVERSAL SERVICE WHEN THERE ARE FIXED PRICE PLANS?

The price of the fixed price plan is agreed by the electricity seller (for example Elektrum) with the consumer according to the electricity market situation. Today, due to the increase in gas prices, the generation and exchange price of electricity has increased significantly, which also means that sellers are not in a position to offer attractive fixed price plans. The price of the universal service will be set by the Competition Authority as an impartial assessor outside the market.

Some consumers could not fix their electricity prices at the time when lower-priced plans were still available, so the universal service offers an opportunity for these consumers to reduce their energy costs.

CAN A BUSINESS CUSTOMER USE THE UNIVERSAL SERVICE?

Only household consumers can use the universal service. For example, if a household consumer obtains their electricity from a management company, the management company may buy it for that consumer from its own supplier (e.g. Elektrum) at the universal service price only to the extent that this household consumer uses electricity in their household. If a business consumer uses the universal service electricity tariff for their own consumption, for example in a bakery or other non-domestic point of use, that consumer will have to compensate the supplier (for example, Elektrum) for the damage caused.

DOES A UNIVERSAL SERVICE CONSUMER ALSO BENEFIT FROM PUBLIC COMPENSATION MEASURES?

The universal service consumer will also be compensated for price increase from the electricity price of €50/MWh (excluding VAT) consumer from 1 October 2022 to 31 March 2023 on the condition that the consumer themselves pays €80/MWh (excluding VAT).

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