The Estonian Competition Authority has issued a formal precept to Elering AS, concluding that the company has unlawfully restricted the use of hedging instruments in the electricity market in breach of European Union rules. The decision, dated 24 November 2025, requires Elering AS to bring its practices into full compliance by 1 December 2025.
The case concerns long-term transmission rights, a key hedging tool that allows market participants to mitigate risks associated with regional price differences between the Estonian and Latvian bidding zones. Under EU law, any limitation on such instruments must comply with established regulatory requirements to ensure transparent and competitive electricity markets.
According to the Authority, Elering AS imposed restrictions on these hedging instruments based on the justification of preserving the “normal state” of the electricity system. However, EU rules do not permit such limitations on this basis. The Authority noted that it had previously alerted Elering AS to this issue, yet the company continued to apply the same restrictive clause.
By issuing the precept, the Estonian Competition Authority obliges Elering AS to adjust its operations without delay to meet EU requirements governing the electricity market. Failure to comply by the 1 December deadline could trigger further enforcement action.
The Estonian Competition Authority conducts state supervision across multiple sectors—including competition, electricity, natural gas, district heating, postal services, water services, railways, aviation, and ports—and also works to prevent unfair trading practices in the agricultural and food supply chain. The Authority operates under the Ministry of Justice and Digital Affairs.