Frequently asked questions

What is an electricity supplier?

An electricity supplier is an entity of the electricity market which supplies electricity to consumers. Suppliers are entitled to trade in electricity, under bilateral contracts, with producers, balancing power suppliers and consumers. Electricity suppliers include independent electricity suppliers, public suppliers and guarantee suppliers.

Who is currently performing the function of electricity supplier in Lithuania?

UAB Rytų Skirstomieji Tinklai (Eastern Distribution Networks) and UAB VST, which have the status of public supplier, are currently supplying electricity to consumers in Lithuania. These companies are also fulfilling the function of electricity distribution. When implementing the directives of the European Union, it is necessary to separate distribution from supply. Consequently, as a result of the liberalisation of the electricity market, all consumers will have to choose an independent electricity supplier by 1 January 2015.

What is an independent electricity supplier? What is the difference between an independent electricity supplier and a public electricity supplier?

An independent electricity supplier operates exclusively in response to electricity market conditions. In contrast, the price of electricity provided by a public supplier is regulated by the state.
Are there any independent electricity suppliers in Lithuania now?

As of 1 November 2009, 25 registered independent electricity suppliers were operating under licences in Lithuania.

How will “the inclusion” of an independent electricity supplier in the system change the existing system?

Liberalisation processes in the electricity market will determine the major changes which will take place. According to the plan for the liberalisation of the electricity market, which was approved by the Government of the Republic of Lithuania, this process must be completed by the end of 2014. On 1 January 2015, unregulated electricity tariffs will be introduced for all electricity consumers (with the exception of guarantee tariffs, referred to in the legislation of the European Union, for groups of consumers established by the law).
What does the liberalisation of the electricity market mean to residents of Lithuania (domestic consumers)?
This means that every domestic electricity consumer will have a contract for connecting to the network with the distribution networks and another contract for the purchase of electricity with their chosen electricity supplier.

Why is the existing system in which the distribution networks perform the double function (distribution and supply) improper?

This system violates the directives of the European Union. Supply should be separated from distribution, since the latter is a monopoly, while supply should be ensured under competitive market conditions.

What impact will a strong position of an electricity supplier as an individual entity in the market have on the price of electricity?

It is likely that the impact will be positive, as the emergence of the supplier segment and competition will allow electricity consumers to choose the lowest price. The price of electricity will consist of three components: the production price, the distribution price and the supply price. The first two prices will continue to be regulated by the state, while the supply price will be set by the market. If at least one of these components decreases, the final electricity price will fall as well.

What will specifically change as of 1 January 2010?

As of 1 January 2010, electricity consumers, whose property’s permissible power exceeds or is equal to 400 kW, will no longer be able to buy electricity at a price regulated by the state and will buy it in the electricity market.

Is it possible for any domestic electricity consumer to choose an electricity supplier today?

In theory, yes, but, in practice, this will become possible only when the electricity market has been completely liberalised and favourable conditions for business and competition among electricity suppliers have been created.

What is a consumer who wants to choose an independent electricity supplier required to do?

A consumer is required to notify the public supplier in writing 30 days before the conclusion of the contract with an independent supplier and enter into a contract for the distribution service with the operator of a distribution network.

What is the Nord Pool market?

Nord Pool is a common electricity exchange set up by energy companies in the Nordic countries (Norway, Finland, Sweden and Denmark). The Nord Pool market is one of the oldest in Europe. Nord Pool disseminates information on prices in the energy market, manages the spot-market and long-term financial derivatives market and monitors the conclusion of contracts between market participants.

What is the essence of the functioning of this market?

Nord Pool uses a model of spot-market. This system transmits information on energy supply schedules. This helps to avoid network overloads. Producers and suppliers provide the exchange with information on their capacities and requested energy prices, and, subsequently, market administrators draw up an energy supply schedule for the following day at an auction. In this way, overloads of energy transportation networks are prevented.